Why Cheap Operators Are Often the Most Expensive in the Long Run
On paper, choosing a cheaper operator often feels like a rational decision.
Lower commission.
Lower monthly fees.
More income left for the owner.
But in hospitality, the true cost of an operator is rarely found in the fee structure. It is found in everything that happens around it.
Low Fees Hide Real Costs
Cheap operators usually optimise for one thing: acquiring volume.
To do that, they often rely on:
Minimal staffing
Heavy automation
Outsourced services with little oversight
Reactive rather than proactive operations
At small scale, this can work.
At scale, it quietly creates friction.
And friction always turns into cost.
Where the Real Costs Appear
The difference shows up in places owners don’t always track directly.
Guest Issues and Refunds
Poor coordination leads to more complaints, partial refunds, and bad reviews.
Each one chips away at revenue and long-term pricing power.
Operational Inefficiency
Missed cleanings, delayed maintenance, and unclear responsibility cost time and money.
Problems are solved late, not early.
Staff and Supplier Turnover
Cheap operators often change cleaners, handymen, or support staff frequently.
Every change resets standards and increases error rates.
Owner Time and Stress
The hidden cost most owners underestimate is involvement.
More messages.
More follow-ups.
More decisions that should not require the owner’s attention.
Hands-off ownership slowly becomes hands-on again.
Cheap Becomes Expensive at Scale
At five units, inefficiencies are manageable.
At fifteen, they compound.
At fifty, they become structural.
What once looked like savings turns into:
Lost revenue
Higher operational costs
Brand erosion
Owner fatigue
And eventually, a switch to a new operator, which itself carries cost and risk.
The Difference Is Not Price. It Is Design.
Well-run operators are not expensive because they charge more.
They charge more because their operations are designed to prevent problems before they occur.
This includes:
Proper staffing models
Clear responsibility and escalation
Stable supplier relationships
Systems that support people rather than replace them
These investments reduce volatility.
And volatility is what really costs owners money.
The Most Expensive Operator Is the One You Replace
Switching operators means:
Lost time
Operational disruption
Guest confusion
Rebuilding systems and trust
Owners rarely switch because of fees.
They switch because the cost of staying becomes higher than the cost of change.
Total Cost of Ownership Matters More Than Commission
The right question is not:
“What does this operator charge?”
It is:
“What does this operating model cost me over three to five years?”
At Palmera Group, we believe that sustainable returns come from operational discipline, not discounted fees.
Because in hospitality, cheap is rarely simple.
And it is almost never cheap.
