Donohoe Hospitality Services, under the leadership of President Thomas Penny, has kept its momentum with portfolio growth over the past five months. And equally important, his team has prioritized its people to maintain and build relevant leaders.
WASHINGTON—Donohoe Hospitality Services has on-boarded five hotels to its system over the course of the past five months, showing little interruption to its momentum, according to Thomas Penny, president of the independent management company.
While Penny’s company, which also specializes in asset management, consulting and development, did experience some pandemic-related project delays due to local restrictions, furniture, fixtures and equipment delays and working to ensure safety of construction crews, it was “not too great of a period of disruption.”
Donohoe recently opened a dual-branded Hampton Inn & Suites/Home2 Suites by Hilton Las Vegas, adjacent to the Las Vegas Convention Center, which is already performing well, he said. *Additional new openings include a new-build 156-room Canopy Baltimore Harbor Point in Baltimore and the 135-room Homewood Suites by Hilton in Reston, Virginia.
“Within the first week of (the Las Vegas property) opening, we almost sold out,” he said.
The company at a glance
With a 136-year history, Penny said Donohoe began in the commercial real estate business in 1884, then transitioned into owning hotel assets. In 2005, it began managing both owned and third-party hotels.
When it first formed its management arm, the organization was regionally focused but has since expanded to a national focus. He said its sweet spot consisted of extended-stay brands, like Residence Inn, and select-service hotels, like Courtyard and Hilton Garden Inn.
The first hotel Donohoe invested in was a 536-room Holiday Inn in Washington, D.C., which the company still owns today.
Three years ago, Penny said his team saw the future of its business pivoting towards millennial travelers and folks looking for experiential stays.
“We started to take a look at lifestyle leading brands, and as a continuation of that idea, we partnered on an Autograph that we opened in May 2018 in Charlottesville, Virginia,” he said.
*Today, its portfolio of opened hotels ranges from brands including Holiday Inn, Residence Inn, Hyatt Place, Hilton Garden Inn and Homewood Suites.
Hotels in the pipeline include more under the Cambria, AC and Autograph flags in Virginia, Washington, D.C., and Portland, Maine, he said.
“We also expect that there will be some hotels that will come available between now and the first half of 2021,” Penny said. “We’re going to evaluate those deals closely to see if there’s an opportunity to potentially acquire—if the deal makes sense.”
Donohoe’s focus now, like many in the industry, is cash preservation, ensuring the safety and security of guests and associates, and getting them ready for where business could be headed.
“Our industry is changing before our eyes, and we want leaders that will be relevant as we go through these changes,” he said.
Challenges and wins during 2020
Penny said his team had to make some hard decisions this year.
“I’ve been in the business almost 30 years; I’ve not ever seen anything remotely close to this. We had to develop new operating models that reflected the occupancy levels on a per-hotel basis. It required everybody to do a bit more from the home office to the field,” he said. “We tried to make certain that we (were) available to our leaders to help solve some of the challenges.”
He said showing appreciation to associates is key during this time. For example, his team delivered gift cards to all its GMs ahead of the holiday season.
Despite challenges, there were some opportunities that came about from the pandemic, he said. Among those opportunities include gaining new talent.
“There has been a great deal of talent that has come available as a result of many of the major brands and companies (having) to shed some payroll costs,” he said. “We’ve been able to grab some talent that we would not have been able to attract otherwise.”
In the spring, his company was able to hire a CFO and other new leaders, he said.
Initial adjustments, strategies
At the onset of the pandemic, mixed in with a period of protests and counter-protests, Penny said his team deployed more resources for both sanitation and security through products, tools and people.
In terms of cutting costs, Penny’s philosophy was simple: “If it’s not essential, not spending it.”
He said the brands have worked with Donohoe to relax standards that were not deemed necessary right now.
“Our strategy really has been … to do as much as we can to take care of our people. We believe our people are the heartbeat of our business,” he said. “In most cases, with one or two exceptions, when we have the (Paycheck Protection Program) funding, we use the funds to take care of our people … and maintain health insurance.”
In terms of strengthening stronger working partnerships now, he said it’s all about increased communication. During this cash preservation period, ownership partners want some level of certainty.
“This period of uncertainty creates anxiety for everybody. In order to make certain they understand what’s happening in real time, we have to communicate more frequently, and we’ve had to be accessible, more responsive to questions and concerns that may have been brought forward,” he said.
Penny said his team has adjusted to be more hyper-supportive and hyper-responsible.
Aside from the toll the pandemic has had on Donohoe’s team, its guests and their families, he said “those of us who live for our industry’s most complicated challenges, this is why we play the game.”
Commitment to diversity
Penny said the recent months have also highlighted the need for diversity within the hotel industry.
“We have some in our industry that have done an amazing job. We have some in our industry that still have a great deal of work to do. We all can do a little bit more. But there’s some that need to really take a radical look within their organizations to ensure young people, women, folks of diverse backgrounds have the opportunity to soar to the top,” he said.
The industry has not always been hospitable to folks of diverse experiences leading organizations, he said, “and I am incredibly proud that our leadership team, when we look at the home office leadership team and the GMs we have at hotels as one collective, is almost 60% female, roughly 38% white Americans, 33% African Americans, 13% Asian Americans, 8% Latino Americans and 8% Turkish Americans.”
Donohoe’s leadership team instills within every employee that there is room for them to advance in the organization, he said. And now more than ever it’s important the industry sends that message, he said.
*Correction, 1 December 2020: This article has been updated to clarify the company's recent openings activity and the brand makeup of its portfolio.