Finding value in numbers

ELECTRIC AVENUE: Founded in 2003, Providence-based hotelAVE manages more than $4 billion in hotel real estate assets. Above, Michelle Russo, CEO of hotelAVE, speaks with company Senior Vice President Joel Wineman. / PBN PHOTO/MICHAEL SALERNO
ELECTRIC AVENUE: Founded in 2003, Providence-based hotelAVE manages more than $4 billion in hotel real estate assets. Above, Michelle Russo, CEO of hotelAVE, speaks with company Senior Vice President Joel Wineman. / PBN PHOTO/MICHAEL SALERNO

Michelle Russo started her hotel real estate asset-management company with two employees, three client hotels and discussions over her grandmother’s kitchen table in Tiverton.

Twelve years later, hotelAVE manages more than $4 billion in hotel real estate assets. Its management footprint includes 130 hotel properties, ranging from the One & Only Ocean Club in the Bahamas to the Waldorf Astoria Chicago, to the new Four Seasons Resort Orlando at Walt Disney World.

The company, hotelAVE (hotel asset value enhancement), specializes in management analytics that evaluate how hotel properties are performing in all areas, from restaurant functions to room occupancy. Her team then advises the general managers in how to enhance the efficiency of the property.

The hotels are owned by individuals, financial institutions or real estate investment funds. “We represent the owner and our sole goal is to maximize the value of their real estate,” Russo said.

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The company she started in Tiverton in 2003, after leaving a job in New York as a stock analyst, now employs 20 people. All have experience in working in hotels and real estate, Russo said.

Team members present findings to hotel general managers, on management issues ranging from the origin of losses in alcohol costs to the potential for reaching new referrals from travel agencies. “Our job is to meet with them monthly, show them best practices and provide resources to help them think more strategically,” Russo said.

Where the hotel manager may be focused on daily operations, including getting the best services to guests, the hotel-asset-management team is looking at short- to long-term trends that may affect that property, and ways to realign the property to either minimize losses or take advantage of opportunities.

In a recent example, Russo said, an analysis of food and alcohol costs at a New Jersey hotel revealed a sharp uptick in the alcohol costs relative to sales. What was happening? The answer was revealed when management interviewed staff. The bar staff was over-pouring. And a review of the liquor storage revealed the room wasn’t being secured properly.

At a small restaurant, such losses might not add up to much. At a hotel with $4 million to $5 million in beverage sales, it matters.

Twenty years ago, she said, the owner of the hotel would be the group that had the name on the building. Now, the ownership and management functions are bifurcated, which has created an opportunity for specialization.

Her own company has grown steadily, Russo said, and primarily through word-of-mouth. HotelAVE is now the largest hotel-asset-management company for the number of hotels in its portfolio, she said.

“I had no preconception [when I began] of what I thought it would be,” she said. •

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