Tennessee-based development and third-party management group Chartwell Hospitality will be celebrating its 15-year anniversary this fall, and the company’s growth strategy is building momentum.
ATLANTA—Celebrating its 15-year anniversary in 2018, Tennessee-based development and third-party management group Chartwell Hospitality is prepared for more controlled growth.
In 2003, Robert G. Schaedle III co-founded the company starting with about five “highway-type” hotels. Now the company manages 37 hotels—36 of which are branded—and has seven properties in the pipeline, said Jon Benowitz, VP of capital strategy and investments.
From inception, the company solely focused on select service, but now it has moved into the small full-service space.
Select-service, small full-service balance
Benowitz described Chartwell Hospitality’s model product as a premium select-service hotel but “dialed up.”
“We’ll build a Hampton Inn, Courtyard or Hilton Garden Inn but we will add some customized features,” he said. “We’ll also always build concrete, nice brick finishes, mostly to take advantage of having everything the brand brings but also add a little extra that we think (we) might get a rate premium for.”
While select service was Chartwell Hospitality’s first foray into the business, the company also is keen on small full-service hotels with about 250 rooms or less, he said. Three or four properties in this segment are in the company’s pipeline and are located mainly in the Southeast U.S.
As far as market type, Benowitz said Chartwell focuses on going a couple notches above secondary and tertiary markets. The company focuses on areas with multiple demand generators, he said, such as Nashville, Tennessee, and Colorado Springs, Colorado.
Properties in the works include the 210-room Hilton Green Hills in Nashville; the 118-room Residence Inn Green Hills in Nashville; a 244-room Hilton in Franklin, Tennessee; a 168-room Hampton Inn & Suites in Nashville; and a 119-room Home2 Suites by Hilton in Colorado Springs.
The two Green Hills properties are next door to each other, Benowitz said, and are part of a $110-million project, which he describes as a “high-end little hotel complex.”
“It’s a project that’s really going to elevate the market,” he said.
Some of the other projects under development are mixed-use, he said.
“That’s something we’ve become quite skilled at,” he added. “Building as part of larger developments, which require lots of coordination with the master developer … we’ve learned how to kind of make our way (with mixed-use development).”
A key thing the company focuses on is finding balance, tailoring a property to each market it’s in and adding value where possible, he said.
Oversupply not a permanent concern
While Benowitz said there are some strong markets across the United States attracting a lot of supply, he added it will be a temporary blip and will work itself out.
“The problem is it’s very easy to measure supply because you can see it … demand is the thing you can’t see,” he said. “So you (need) to have a little bit of faith, but all of the indicators show that demand is going to be there. Other than a couple temporary blips, we’re confident … the markets we’re in are going to be fine.”
Labor issues require creativity
As a management company that is noticing pressure from the tighter labor market, Chartwell Hospitality is finding creative ways to improve retention, like emphasizing its personal touch and offering career advancement opportunities, Benowitz said.
He said growing the company’s portfolio to 44 properties—once the seven under construction are complete—is one way they are creating opportunities.
“We’re starting to realize the benefits of that size,” he said.
Along with its 15-year anniversary, Chartwell will also be celebrating a milestone of 1,500 total employees, which is something Benowitz said the company is proud of and will support additional growth.
“We haven’t been a grow for growth’s sake company. We’re very owner-oriented, we’re invested in a large part of our hotels,” he said. “We’re so happy that our growth has been controlled and organic, (it) has not been forced at all.”
The company’s 37-hotel portfolio is worth about $1 billion, Benowitz said, and with its next seven properties in the pipeline, the worth of the portfolio should increase to about $1.5 billion.
“We just want to continue to create value … we want to be involved in great projects, we want to help people execute them, create value, generate returns for our owners and that should mean we’ll continue to grow,” he said.