HP Hotels has been expanding its portfolio outside of the southeast U.S., targeting limited-service, upscale select-service and full-service boutique and lifestyle hotels.
LOS ANGELES—Atlanta-based HP Hotels started out as a regional company, managing hotels mostly in the Southeast. Now it has a presence in 17 states and Honduras with an aim to keep growing.
HP Hotels keeps marching toward the West Coast, President and CEO Charles Oswald said, and it’s looking at locations in Texas, such as Dallas, Austin and San Antonio, as well as Denver, San Francisco, Los Angeles and Portland, Oregon.
The company has some partners along the West Coast, especially in California, Chief Development Officer Kerry Ranson said. Colorado also represents a strong opportunity in 2018, he said.
The company added 10 properties in less than a year, Oswald said, and the asset types are indicative of the direction its heading: limited-service, upscale select-service and full-service boutique. Within the past year, the company added three to five hotels in each of those segments.
“We see more growth just like that,” he said. “We’ve grown to the point where we have 40-some odd hotels now.”
The company also has a few new builds in construction in the lifestyle segment, he said, as well as a handful of deals in the pipeline in the select-service and full-service segments.
The goal is to grow the company, Oswald said, but the day he can’t name every hotel in every market is the day when the company, which currently has almost 2,000 employees, would be too big.
“We always want to be in touch with the properties,” he said. “We want to personally interview each GM and director of sales. At some size, you lose that ability. (The overall size) depends on the mix of product and geography and clients.”
It’s not about being the biggest, Ranson said.
“We just want to continue to be best in class with it,” he said.
HP Hotels is primarily a third-party management company, Oswald said, but it does have some sponsor equity in a couple of the deals it’s made.
“We’d like to grow that segment of our business as well,” he said.
The company acts like a matchmaker, he said, working with opportunistic private equity funds to find the right deal.
The company recently opened a converted 382-room full-service Hilton in Nashville, Oswald said. He believes it was a great value-add for a private equity fund, and HP Hotels worked with the investor to identify the hotel as an opportunity, make the branding decisions and generally help through the whole conversion process.
“We were able to add a lot of value to that asset,” he said. “It could nearly double in value this time next year because of what we’ve brought to the table there.”
Relationships in the industry that the company has fostered over the years allow it to connect with others who are looking to dispose of assets to make deals like this happen, Ranson said.
“They’ll come to us and say, ‘We’ve got some of our assets we’re trying to dispose of. Does it meet some of your groups’ needs?’” he said. “That allows us to say that we have a group where that’s a value add. We’re looking for long-term yield play that meets the need for a full-service or limited-service perspective.”
It’s important to HP Hotels that everyone in the company knows what it stands for and what its expectations are, Ranson said. It’s equally important for employees to feel they are part of the company’s growth, and that they can speak up to offer suggestions for improvement.
“We continue to grow people,” he said. “That makes it special. … As we take on additional sophisticated clients and more complex assets, it requires that we continue to not just grow people but develop business acumen and fine-tune the processes.”