Interstate CEO focuses in on people in 2018
Interstate CEO focuses in on people in 2018
25 JUNE 2018 7:54 AM

Interstate Hotels & Resorts CEO Michael Deitemeyer believes putting in effort to lure and “incubate” talented people will help propel his company forward even in the midst of a tight labor market.

NEW YORK—If there’s a theme for Interstate Hotels & Resorts in 2018, it’s people.

President and CEO Michael Deitemeyer, beginning his second year at the helm of the company, said he made several C-suite level changes to “bring a fresh perspective” and is keying in on ways to enrich employees.

“We’re doubling down on our investment in people,” he said in an interview during the NYU International Hospitality Industry Investment Conference.

New additions to Interstate’s executive team include SVP of F&B Fernando Salazar, CDO for North America Greg O’Stean, CHRO Carrie David and CMO Andrew Jordan, all of whom joined the company in the first half of 2018.

“I’m excited about the team and think we’ve got great people,” he said. “I know what we’re doing resonates on paper with our owners and new partners. Now we have to walk the walk.”

Much of Deitemeyer’s first full year on the job was dedicated to establishing a companywide culture, which involved what he called a “road show” of meeting people operating hotels for Interstate in various markets.

Recognizing the hotel industry has to cope with a historically limited pool of available labor, Deitemeyer said he believes his company’s size and scope can provide unique career paths, and he has focused on training and incubating talent.

Deitemeyer said his company is taking a multi-tiered approach to address staffing issues, including “putting a new level of accountability in contract labor” and setting “better productivity standards.”

Growth areas
Deitemeyer said Interstate is focused on a few key growth areas, both in terms of geography and segmentation. After a string of deals in late 2017 and early 2018 that added a significant number of select-service hotels to Interstate’s portfolio, the company is now keyed in on growing its upper-upscale full-service portfolio.

“About 90% of our deals now are full-service, and we expect that to sustain,” he said. “We want to balance our portfolio more. We’re looking at diversification of ownership groups.”

He also pointed to Central Europe as a space primed for growth, especially after Interstate opened a new office in Amsterdam.

“We announced a few months ago that we added 20 signed management contracts in Central Europe … and right now, we’re focused on getting Central Europe stabilized,” Deitemeyer said.

He said the concept of third-party management in hotels is not as well established in Central Europe, which provides the company with both opportunities and challenges. Interstate is currently linked to just a couple owners in the region, but expects to grow more quickly once it can strike deals with “four or five” ownership groups, he said.

The company also has been keying in on various verticals, including independent hotels under the company’s Intrigue Hotels & Resorts collection, along with resorts, luxury hotels and group convention-focused properties.

In addition to finding new properties, Deitemeyer said Interstate is putting a renewed focus on finding ways to improve retention among existing properties and has added more members to the company’s development team.

“We’re primarily focused on when owners are selling hotels (we manage),” he said. “In the (third-party management) space, it’s normal for managers not to be retained (when ownership changes). So we’re bringing buyers to the table for assets we work with to help maintain a higher level of retention.”

He said the company is setting specific goals against achieving a lower level of churn in its portfolio.

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