Hotel News Now spoke with hotel executives at The Lodging Conference about their plans to grow their companies and more.
PHOENIX—The industry might be wondering when the next downturn will take place, but it’s business as usual for some companies.
During one-on-one interviews with Hotel News Now at The Lodging Conference, executives from Meyer Jabara Hotels, InterContinental Hotels Group’s Atwell Suites, Stonehill Strategic Capital and Remington Hotels shared insights into what their companies are working on.
Atwell Suites focuses on design
Since IHG’s launch of Atwell Suites on 15 May, the team has been working on franchise sales efforts and the extended-stay, select-service brand’s overall image, VP of Atwell Suites Jennifer Gribble said.
An exterior design for the brand’s hotels was unveiled in September.
“This brand has a really strong design point of view,” she said. “We’ve essentially layered lots of textures and patterns and natural pigments to create something that’s really unique because we know that’s important to the guests that we’re targeting.
“These are people early on in their careers. They are looking to grow through their work and through travel. And they love to discover new things, including style and design, so we wanted to have that strong point of view.”
Gribble said Atwell Suites is expected to be a large-scale player in the industry that works well in many different market types.
“So far, we haven’t identified where the first groundbreakings will be but … we already have a strong sense of momentum, and we’re looking forward to seeing how signings materialize from here,” she said.
Meyer Jabara continues growth streak
It’s been a high-growth year for Meyer Jabara Hotels, according to VP of Development Justin Jabara.
Most recently, the company signed a deal to manage the Benchmark Development-owned new-construction Hampton Inn by Hilton in Verona, New York; and opened the Cambria Hotel Boston, Downtown-South Boston as the third-party manager for developer City Point Capital.
The company also has several projects in construction that it will manage, including the Cambria Fort Lauderdale, and a Cambria in Morristown, New Jersey.
“From a strategy perspective, we continue to be diligent in our partnerships and projects,” Jabara told Hotel News Now. “We invest heavily into select buckets of brands and markets, and while we’re primarily East Coast, we have been national and we’re pushing west of the Mississippi.”
Meyer Jabara has upcoming projects in Kansas City, Missouri; as well as Michigan, Arizona and Las Vegas, Nevada.
Jabara said the company is an equity partner of various degrees in about two-thirds of its portfolio, and only third-party manager in about one-third. The company has 28 hotels open or under development, primarily in Choice Hotels International, Marriott International, IHG and Hyatt brands. The company also has three independent hotels and one soft-branded hotel in its portfolio.
Looking ahead, Jabara said the company will have “a strong end to 2019, and in 2020 we’ll crest 30 hotels. We have a lot of hotels opening, and we have some fledging relationships that are maturing nicely and have a lot of promise.”
Jabara said that while its 42-year-old bedrock of a strong culture and partnerships remains, the company has grown and matured in the last several years.
“The investment thesis of how we’ve always had ownership in our own portfolio is the same. We don’t do receivership, we don’t take short-term contracts and we will continue to invest equity into deals,” he said.
On the operations side, he said, the company continues to take inventory of its services and offerings to ensure everything is important, cutting-edge and beneficial.
“We have revenue management, call centers, purchasing, design and construction services, risk management and IT,” he said. “We’ve challenged our team to look hard at our investment and make sure what we’re providing is what’s needed. Through that we’ve come up with some exciting new initiatives. We’ve rewritten our software, we’re leveraging technology … we’re adding regional sales managers, we’ve added revenue analysts to our team.”
“The big message is that growth is great, but we also need to make sure we continue to be best in class and focus on talent,” he said.
Remington Hotels adds new capacity
It’s been several months since Ashford Inc. announced it would acquire the third-party management business of Remington Holdings, and in that time, Remington has added to its leadership bench and planned new strategic moves.
“We hired Jarrad Evans as chief investment officer, and 100% of his energy will go to growing our third-party business,” Remington COO Sloan Dean told Hotel News Now.
Next up is growing the company’s development business, Dean said.
“New for us, we’re going to start doing key money and co-investment,” he said. “(So far, our REIT partners) have been the equity. Now Remington will co-invest, which will allow us to differentiate ourselves.”
Dean said Remington will seek institutional capital partners invested in mid- to long-term holds.
“Our three categories are private equity looking at an average deal size of $30 million to $250 million, family office and certain REITs,” he said. “We’re happy to co-invest alongside other REITs. We can manage for public companies as well.”
Remington’s portfolio has 86 hotels, the majority of which are Embassy Suites, full-service Hiltons, full-service Marriotts and full-service Sheratons. The company also manages a handful of independent hotels from coast to coast. Most recently the company added the management of the Hilton Old Town Alexandria in Alexandria, Virginia.
On the operations side, Dean said the company has more than 100 initiatives going on now to improve gross operating profit now and in the future.
“We’ve renegotiated hundreds of service agreements,” which has led to “millions” in savings, he said. “We have strategically not locked ourselves into more than one-year (contracts), and we build in optionality.”
Dean said the company uses a labor-management system to control costs, and he’s participated in the AHLA apprenticeship program and brought housekeeping in-house to be proactive. The company also has been researching automation practices that can improve labor-related processes and save costs, he said.
Stonehill offers alternative financing
Stonehill Strategic Capital President Mat Crosswy said his company has always provided alternative financing, but recently announced increased alternative financing capabilities for PACE, mezzanine and preferred equity financing for hotel projects.
Alternative financing presents good options for conversions and adaptive reuse projects, he said.
“On a macro basis, it seems like everything is going to be more normalized at 2% to 3% growth and relatively moderate,” he said. “With that, we’re underwriting the value created from building a new asset (or) converting to an independent from maybe an office building, where you’re doing adaptive reuse. … You have these old iconic buildings that are great for a stay, everyone wants an experience. Those are the different types of deals we do.”
Stonehill looks at deals on a market-by-market basis, Crosswy said. At this point in the cycle, the company is focused on hotels in the select-service space, under brands such as Hampton Inn and Courtyard, because they tend to be more recession-proof, he said.
“They are more efficient to build, they’re more efficient to operate, and you control your expenses a lot better,” he said.
He added that in select-service, more focus can be directed at selling rooms and controlling expenses rather than selling food and beverage and meeting space.
“If you know there’s market pullback, that’s just additional businesses you have to run, including your hotel, and your margins deteriorate,” he said.