This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies.  Find out more here  Close
Marcus Hotels is poised for growth
March 29 2013

New President Kirk Rose sees growth opportunities for Marcus Hotels & Resorts.

  • Marcus sees potential in tertiary markets.
  • Third-party management contract growth will be selective.
  • Select-service lifestyle hotels might be an opportunity for expansion.
By Ed Watkins
HNN contributor

MILWAUKEE—Under new President Kirk A. Rose, Marcus Hotels & Resorts is ready to grow. According to Rose, that growth will come in a variety of ways: ownership, partial equity investments and even third-party management.

“We’ve got quite a bit of activity in our pipeline, some of which is through classic developer or fund relationships, but we’re also looking at other opportunities,” said Rose, who joined Marcus in January from Salt Creek Hospitality, a private equity group where he was a partner.

“We see opportunities in urban areas as well as in tertiary markets and suburban areas of major cities. While we have a lot of existing relationships in the Midwest, we also want to grow in markets in the South, Southwest and Southeast.”

A good example of Marcus’ tertiary market strategy is a 2012 deal that pre-dates Rose joining the company. In September, Marcus and its affiliate, MCS Capital, purchased the Cornhusker Hotel in Lincoln*, Nebraska. The company added the Marriott brand to the 297-room hotel and launched a multimillion-dollar renovation that will be completed later this year. The company declined to say how much they paid for the hotel.

Kirk A. Rose
Marcus Hotels & Resorts


“We’re in those (tertiary) cities now, and we’ve had success,” Rose said. “There’s a bias, especially with investor capital from the East Coast, to shy away from those markets. You must be one of the top two or three hotels in your competitive set, but there’s no reason to shy away.”

He added the service model might need to be different and the product doesn’t need the same kinds of finishes as do hotels in top 10 markets.

“You can’t build The Plaza in Des Moines (Iowa) and think you’ll make money,” he said.

Growth through third-party management contracts will be selective, Rose said, depending on properties’ locations and profiles. With 20 properties in the Marcus portfolio, he said it wouldn’t be prudent to quickly add 10 more hotels.

“We wouldn’t take (a management) agreement in Seattle just to grow, but we would go to Seattle if it made strategic sense to do so,” he said. “One of my fears is that we grow too fast. We won’t want to risk our reputation as a good operator and partner just to add another hotel.”

Select-service lifestyle
Rose also has interest in the burgeoning lifestyle hotel niche. He admires brands like Hilton Garden Inn and Hyatt Place for their abilities to steal market share from traditional suburban full-service hotels. He also sees value in the service models of branded boutiques such as Aloft Hotels and Hotel Indigo. For Marcus, the opportunity might be in lifestyle hotels that embrace the select-service operating model, Rose said.

“We’re in the exploratory stages for this kind of product,” he said. “It’s even something we could do ourselves.”

While Rose doesn’t see Marcus expanding to markets outside of the U.S., he believes the company could find opportunities in resort properties. Again, selectivity is the key, he said.

“We would be interested in value-add opportunities where we could use our balance sheet and operating expertise to reposition properties and make them more competitive,” he said.

A family connection
For Rose, the move to Marcus was a natural progression. Before Salt Creek, which was headed by former Global Hyatt President Douglas Geoga, Rose spent nine years at Hyatt, including six years as senior VP and CFO. Like Hyatt, Marcus is a firm founded by a family that’s still very involved in the company.

“It’s very similar to Hyatt in that it is a family culture where the Marcus family is very involved in the local community,” he said. “It creates a dynamic that’s less based on short-term profits and more on long-term investment success.”

He’s optimistic for the future of Marcus and for the hotel industry, despite ongoing uncertainties in the economy.

“The leisure traveler continues to travel and business travel remains strong, but group business hasn’t come back from 2007-2008 peaks,” he said. “It’s been a time of slow, steady growth without a lot of new supply, which has helped us, but if supply comes back, we could have some hiccups.”

*Correction, 2 April 2013: The original version of the story incorrectly stated the Cornhusker Hotel is in Omaha, Nebraska.

3/29/2013 2:58:00 PM
Its Lincoln Nebraska where they purchased the Cornhusker, not Omaha.
Login or enter a name   Post Your Comment  Check to follow this thread via email alerts (must be logged in)
(4000 characters max)

Comments that include blatant advertisements or links to products or company websites will be removed to avoid instances of spam. Also, comments that include profanity, lewdness, personal attacks, solicitations or advertising, or other similarly inappropriate or offensive comments or material will be removed from the site. You are fully responsible for the content you post. The opinions expressed in comments do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Please report any violations to our editorial staff.

Industry CEOs’ opinions on Marriott/Starwood
How independent hoteliers grab direct bookings
Sharing economy might be in Choice’s future
Industry outlook: A crash or soft landing?
Kimpton still grows a year after acquisition
Spanish chains ramp up global expansion
ALIS 2016: LIIC members share opinions
Consultants share trends, advice for 2016
HSMAI Digital Marketing roundtable
Concord embraces change
Red Roof Inn on international track
STR: Airbnb’s impact minor on Manhattan hotels
US hotel transactions list
Wyndham sees RevPAR growth amid oil struggles
Panelists debate the death of legacy brands
5 trends evolving with lifestyle hotels
Hoteliers say Zika virus not hurting demand
Contact Us
Hotel News Now
18500 Lake Rd.
Suite 310
Rocky River, Ohio 44116
Copyright © 2004 - 2016 Hotel News Now, a division of STR, Inc. All Rights Reserved.   Privacy