As a management company with 20 properties in the western United States, Twenty Four Seven Hotels seeks to strike the right chord with its ownership clients. Hotel News Now sat down with company President Drew Hardy for a video interview at The Lodging Conference.
PHOENIX—The growing Moxy hotel brand is the perfect fit for Twenty Four Seven Hotels to stay in tune with changing customer demographics and the hotel industry in general, according to President Drew Hardy.
“We’ve had a lot of fun with this brand—it is a fun brand by nature,” said Hardy during an interview at the recent Lodging Conference while speaking about the 186-room Moxy Tempe, Arizona, which is the first Moxy property in the U.S.
“We’re in the perfect market for it, with the largest university in the U.S.,” he said. “Tempe is kind of known as a hipster haven, so a lot of good things going for it from the psychographic/demographic standpoint for the brand. We’re looking forward to some big things out of it.”
Twenty Four Seven opened the property in March. It is now one of six open properties for Moxy, a millennial-focused brand that Marriott International launched in Milan in 2014. Hardy said Twenty Four Seven has seen a steady performance from Moxy Tempe, which is one of 20 hotels in the management company’s portfolio.
The property’s vibe in large part comes from the company’s passion for music—it embraces the notion that its ethos is rooted in a love for music and what music stands for, according to its website. Thus, everything from the classic album collection in the lobby, the Rogue acoustic guitars and record players in some of the guestrooms, and even the staff calling GM Curtis Pandes the “captain” helps focus the hotel’s persona, Hardy said. Developing that look and feel was done hand in hand with Marriott’s design team.
“It was a very wide learning curve,” Hardy said. “(Marriott is) the smartest in the industry when it comes to branding and consistency and pegging a segment for years of focus groups and figuring out as brands are developing these transgenerational lifestyle hotels … So there was a lot of collaborating up front with Marriott.”
There were a number of stops and starts during the process, which also included unique aspects to the converted hotels—including guestrooms that are generally larger than typical Moxy guestrooms, Hardy said.
“It was one of those situations where you are basically building the plane as you’re flying it,” Hardy said. “Lots of intense upfront collaboration with the brand design team and trying to take their vision and then put it into practice and develop the specs, and not only the cosmetic look and feel of the property but also the energy and the vibe and the personality.”
12 years for Twenty Four Seven
CEO David Wani and Hardy launched Twenty Four Seven in 2004. Its portfolio includes hotels in California, Nevada, Idaho and Arizona.
It will continue to seek “controlled growth” west of the Rocky Mountains—within a 90-minute flight of its Newport Beach, California, headquarters, Hardy said. Half of the portfolio is in the Marriott family of brands, but it also has properties branded in the Hilton Worldwide Holdings, Hyatt Hotels Corporation and InterContinental Hotels Group portfolios.
“Not only is it important to us that we focus on our brands and our segments, we think it’s very important just geographically,” Hardy said. “We like to have that constant touch with the property. You start to get outside that focus and it changes the whole mode of operation for you and we just don’t feel we can maintain that same personal touch with the property and that interaction that you’d otherwise have. I couldn’t imagine taking a one-off deal in Hawaii and having to send someone out there five hours each way and giving that property the attention that it needs from a personal contact.”
Twenty Four Seven has seven hotels in its pipeline and is open to conversion and new-build projects, Hardy said.
“If the profile of the opportunity fits in our bread basket, we’re going to figure out a way to get it done,” Hardy said. ”It just happens at that point we’re at in the cycle we’re seeing a lot more development opportunities. I still see a healthy pipeline of new-development deals in some of our ownership groups that want to continue to get into certain markets where they’ve either controlled sites or they currently own sites.”
Twenty Four Seven has a number of private-family, office-building owners and high-net-worth individuals as clients, he said.
“That side of our ownership is a strong growth position for us,” Hardy said. “We have also moved more toward some private equity and institutional-type owner relationships, which we also see as a key to our future growth.”
Adding value to assets over the long term in an essential part of the business model, he added.
“A lot of our growth (has) come internally with our ownership portfolio, so as we’re able to not only grow profitability of their hotels but add asset value it’s helping them to leverage in to adding more properties,” Hardy said, “and so we’ve had a lot of good organic growth of owners adding new acquisitions over the last couple of years as their hotels have done well.”
Growing its footprint and its bench
Twenty Four Seven would like to maintain a pace of adding four or five properties a year to its portfolio, Hardy said.
“We like the idea of the advantages of clustering in an area so we can get better economies of scale,” Hardy said. “There’s no magic number where we want to end up at the end of the day.
“But one thing is for sure: As we continue to grow we’re going to make sure that we get the right people, the right talent and get our depth in our bench built out appropriately so we’re ahead of that growth and we continue to provide the service and responsiveness that our ownerships have come to expect from us. We don’t want to ever stray from that course just for the sake of growth.”
Finding good people to hire is the biggest challenge for companies such as Twenty Four Seven, Hardy said.
He cited heightened union activity, minimum-wage increases, competition from online travel agencies and sharing-economy lodging companies, and other regulatory issues as things management companies are grappling with in the current environment.
“We try to keep ourselves in a position to be able to react quickly and be responsive to issues that we’re going to face,” Hardy said. “Everybody’s facing some of the same issues, and there’s always someone smarter or doing something better. They’re somewhere out there, so if you keep your eyes open you’re going to find the right way to handle these.”