By bringing back co-founder Kerry Ranson to HP Hotels’ management team, Chairman & CEO Mike Hines looks to expand the company’s third-party management business by focusing more on full-service hotels.
PHOENIX—Kerry Ranson wants to get the full picture during his second time around with HP Hotels. Full as in “full-service.”
Ranson rejoined Birmingham, Alabama-based HP Hotels—a third-party management company he co-founded with Mike Hines in 2002—in April after a six-year hiatus. His focus as its chief development officer is to advance its footing in the full-service hotel space.
“That (initial) model and the efficiencies there and the systems we put in place allowed us to grow into the full-service space,” Ranson said during a break at last month’s Lodging Conference. “There’s a big opportunity for us to get more into that.”
Mike Hines, HP Hotels
HP has 38 hotels in its portfolio—28 for which it provides full management services and 12 for which it supplies accounting and revenue management services. Of the 38, 25 are operated under various Hilton flags—including 12 Hilton Garden Inn properties. HP has sliver equity in two of the properties it manages.
The company was launched 14 years ago using midscale and upscale select-service hotels as its foundation. It now has four full-service properties in its full-management portfolio.
Among the early additions is a 383-room property near the Nashville, Tennessee, airport that is being converted to a full-service Hilton. Ranson said he is pleased that a property with significant corporate business and sizable meeting space is part of the portfolio. That, along with the 250-room Campbell House Curio in Lexington, Kentucky, represents the type of properties the company is interested in adding to its full-service portfolio, he said.
“It’s not necessarily where we’re looking for it; it’s where people are looking for us,” said Hines, HP Hotels’ chairman and CEO. “We used to hear they want a management company that’s local to their area, but that’s become irrelevant because of access to information. We can all be market experts in 24 hours with the right information.”
Kerry Ranson, HP Hotels
Ranson said HP has no set number in mind for the hotels it wants in its system. He and Hines simply want to use efficiencies the company has developed to their fullest extent. That’s where delving into the full-service sector comes into play.
Feeding all sides of operations
Food-and-beverage operations are part of the learning curve when it comes to operating full-service hotels, and HP has jumped on that in a big way, the executives said. Working with local chefs and concepts is an important way to achieve success in the F&B space, Ranson said.
Hines said that doesn’t mean the company won’t partner with professional F&B companies to tackle more complex operations when needed
The company is developing a hierarchy that allows F&B operations and hotel operations to co-exist while retaining some independence.
“We think we can peel (F&B operations) off to run it efficiently without entirely separating it (from hotel operations),” Ranson said, noting that efficiencies include labor, accounting and other back-of-house elements. “There’s a niche to be had on the true full-service side by having an operational wing that’s not only efficient on the hotel side but the restaurant side, too.”
The F&B plan filters down to the new trend of redesigned lobbies to accommodate gathering spaces for guests, Hines said.
“One of the best things in the world was focused-service properties redesigning lobbies so people can be alone together,” he said. “There are more choices coming down to F&B in the lobby. Even at full-service hotels, guests don’t view room service as a luxury any more. They’d rather be in the lobby space.”
Returning to his roots
Ranson left in 2010 to work for New Orleans-based Expotel Hospitality and be closer to his family in his hometown. He eventually became Expotel’s president and COO before rejoining HP in April 2016.
Ranson said he enjoyed his time with Expotel, but he had unfinished business with HP.
“First and foremost coming back was a deep-rooted relationship with Mike and the things we started with HP back in ’02,” Ranson said. “It’s about having fun and being the best we can be. It’s not always about being the biggest; it’s more about being the best in class and respected.”
The two executives join Charles Oswald, president & COO, and CFO Joseph Powers as the company’s core management team.
Hines said Oswald’s arrival in 2012 helped to take the original foundation of HP to a new level.
“He’s been able to take the idea Kerry and I had and focus it in on operational and technology,” Hines said. “Now we needed someone to go out and sell it. The best time I had in the business was with Kerry so it made sense for him to come back.”
Further growth plans
Now the plan is to grow its client base.
“It’s putting analytics and personality together,” Hines said. “We manage the numbers, bring in the revenues, and the clients have the belief in us.”
The executives said there is no geographical preference for growth, and the company will get creative to expand its footprint.
“The next stage of growth is adding additional seed money to management contracts,” Hines said.
He noted that one possibility to add value to deals is for HP to pay for a property’s renovations when the owner signs a long-term management contract with the company.
“When you look at things through an entrepreneur’s lens, and having ownership and management experience, you look at where value can be found,” Ranson said. “Our job is to help an owner build a portfolio without falling behind the times.”
Hines said HP has diversified its client base from families that own and operate and high net-worth individuals to private equity funds, institutional money and real estate investment trusts.