Small Brokerage Firms versus Large

(4-minute read)

Author: James Cornell

Small Brokerage Firms versus Large Brokerage Firms. The advantage goes to small Firms.

This article examines the advantages small brokerage firms have over large brokerage companies. It also highlights some lesser-known benefits that Clients gain from small firms.

Personalized Service – The focus is on the Client’s Needs

Hotel brokers in small brokerage firms will likely have more freedom to customize the purchase or sale experience to the Client’s specific needs. Small brokerage firms take the time to get to know their Clients. The Broker must always act as a fiduciary, representing the Client’s best and highest interests. As a fiduciary, the Broker must negotiate with heartfelt strength and intensity to ensure the Client receives what they need from a purchase or sale.

By contrast, in large brokerage firms, there is much more office work that each Broker must do to fit properly within the overall firm culture and structure. This extra office work distracts valuable time and attention away from the Client. In small brokerage companies, the focus is keen, and clients’ wishes, orders, scheduling, and interests are given primary attention. Getting lost in the crowd is eliminated in small brokerage firms.

Large Firms Have Few Advantages

Large brokerage companies no longer have the advantage of expanded reach to the marketplace of Buyers. Every Broker, whether from a large or small company, knows the important players in the hospitality industry. There is no inside track to selling a hotel. Every good buyer has a phone number, email address, and street address for contacting them.  And the truth be told, great hotel Buyers will listen to any Broker who has a good hotel to offer.

So, what are you getting when you choose a large firm to broker your hotels?

  • You’re placed on a list of other clients and compete for the Broker’s attention.
  • Notable clients get the focused care and attention. Brokers play favorites. Your needs are put on a priority list.
  • Communication with Clients and response times to Client needs are diminished in large brokerage firms.

Computerized price valuation software has leveled the field. 

Small brokerage firms are just as capable and perhaps more capable of appraising hotels.

NOTE: At Cornell, we use specialized hotel valuation software developed over decades of research by renowned hotel appraisal companies and academic researchers. 

Read Library Article: “Hotel Market Analysis & Valuation Software”

Market Data is Available to Everyone – Valuation Appraisals

Every brokerage firm has access to current market data. Subscription services provide sales comps, recent cap rates, local market statistics, competitive reports, and much more. Proprietary in-house databases with customer lists no longer have the advantage. The information age is upon us. Every brokerage firm, both small and large, has access to all the data necessary to perform advanced market analysis and hotel price valuations.

More and Better Experience

Small firms train their brokers with hands-on feedback and oversight. On the contrary, employee turnover in large companies is not uncommon, so you may get a new real estate agent who is not yet a seasoned hotel veteran. Do you want an apprentice in charge of selling your hotel?

Quality Excels over Quantity

  • Clients have a choice between hands-on care and attention from a small brokerage firm or being handed off to the next idle agent in a large organization.
  • Timely responses to Client calls are typical in a small company. Good communication is a hallmark of excellent service. 
  • Large companies spend a lot of time promoting their own company.
  • Large brokerage companies do not need to be as careful about protecting their reputations. In a large brokerage firm, one bad review won’t make or break the firm. But for a smaller brokerage firm, every customer review counts. Small firms are vigilant about protecting their reputations. Small companies can’t afford to make mistakes.
  • Small brokerage firms must be more consistent in their commitment to serving clients. Each individual Client’s priorities come first.
  • Vigilent Brokers are responsive to Client communications and provide immediate attention to Client priorities and needs.    

Check Out the Broker’s Background in Large Firms

  • Have the brokers completed post-graduate university degrees? 
  • Are their university degrees focused on real estate and business?
  • In large brokerage firms, have brokers acquired advanced certifications, making them better equipped to conduct brokerage and valuation work?
  • How many years of experience do the staff brokers have in the hotel industry, with a focus on brokerage and valuations?
  • Will you be assigned to an apprentice broker?

Read Library Article: “About James Cornell”

Read more interesting Library Articles:

      • “How to Choose the Right Broker”
      • “Calculate Cap Rates Using Regression Analysis”
      • “Hotel Valuations – Correct NOI Calculations”
      • “The Sales Process from Start to Finish”
      • “Hotel Market Analysis & Valuation Software”