On February 5, 2026, hospitality leaders gathered online for a masterclass hosted by Hosco in partnership with EHL Hospitality Business School. Titled “The Business-Savvy Leader”, the session addressed a growing reality across the industry: passion for service alone is no longer enough to sustain hotels in an environment shaped by institutional ownership, private equity, and rising financial scrutiny.

Moderated by Raksha Daryanani from Hosco, the discussion brought together two complementary perspectives. Benoît Perrier, Senior Lecturer in Finance at EHL and former equity research analyst at Barclays and Credit Suisse, provided a structured financial lens on value creation. Frank Marrenbach, CEO and Managing Partner of Althoff Hotels, grounded those concepts in operational reality, drawing on decades of experience managing a hospitality group generating over €200 million in annual turnover.

Rather than positioning finance as a constraint, the session reframed it as a leadership capability — one that allows hospitality professionals to translate operational excellence into long-term value for owners, investors, and employees alike.

Understanding the Goal: What Creates Value in Hospitality?

Early in the session, Perrier addressed a fundamental but often uncomfortable question: what is the goal of a company? In a market economy, he explained, the financial objective is clear — long-term value creation for shareholders. This does not negate purpose, ethics, or culture, but it does require leaders to understand how value is generated and measured.

From a financial perspective, Perrier outlined two primary sources of shareholder value:

• Dividends, representing cash distributed directly to shareholders

• Capital gains, reflecting an increase in the company’s overall value driven by future cash-flow expectations

Importantly, dividends require both available cash and distributable reserves. Perrier illustrated this with examples discussed during the session, including Apple’s long-standing decision to reinvest profits rather than distribute dividends, relying on the market’s confidence in future growth. The lesson for hospitality leaders was clear: value creation depends not on short-term payouts, but on the credibility of long-term cash flows.

From Guest Experience to Enterprise Value

One of the session’s most important contributions was the clear connection drawn between operational decisions and financial outcomes. Perrier presented a simplified but powerful value-creation logic that resonates strongly in hospitality:

Operational excellence across sales, procurement, and people management drives service quality. Service quality leads to guest satisfaction, which builds loyalty and brand strength. Strong brands gain pricing power, allowing hotels to improve RevPAR and margins. Over time, this generates stable and sufficient cash flows — the foundation of enterprise value.

In other words, financial performance does not start in spreadsheets. It starts on the floor, in daily guest interactions. When service quality declines, financial value eventually follows. Hospitality leaders, therefore, influence valuation long before investors do.

Profit Is Not Cash: Seeing What Investors See

A recurring warning throughout the session was the dangerous assumption that profit equals cash. Perrier emphasized that a hotel can appear profitable on its P&L while still facing liquidity pressure due to working capital requirements or heavy capital expenditure.

To understand how investors truly evaluate performance, Perrier highlighted three core financial metrics:

• EBITDA margin, which reflects operating efficiency before financing and accounting effects

• Free Cash Flow (FCF), representing the cash available after reinvestment, taxes, and working capital changes

• ROIC versus WACC, the critical comparison determining whether a business is creating or destroying value

If a company’s return on invested capital does not exceed its cost of capital, Perrier explained, it is eroding value — regardless of occupancy rates or brand visibility.

This perspective reframes everyday decisions. Renovations, expansions, and concept changes only create value if they generate returns above their cost. Without that discipline, growth becomes a liability rather than an asset.

Investment Discipline and Market Expectations

To illustrate how markets react to investment decisions, Perrier referenced examples discussed during the session, including Alphabet’s announcement of substantial capital expenditure linked to artificial intelligence. Despite strong revenue performance, the market responded cautiously, reflecting uncertainty about whether future returns would justify the scale of investment.

The hospitality parallel is clear. Major renovations or concept changes may be exciting operationally, but without a credible path to improved margins or pricing power, they introduce risk rather than value.

Perrier also contrasted academic valuation models with professional practice, explaining that investors often assess businesses using long-term cash-flow projections spanning decades. For hospitality leaders, this reinforces the need to evaluate decisions through a long-term lens, rather than focusing solely on annual budgets or short-term performance targets.

“If They Don’t Jingle, They Don’t Count”: Operational Reality from the Owner’s Side

Frank Marrenbach brought a distinctly pragmatic voice to the discussion. His philosophy, repeated during the session, was simple: “If they don’t jingle, they don’t count.” Creativity and service innovation matter — but only if they translate into sustainable financial results.

Marrenbach highlighted several hospitality-specific metrics that owners and investors closely monitor:

• RGI versus RevPAR, stressing that performance must be evaluated relative to the competitive set

• GOP versus EBT, particularly in leased models where earnings after rent determine business sustainability

• Lease coverage ratios, which signal financial resilience to landlords

• Capex intensity, warning that under-investment may improve short-term results while undermining long-term competitiveness

He cautioned against short-term financial engineering, such as delaying maintenance to boost results. In hospitality, neglecting assets eventually erodes guest loyalty — and recovering trust is far more expensive than maintaining it.

People as the Leading Indicator of Value

Although the session focused on finance, Marrenbach repeatedly returned to people. At Althoff Hotels, employee engagement is tracked through regular Gallup surveys, not as a cultural exercise, but as a leading indicator of financial performance.

In his view, hospitality organizations function like villages. Buildings matter, but communities matter more. When employees feel a sense of belonging and pride, service quality improves — and financial performance follows. This human-centric view reinforced the idea that financial discipline and people leadership are not opposing forces, but mutually reinforcing ones.

Financial Resilience in Times of Crisis

The value of financial discipline becomes most visible during downturns. Marrenbach reflected on the early months of the COVID-19 crisis, when Althoff Hotels faced complete shutdowns. The group’s ability to weather the shock, he explained, was largely due to a strong equity base and retained earnings built over years.

Equity, he warned, takes time to accumulate but can disappear rapidly in a crisis. Leaders who chase growth without financial buffers expose their organizations to existential risk.

Thinking Like an Asset Manager

A final theme running through the session was the need for hospitality leaders to adopt an asset-manager mindset, even when they do not own the real estate. This includes:

• Transparent communication with owners and investors

• Early disclosure of challenges rather than reactive explanations

• Clear, data-driven business plans grounded in realistic assumptions

Marrenbach emphasized that strategy often means saying no. Not every attractive opportunity is worth pursuing. Walking away from projects that do not meet financial and operational criteria protects leadership focus, talent, and long-term value.

Conclusion: Speaking the Language of Sustainable Leadership

The masterclass delivered a clear message: the era of the service-only hospitality leader is ending. The future belongs to leaders who can combine operational passion with financial fluency — and who understand how daily decisions influence long-term value.

Finance, as both speakers demonstrated, is not an abstract discipline reserved for investors. It is the language through which hospitality leaders explain their impact, earn trust, and secure the resources needed to grow sustainably.

In an industry built on emotion, experience, and people, mastering that language does not dilute hospitality’s soul — it protects it.