Hogan Hospitality accelerates expansion with Marin deal
 
Hogan Hospitality accelerates expansion with Marin deal
08 NOVEMBER 2018 8:54 AM

By acquiring a majority share of Marin Management Inc. and its 17 U.S. hotels, Hogan Hospitality Group has grown its management portfolio beyond its home state of Hawaii.

HONOLULU—Hogan Hospitality Group CEO Gary Hogan described his company’s acquisition of Marin Management Inc. as adding a new member to his family.

On 18 September, Hogan Hospitality Group acquired a majority stake in Sausalito, California-based Marin, adding Marin’s 17 hotels—located in California, Arizona and Texas—to its management portfolio of five Hawaiian hotels positioned under the Hawaiian Hotels & Resorts name.

Hogan said his company was interested in expanding its portfolio beyond Hawaii, and a meeting with Marin Founder and President John Manderfeld yielded mutual interest in a partnership.

“We were introduced in L.A. to John, and he wasn’t actively pursuing a sale, but a mutual friend thought it might be good if for us to talk,” Hogan said. “We realized we’re both family businesses, we both have the same goals, and it just made sense.”

In a news release announcing the deal, Manderfeld echoed Hogan’s sentiments about the two companies’ similar priorities.

Gary Hogan,
Hogan Hospitality Group

“As a family-owned and operated business, we’re grateful to strike this partnership with another family business that shares many of the same values, such as delivering greater growth and greater return on investment for hotel owners,” Manderfeld said in the release. “Hogan Hospitality Group has a long track record of success in Hawaii, a market driven by hospitality, and we are excited to gain their support and resources while working toward new growth opportunities together.”

With Marin’s continental U.S. properties now part of the portfolio, Hogan said his team will continue to seek expansion opportunities mostly along the West Coast.

“We’re definitely in a growth mode; we think the two companies merged together can grow in Hawaii as well as the West Coast,” Hogan said. “We want to kind of stay more on the West Coast, even though we have a property in Texas. I think that’s a good fit for us.”

Hogan said the properties Marin brings are mostly brand-affiliated and have recently been updated.

“A lot of them have already been renovated, which we’ve renovated our hotels, so a lot of them are in really presentable shape,” he said. “Most of them have a franchise on them like a Hilton Garden Inn or Ramada, so they have brand standards they have to adhere to, so that helps. During due diligence, we went through and toured all the properties and were pleasantly surprised.”

Despite Hogan Hospitality Group’s majority stake in Marin, Hogan said the Marin name isn’t going anywhere, and the business practices Manderfeld has put in place will be enhanced, not replaced.

“It’s going to keep the Marin name; he’s built the good name,” Hogan said. “We don’t have to have our name out there, and I say that with hotel owners and to John as well. It’s not about an ego, it’s about keeping everybody comfortable and moving in the right direction.

“We purchased the majority shares of the company, but again we’re only in the background with support, so we’re working with their operations and sales teams, and already we’ve changed over the accounting systems, which they’re ecstatic about. We changed their website, (as well as) some of their marketing and sales.”

He added that overall the transition has gone smoothly.

“It’s been really good, the feedback from the staff,” Hogan said. “You take over a company, and everybody’s nervous and aware of what’s going to happen. But we’ve been in business as a family business since 1959, so we don’t acquire things and strip them down and try to make profits on different sectors of it. We look long-term at building a really good structure and a good family business.”

Hogan said a possible economic downturn didn’t dissuade either side from the deal.

“I think the economy’s still got some legs on it,” Hogan said. “Marin Management does a really good job when times are tough; they come in and help owners with their properties. That’s another aspect that looked good for us. In fact, banks contact John when hotels are in receivership or such to help get them through the process.

“John builds the relationship and when the property is sold or acquired by somebody else, he keeps managing it. He builds a good reputation for himself and his company, so it’s kind of two-fold. We’ll look at the good times, but even during a slowdown we have opportunity for growth.”

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