NYU notebooks: Growth opportunities abound
 
NYU notebooks: Growth opportunities abound
30 JUNE 2017 7:22 AM

Executives from Expotel Hospitality, Extended Stay America, LW Hospitality Advisors and Meyer Jabara Hotels chatted with HNN during breaks at the NYU International Hospitality Industry Investment Conference about new growth opportunities this year and beyond for their companies. 

NEW YORK—From brands to owners to management companies, hotel firms are actively seeking new ways to grow during this phase of the economic cycle. Executives from a variety of companies shared their plans and strategies with HNN editors during the recent NYU International Hospitality Industry Investment Conference.

Expotel Hospitality
Expotel Hospitality is moving into the next phase of its growth with new President and Chief Development Officer Larry Spelts at the helm.

Spelts joined the New Orleans-based hotel management and development company this past spring, and has plans to leverage his own diverse hospitality background to take Expotel in some new directions while strengthening its current wheelhouse of branded hotels.

Expotel has 12 hotels in its portfolio, representing Wyndham Hotel Group, Hilton, InterContinental Hotels Group and Marriott International brands.

“What Expotel is doing is making the pivot from being the management company of its owned hotels, to third-party management,” Spelts said. “We have several third-party contracts in place; we have equity positions in some. We’ll continue to invest in a minority position as needed to get management contracts.”

Spelts’ most recent position as VP of development for Charlestowne Hotels—and past roles with Relais & Châteaux and Rosewood Hotels & Resorts—give him experience on the independent side of the business, which is something he thinks can help diversify Expotel.

“Urban, independent, historic, boutique hotels are in Expotel’s DNA—the company has had them in the past and doesn’t have any currently,” he said. “We look at those as being highly desirable, and we have opportunities to do them. We also love our franchise flag properties, and we’ll continue to pursue those.

“We’re not going to limit ourselves. We have a history with development, whether that’s renovation, repositioning or new builds. Whether we do an independent, soft brand or flagged hotel, we have the opportunities.”

Spelts said the “low-hanging fruit” for Expotel right now is to pick up a hotel or two in its hometown of New Orleans: “Expotel has in the past both built and operated hotels there. We don’t currently have any in New Orleans.”

Extended Stay America
Extended Stay America’s future will include a robust franchise model, new-build hotels for the first time since 2007, a new design prototype and an asset sales strategy, all designed to evolve the company into its next stages.

“This is the right time for us because we’re coming off a restaging of the company following its bankruptcy. It took time to get hotels renovated, to get the organization and leadership team in place,” said ESA CEO Gerry Lopez. “As we go forward from here, it becomes a question of, what’s the next part of the journey?”

The company filed for Chapter 11 bankruptcy protection in 2009, and launched its initial public offering in 2013. Lopez joined as CEO in 2015.

Launching a franchise model has been in the works for the extended-stay brand, and it’s an expansion plan Lopez said is timely because of both growing customer demand and the operating efficiencies of the company.

Lopez said the company’s goal is to grow the portfolio from its current 625 properties to 700 by 2021, with approximately 70% owned and operated by the company and 30% franchised.

Part of the company’s plan also includes selling portfolios of its owned properties to franchisees, who in turn will build additional properties to get the company to its target makeup.

“There’s always an appetite for these high-cash-flowing properties,” said Jim Alderman, EVP and chief asset merchant for the company. “We will likely sell maybe 100 to 200 to seed our franchise system, to people who will convert them to franchises and commit to continue.”

Lopez said the company is seeking partners to take on these portfolio sales who are already in the business, have the financial and operational wherewithal to access capital and have a team.

“We’re not into onesie and twosie sales,” he said.

As for franchise fees, the company is keeping the structure “really simplified,” Alderman said.

“We’re coming out with a 5% program fee plus a 5% royalty fee,” he said. “This way, developers know exactly what they pay.”

The company has worked through a $1-billion renovation and capital improvements plan over the last five years. The next iteration is a plan executives call ESA 2.0, which features a new-build hotel prototype design for the next round of hotel development.

The company hasn’t built new hotels since 2007. The new prototype covers a footprint of 110 to 120 rooms, Alderman said, and responds to how guests actually use their rooms. Amenities include an expanded lobby space, open shelving and flexible workspace in the room.

LW Hospitality Advisors/Meyer Jabara Hotels
Officials with LW Hospitality Advisors and Meyer Jabara Hotels plan to forge some new ground for their companies with a deal for a five-property portfolio in North Carolina and South Carolina.

Meyer Jabara will operate the properties while holding a minority stake, with LWHA serving as asset managers and representing the interests of investors in the majority owner NCSC Hospitality Portfolio LLC.

The deal marks the first such collaboration for the companies. Gary Isenberg, LWHA’s president of asset and property management services, said it also marks a beginning to the company’s newfound focus on select service.

“This is all the beginning of kind of a master plan to grow, develop and acquire select-service hotels in secondary markets,” Isenberg said. “And when I say secondary, I mean growing markets. And that could be growth from a retiring population moving in, hospital and medical center growth, university towns, convention center growth, things like that. We found the Carolinas to be markets where there is heavy retirement movement. And these are markets that are somewhat recession-resistant.”

Meyer Jabara has similar plans to grow in the select-service space. Justin Jabara, VP of development and acquisitions for Meyer Jabara, said his company has decided to ramp up its growth pace to “much more aggressively go after certain markets and certain asset classes.”

“So when this opportunity presented itself, with LW coming to us with this portfolio, it checked a couple boxes,” he said. “The first one was we have been working on growing through portfolio acquisition. Second of all, we’ve been looking at this class of hotels as an area we want to grow in.”

The hotels represent more than 500 rooms under the Fairfield Inn, Holiday Inn Express and Comfort Suites brands. There are plans to invest roughly $5 million for renovations and improvements at the five hotels.

Hotel News Now Stephen W. Brener Silver Plate Award
The 2017 recipient of the Stephen W. Brener Silver Plate Award was AccorHotels Chairman and CEO Sébastien Bazin. Bazin oversees a company with more than 4,200 hotels around the world and nearly 250,000 employees, and has in recent years expanded AccorHotels’ footprint to a number of ancillary businesses to diversify its position on the global hotel scene.

In his four years as CEO, Bazin has spearheaded the company’s acquisitions of Mama Shelter; Fastbooking; FRHI Holdings Limited and its Fairmont, Raffles and Swissôtel brands; Onefinestay and more. He launched a new hotel-hostel hybrid called Jo&Joe, opened the company’s distribution platform to non-affiliated independent hotels, and oversaw several large portfolio sales.

The Stephen W. Brener Silver Plate Award is awarded annually to recognize an executive, entrepreneur, company or association in the hospitality industry that has shown exemplary efforts in promoting the hotel and tourism business. The award is named for the late Stephen Brener, career hotel industry executive and co-organizer of the NYU International Hospitality Industry Investment Conference.

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