The Hotel General Manager Has Become a Luxury Employee

There is a scene I have witnessed far too many times. In a meeting, the hotel manager is asked to explain the operating result, margin performance, team turnover, declining reputation and failure to meet the budget. The conversation suggests that everything depends on them. Yet when it is time to act, every relevant lever leads to a different approval. Hiring requires authorisation, replacing a supplier requires consultation, modifying a service requires submitting a proposal, and defending a rate depends on decisions made outside the hotel. They are accountable for the business, yet govern an ever smaller part of it.

This contradiction is quietly transforming hotel management. We have created roles with enormous exposure and fragmented authority. The hotel manager is seen by the team as the highest point of reference, by the guest as the ultimate person responsible, and by ownership as the guarantor of results. At the same time, they may lack any real ability to decide on budgets, structure, commercial policy, maintenance, procurement or compensation. Their role retains the symbolic weight of leadership, but loses some of the tools required to exercise it.

This is where the expression luxury employee comes from. It does not necessarily refer to salary, benefits or status. It describes a highly qualified professional, costly to recruit, difficult to replace and burdened with responsibility, who is managed as a sophisticated executor. Business vision is expected, but supervisor-level discretion is granted. Initiative is demanded, although every departure from the script must be justified. Leadership is required while, at the same time, their authority is undermined through parallel interventions, direct instructions to the team or corporate decisions that arrive at the hotel already finalised.

I do not attribute this situation to one party alone. Owners, operators, corporate functions, advisers, finance leaders and general managers pursue legitimate objectives, but may do so from different perspectives. Ownership protects the asset and cash flow; the operator defends standards and the brand; central departments seek consistency; the hotel tries to deliver today on a promise that has already been sold. The problem arises when these interests overlap without a clear authority architecture. Then everyone influences, some decide, and one person ends up explaining the result.

I have learned that this issue is not resolved by asking the hotel manager to be braver, more communicative or more resilient. Courage helps, but it does not replace a mandate. Communication improves relationships, but does not by itself clarify who can decide. Resilience, taken too far, becomes an elegant way of asking someone to endure a flawed organisational design. If we want Hospitality to be better managed, we need to revisit the relationship between accountability, authority, resources and consequences.

Accountability has remained at the top while authority has been distributed

Hotel management was conceived as an integrating function. Someone had to connect demand, people, service, the asset, reputation and financial performance. That integration remains necessary, perhaps more than ever, because the complexity of the business has increased. Yet many organisations have responded to that complexity by dividing decisions among specialists, committees, central departments and approval levels. Specialisation brings knowledge, but it can also hollow out the hotel’s centre of gravity.

I do not question the value of Revenue, Finance, Human Resources, Marketing, Procurement, Corporate Operations or Asset Management. I have worked with excellent professionals in all these areas and have seen how much they can improve a property. The risk arises when they cease to advise, challenge or control and begin to exercise operational authority without assuming full responsibility for the consequences. The hotel receives partial instructions from people who see one part of the business, while the manager retains the obligation to make all those parts fit together.

This is how what I call the management mandate gap emerges. It is the distance between the results for which a person will be assessed and the decisions they can actually make to achieve them. The greater that distance, the more likely the organisation is to confuse accountability with blame-seeking. Asking for explanations is only useful when the person answering had reasonable information, resources, time and authority to intervene.

The manager turned into an approval coordinator

In some hotels, an increasing share of management work consists of preparing approval requests. A hire must be argued for, a repair justified, a commercial exception requested, a supplier change defended, compensation explained, or it must be demonstrated why a corporate standard does not work at that property. Each request may seem reasonable in isolation. Taken together, they turn management into an office for processing other people’s decisions.

The cost is not limited to the hours spent. It also appears in decision latency, the time that passes between identifying a need and acting on it. A critical vacancy remains open, a minor fault worsens, a commercial opportunity expires, or a valuable employee accepts another offer while the hotel waits for an answer. We then assess the manager for not reacting quickly enough. In Hospitality, organisational slowness often reaches the profit and loss account disguised as an operational incident.

I have seen professionals adapt to this system in two ways. Some stop making proposals because they anticipate the drain of every approval process. Others learn to present as urgent matters that should be resolved through ordinary authority. Neither response is healthy. The first creates conformity; the second turns the hotel into a succession of exceptions. When the primary management tool is an email with the subject line “URGENT”, the problem is rarely the email.

The areas where management authority usually disappears

Authority is not lost all at once. It erodes through small restrictions that ultimately change the nature of the role. It is worth examining at least these areas:

• Budget and operating expenditure. A manager may be accountable for GOP yet lack the freedom to reallocate line items within the approved budget. This rigidity forces them to retain low-value expenditure while delaying interventions that could protect revenue, productivity or service. Controlling expenditure is essential; preventing any reallocation turns the budget into an accounting cage.
• Staffing and structure. Quality, speed and consistency are demanded, but hiring, replacements, salaries, promotions and disciplinary measures depend on external decisions. The contradiction becomes especially visible when the manager is held accountable for employee climate without being allowed to address behaviours, recognise talent or redesign roles. The employee experience cannot be managed through good conversations alone.
• Commercial policy and pricing. Hotel revenue management requires specialisation, but also operational and strategic context. If the manager is accountable for results without being able to challenge segments, restrictions, discounts, groups or channels, their economic authority is incomplete. Positioning cannot be protected from an office if the hotel accepts demand incompatible with its proposition. Reflection on the risk of being trapped between luxury and low cost also requires deciding which business should be declined.
• Suppliers and contracts. Negotiating group volume can improve pricing, but can also impose solutions poorly suited to a specific property. If the hotel must operate with an underperforming supplier and lacks the ability to hold it accountable, replace it or activate an alternative, the manager is reduced to managing the consequences of a relationship they do not control.
• Maintenance and investment. Hotels are expected to protect reputation, rate and guest experience while repairs, replacements or CAPEX follow a timetable different from the asset’s actual deterioration. A room does not wait for the quarterly committee to age, nor does the guest deduct from their review the fact that investment was awaiting approval.
• Service recovery. The manager must answer to an affected guest, but sometimes faces unrealistic limits on compensation, adapting a policy or correcting a promise. At the other extreme, they may be pressured to grant anything simply to avoid a complaint. Defending the team when it has acted correctly, as I argued when analysing why the guest is not always right, requires authority that does not disappear when someone raises their voice.

These limitations may have a legitimate explanation. An owner has the right to protect its investment, a brand must protect its standards, and a group needs controls. The mistake lies in confusing control with substitution. Control means setting boundaries, requiring evidence, reviewing outcomes and correcting deviations. Substitution means making operational decisions from outside while retaining within the hotel all accountability for their effects.

Bypassing turns the organisation chart into fiction

One of the most destructive ways to remove authority is the management bypass. It occurs when ownership, corporate teams or other levels give instructions directly to department heads without going through hotel management. Sometimes this is done for speed, personal trust or habit. It can also stem from positive intent. The result, however, is usually a dual chain of command.

The department head learns that they can obtain a different answer by escalating the matter through another route. The manager discovers decisions once they are already under way. The team begins to interpret which authority carries more weight at any given time, and the organisation develops an unproductive skill for navigating between stakeholders. Rather than solving the business, it learns to manage instructions politically.

This practice even harms those who use it. Ownership may secure immediate action, but weakens the hotel’s future ability to coordinate. The corporate department may impose its judgement, yet end up isolating that decision from the rest of the operation. And the manager may continue to occupy the office, but the team stops seeing it as the place where priorities converge. Formal authority remains; functional authority leaves through the service entrance.

This is why I find it so useful to observe what happens when no one is looking towards the office. Absence reveals whether the hotel has a coherent structure or an informal network of dependencies. Yet that test is only fair if management has first been given a recognisable mandate. We cannot ask the team for autonomy while senior authority changes course every time a decision becomes uncomfortable.

The economic cost of the decorative manager

A manager with insufficient authority can keep the hotel running. Indeed, some achieve admirable results through personal influence, patience and an almost artisanal ability to negotiate every decision. The problem is that this performance depends on individual effort, not organisational design. We are paying for strategic talent to compensate for governance friction.

The decorative manager is expensive even when their salary is not. They delay decisions, multiply meetings, encourage parallel communications and require context to be rebuilt with every approval. They also weaken hotel strategic planning because the professional learns that making long-term proposals is less rewarding than resolving immediate matters within the permitted margin.

There is another, more delicate cost. The strongest professionals do not usually leave only because they work hard. They also leave when they perceive that their judgement has no real consequences, that their name is attached to results they cannot govern, or that their function is to legitimise decisions made by others. The organisation then loses experience, relationships, operational memory and credibility with the team.

Those who stay may develop a form of defensive caution. They avoid deciding without cover, document every conversation and escalate minor matters to protect themselves. From outside, this looks like a lack of initiative. From within, it may be a rational response to a system that punishes autonomy when something goes wrong and claims it when things go well.

The ethics of accountability also deteriorate. Strong hotel leadership requires consistency between power and consequences, an idea related to ethics applied to hotel management. If one person can impose a decision without assuming its effects while another must explain them, the system rewards influence and penalises responsibility. No culture of excellence can be sustained for long on that asymmetry.

The hotel needs a management mandate that can be audited

The solution is not to grant unlimited power. Nor is it to remove controls, committees or corporate functions. A hotel manages money, people, safety, reputation and valuable assets; it needs boundaries. What I propose is replacing ambiguity with an explicit management mandate. A living document that connects expected results, authorised decisions, available resources, escalation thresholds and accountability rules.

Many contracts describe functions with broad expressions such as managing operations, ensuring standards or maximising profitability. These formulations sound elegant, but they are insufficient. They do not explain what the manager may change, what must be consulted, who decides in the event of disagreement, or what happens when an external instruction alters the approved plan. A role is not well defined by the number of responsibilities it lists, but by the quality of its decision rights.

The Hotel Management Mandate Agreement

I have come to use a framework I call the Hotel Management Mandate Agreement. It does not need to be an employment contract or a separate legal document. It can be incorporated into the governance model, the job description or the agreements between owner and operator. What matters is that it answers several questions precisely.

• Which results genuinely belong to management. Economic, operational, people, commercial and asset outcomes must be defined. If one dimension lies outside its influence, this must also be reflected in the evaluation. Accountability should not be expanded through implicit expectations that emerge only when something goes wrong.
• Which decisions can be made without prior authorisation. Clear areas and financial limits should be established. For example, reallocations within the budget, hiring up to certain levels, selecting local suppliers, guest compensation, operational changes, schedule adjustments or service recovery measures.
• Which decisions require consultation, but not permission. Informing and consulting are healthy practices. They should not automatically be confused with requesting authorisation. The manager may be required to explain a material decision without thereby losing the right to make it.
• Which decisions require approval. Significant CAPEX, structural changes, borrowing, multi-year commitments, brand modifications or major legal risks reasonably belong to higher levels. The list must be specific to prevent every matter from being treated as extraordinary.
• Which matters remain outside their authority. It is better to acknowledge an exclusion than to simulate autonomy that does not exist. If management does not control pricing, salaries, procurement or commercial strategy, the organisation must state this explicitly and review how it affects the role’s evaluation.
• What happens when there is disagreement. Every model needs an escalation route, a response deadline and a final authority. Without these elements, disagreement becomes waiting, and waiting usually favours the person with less exposure to the operation.
• Who assumes the consequences of an imposed exception. When an external decision changes the hotel’s judgement, what changed, why and under whose responsibility should be recorded. I am not seeking bureaucracy or a file for future reprisals. I am seeking learning and an honest distribution of accountability.

This agreement prevents two extremes. On the one hand, it prevents management from using lack of authority as a universal explanation. On the other, it prevents ownership from demanding results as though every lever were under the hotel’s control. Clarity protects both parties because it turns perceptions into verifiable commitments.

Four levels of authority are better than a yes or a no

Authority should not be classified simply as granted or denied. In hotel management, four straightforward levels work better:

• Decide and execute. The manager acts within agreed limits, documents the decision and is accountable for the result. This level should cover a meaningful portion of routine operations.
• Decide and inform. The action does not require approval, but it must be communicated because of its financial, reputational or people impact. It is a useful formula for retaining speed without losing visibility.
• Propose and obtain approval. The manager builds the case, presents alternatives and recommends an option. Final authority belongs to ownership, the operator or a committee, which must also assume the impact of its choice.
• Mandatory escalation. The decision exceeds thresholds for risk, legality, safety, investment or reputation. Here, autonomy deliberately gives way because the potential harm exceeds the scope of a single function.

The value of the model lies in applying it to specific decisions. Saying that someone has autonomy is easy. It is more revealing to ask whether they can replace a critical vacancy, temporarily close a service, decline an unprofitable group, change an underperforming supplier, compensate for a serious incident, remove a room from inventory or reallocate expenditure to prevent a larger breakdown.

The answer may vary according to the size of the hotel, its ownership, the management agreement, the brand and the professional’s maturity. What matters is that it does not vary according to the mood of the person receiving the call. Stable authority allows judgement to develop. Unpredictable authority teaches people to ask permission.

The Management Mandate Index

To determine whether the role has real authority, I use five tests. They are not intended to produce a scientific score, but they help structure a conversation that often becomes trapped in impressions.

• Decision rights. Can they resolve a meaningful share of the matters affecting the results on which they will be assessed? If almost everything requires approval, this is high-level coordination rather than full management.
• Control of resources. Do they have the budget, capacity, people and time to execute? Authorising a decision without providing the means creates purely ceremonial autonomy.
• Access to information. Do they receive in time the data, contracts, commitments and conversations that shape the hotel? Accountability cannot be demanded for decisions discovered after they have been made.
• Protection against bypassing. Is there a rule preventing parallel instructions to the team or, at least, requiring any intervention to be communicated? Without that protection, authority can be informally overridden at any moment.
• Symmetry of consequences. Does the evaluation distinguish between own decisions, shared decisions and imposed decisions? If every variance ends up attributed to the manager, the model does not measure performance; it concentrates accountability.

A hotel with a strong mandate does not need the manager to win every discussion. It needs to know who decides, on what evidence and under what responsibility. It also needs disagreement to be possible. Apparent obedience may be comfortable, but it deprives ownership of one of the reasons it hired management expertise: to receive judgement even when that judgement is uncomfortable.

The governance meeting should review decisions, not just results

Many meetings between ownership and management devote most of their time to reviewing past figures. Occupancy, ADR, RevPAR, costs, reputation and productivity deserve attention, but they arrive too late to change what has already happened. A true governance meeting should also examine the decisions that will produce the next results.

I propose reserving a fixed space to review five matters: pending decisions, delayed decisions, imposed exceptions, blocked resources and risks whose ownership is not yet clear. This agenda makes it possible to discover whether hotel strategy is being held back by a lack of market or a lack of governance.

It is also advisable to maintain a record of material decisions. A few lines stating the context, recommendation, final authority, deadline and expected result are enough. There is no need to turn the hotel into a notary’s office. The aim is to remember why one path was chosen and later verify whether the reasoning was sound. Selective memory is remarkably efficient when the budget is not met.

A practical implementation in ninety days

Redesigning the mandate does not require stopping the operation. It can be addressed through a short, disciplined sequence:

• First month: inventory decisions. I recommend reviewing between twenty and thirty recent decisions related to people, pricing, procurement, maintenance, service, hotel marketing and investment. For each one, identify who proposed it, who decided, how long it took and who ultimately answered for the effect.
• Second month: assign authority. Each type of decision should be placed within one of the four levels above. Financial limits, response times and escalation conditions should also be set. Grey areas are discussed before the next urgent matter arises.
• Third month: test and correct. The mandate is applied to real decisions and speed, quality, risk and traceability are reviewed. Some authorities will need to be expanded and others narrowed. The aim is not to protect territories, but to improve the business.
• Quarterly review: learn. Authority should evolve with demonstrated capability, strategy, the asset and the context. A mandate that never changes may become as disconnected as the model it was intended to correct.

Ownership also needs clear commitments. It must respect the chain of command, respond within agreed timeframes, share relevant information and prevent informal intervention from replacing governance. The manager, in turn, must document decisions, acknowledge limits, escalate risks in time and accept that autonomy includes accountability. Trust does not eliminate control; it allows control to be more intelligent.

If you are an owner or operator, I suggest a simple exercise. Review the hotel’s last twenty important decisions and compare who had the authority, who had the information and who ultimately had to provide the explanation. If those three people rarely coincide, you probably do not have an individual leadership problem. You have a fragmented governance architecture.

If you hold a management responsibility, avoid turning this reflection into a complaint about everything you are not allowed to do. Document the gap with examples, timings, costs and missed opportunities. Present alternatives involving limited authority, control thresholds and monitoring mechanisms. Autonomy is better defended as an improvement for the business than as a personal claim.

Hospitality needs professionals able to think like entrepreneurs, care for the asset, develop teams, protect the guest experience and build hotel profitability. If we expect all this, we must grant a proportionate mandate. Otherwise, we will continue hiring judgement only to demand obedience, experience only to assign administrative tasks, and vision only to keep it prudently within budget. A hotel manager should not be a luxury employee. They should be an accountable, bounded and real authority.