Independents feed Interstate’s ardor to launch division
 
Independents feed Interstate’s ardor to launch division
14 NOVEMBER 2017 9:16 AM

Intrigue Hotels & Resorts by Interstate leader Brian Sparacino points to a hunger for more independent hotels to join Interstate Hotels & Resorts’ system as a key reason for launching the new collection of hotels. 

PHOENIX—Cooked up in a SoHo coffee shop over a year ago, Intrigue Hotels & Resorts by Interstate offers a vast menu of properties for consumers and a smorgasbord of services for owners, according to Brian Sparacino, who heads Intrigue as its SVP of operations.

Interstate Hotels & Resorts’ aggressive acquisitions of other third-party management companies during the past seven or eight years has given it a collection of unique hotels that clearly needed different approaches to management, Sparacino said during a break at the recent Lodging Conference.

“We were at a coffee shop in SoHo chewing the fat, and someone asked how many independents we managed,” he said. “We had to pause, go to our website and sort them. We found we were managing 40 of them worldwide, which at the time put us within 10 (hotels) of Kimpton (hotels & Resorts).

“It inspired us to take a look at the segment that seems to be exploding over major metropolitan cities and leverage the scale of Interstate to see if we can create something cool,” he said.

Sparacino said Arlington, Virginia-based Interstate was careful to not rush the Intrigue concept to market and took it’s time to develop the right approach.

“We don’t call it brand. We’re respectful of our brand partners,” Sparacino said. “It’s a collection with a platform. We secured a reservation system, a guest rewards program, local check-in tech, reputation management. It became a one-stop shop.”

Those back-end services are white labeled as Interstate’s IT department created the system that intertwined them, Sparacino said.

“Few companies can cross sell all their hotels simultaneously and provide perks internationally,” he said.

Hotels retain their name and are managed by Intrigue, Sparacino said. The properties in the collection will mostly be upper upscale chain scale segment.

The company hasn’t released the names of any properties joining the collection, its website references several hotels in Interstate’s portfolio as examples of the types of hotels that inspired Intrigue: Nomo SoHo in New York; Hotel Erwin in Venice Beach, California; The Charles Hotel in Boston; and The Marker in Dublin.

Target markets include New York, Los Angeles, San Francisco, Miami and other places where there’s a large number of upper upscale independents, he said.

A focus on F&B
A common denominator for the collection’s hotels will be food-and-beverage offerings, Sparacino said.

“F&B at times becomes the tail that’s wagging the dog,” he said. “We have an internal F&B department we’re beefing up to be specific to lifestyle.”

In addition, Intrigue is working with chef John Tesar as a consultant to develop the F&B concepts, as well as working with some people with associated with chef Jean-Georges Vongerichten, Sparacino said.

There’s no goal for a set number of hotels for the collection—Sparacino said the team wants to build off the base of hotels that currently reside in Interstate’s management portfolio of more than 430 properties comprising more than 76,000 rooms. Intrigue’s sweet spot is independent hotels that have between 200 rooms and 250 rooms.

“Because we have the ability to scale, our focus is on the independent hotels that could be single units,” he said. “It could be as a solution to one investor, or it could be an entire portfolio.”

Sparacino said such collections appeal to multi-unit owners because it takes the overhead of employing a corporate workforce to handle employee benefits, liabilities and other key requirements.

“If you compare it in a business case and take the infrastructure and hand it over to us to plug it into the platform, the cost savings are tremendous,” he said.

Looking ahead for more
The key to success is allowing the hotels to develop their own lifestyle feel while being on the same operating platform to take advantage of economies of scale, Sparacino said. He defined a “lifestyle collection” as something “that’s indigenous to its location. Each location’s different. Drivers have to be elements that are emotionally connecting to the guest.”

“We work closely with them and allow them to curate what that experience would be for that guest,” he said. “Along with this platform comes a creative director, ad agency, PR firm … people that go in first to analyze the market and look at target customers.”

The business model is to get the hotels to sign on for the long term to build the collection’s reputation and consistency.

“We look for longer management agreements,” he said. “The services are tied into hotel management agreements. You can’t pick and choose … they’re all tied into each other.”

The launch of the lifestyle collection coincides with Interstate’s approaching 60th anniversary in 2020 as well as the arrival of Mike Deitemeyer as the company’s president and CEO.

“It’s not always easy to reinvent yourself,” Sparacino said. “You have a certain mental psyche that serves as a comfortable track where you operate your business. Along with that comes stability.”

“For us, the key to the discussion at the coffee shop was, ‘Let’s put together the technologies and find the best people who work in the space,’” he said. “We’re sitting on top of the hill, now what do we do?”

Sparacino said Deitemeyer’s presence has fit in well with the concept because of his many years of experience at Omni Hotels & Resorts.

“When Mike was interviewing for the job, this became a big part of the job going forward,” Sparacino said. “He has a lifestyle vision. He’s a very creative guy.”

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