With an emphasis on taking care of owners and employees, Prism Hotels & Resorts President and CEO Steve Van says there’s no reason why his company’s recent streak of success should end in 2019.
DALLAS, Texas—Quality is the name of the game for Prism Hotels & Resorts.
As the company seeks growth, as all hotel companies do, President and CEO Steve Van said his company is prioritizing quality over quantity, forging relationships with entrepreneurial owners and striving to be the best-in-class for all the brands the company operates.
“Broadly, I’d say we’re moving forward with quality growth, focusing on the three major brands with (Hyatt Hotels Corporation, Marriott International and Hilton),” Van said.
The company will have several noteworthy additions over the next couple of months, he said. January will see the opening of a new Hyatt property in California’s Silicon Valley and Prism taking over operations of Westin and Sheraton properties, Van said, and perhaps the most noteworthy is the conversion of three Nylo properties to Hilton’s Tapestry Collection soft brand. Prism has managed those properties since July.
Those converting properties include the 200-room Nylo Las Colinas Hotel in Las Colinas, Texas; the 176-room Nylo Dallas Plano Hotel in Plano, Texas; and the 162-room Nylo Providence Warwick Hotel in Warwick, Rhode Island, near Providence.
Van said he’s pleased to see his company, which currently has 35 properties, growing across the nation, from Rhode Island to Silicon Valley.
Prism’s growth “is sort of balanced nationally,” he said. “We just go where our owners needs us, and they go where the opportunities are.”
In terms of opportunities, Van said there continues to be an abundance in the hotel industry, driven at least in part by hotels outperforming other real estate asset classes. He noted his company often takes on owners that are long-term investors in other asset classes like apartments, so Prism is uniquely positioned to enjoy the benefit of that disparity.
“Our core owner is an entrepreneur who has made a lot of money in other business lines or real estate without hotel expertise, and we’re seeing those come through,” he said.
He said he’s hearing from owners that it’s hard to “buy, build or make a decent return” with asset classes such as apartments because of current pricing, and performance in the retail space are well documented, so hotels continue to look good in comparison, even if revenue growth is slowing.
Overall, Van said he’s remains optimistic about the hotel industry.
“New supply isn’t going to be crazy because lenders have been disciplined,” he said. “With a little rate and occupancy growth, it’ll be fine.”
The one cloud on the horizon, Van said, is the fact that labor costs are outpacing rate growth, so companies like his need to put extra focus on containing costs.
But overall, he said strong economic performance should continue, which means the hotel industry and his company will continue to fare well, just maybe not quite as well as some other years.
“There are still opportunities in the hotel business,” he said. “You just have to be more selective than in past cycles.”
Continuing a hot streak
Van described 2018 as “a banner year” and the company has recently won awards for its work, including Hyatt’s 2017 operating excellence award for the Hyatt Regency LAX.
He expects to continue that strong output through 2019, with the goal of five new hotels through the year.
“Our goal will be to continue to improve our performance for owners,” he said. “That will include hiring better and better people, and having better systems for expense control.”
Working to have the best talent and well-treated employees goes a long way in reaching the companies operational goals, Van said, noting in a year of strife between unions and hotel companies that Prism has maintained strong relationships with its union hotels in Los Angeles and Las Vegas.
While the company is focusing on making sure staffing levels are as efficient as possible using a proprietary scheduling system to contain costs, Van also said that keeping employees happy to reduce turnover and insurance costs plays a key role in keeping the labor line-item from growing out of control.
“We always make sure we’re getting the best for our owners, and we’ll continue to do that in the coming year, but we’ve also got very happy employees,” he said. “We emphasize that, and our satisfaction scores for our employees are among the highest in the business.”
He said that high level of satisfaction quickly turns into word of mouth and referrals that helps unearth even more talent. Even with that, the company remains aggressive in finding the best and brightest.
“We put a lot of effort into educating and teaching about (company culture) because it’s competitive out there,” he said.