More Latino owners are needed in the U.S., and new owners need to make connections to get their first properties off the ground, sources said during a panel at the Latino Hotel Association Virtual Conference.
REPORT FROM THE U.S.—The number of Latino hotel owners in the United States is lacking, and hoteliers need to work within their communities and with industry organizations to attract more Latino owners, sources said.
During the “Keeping the dream of hotel ownership alive” session at the recent Latino Hotel Association Virtual Conference, Bill Hall, SVP of development at Radisson Hotel Group, said 91% of his company’s hotels in the Latin America region are Latin-owned, but in the U.S., the number of hotels owned by Latinos is less than 1%.
That less than 1% is an issue across the industry and it’s “not enough,” he said.
To accelerate the growth of Latino owners, especially in the U.S., Hall said education is needed.
“We need to have programs that accelerate education … that education piece and showing folks what the opportunity is out there, not only for potential owners, but for the brands as well, as we can engage with one another and open up to that audience in conjunction with AHLA and other groups,” he said.
Starting the ownership process
Those who have never owned or franchised a hotel but want to get into the business must do their due diligence to get an understanding of the industry, said Jeff Stephenson, VP of U.S. franchise development at G6 Hospitality.
“The art of hotel ownership is exciting; it’s never the same every day,” he said. “You get to deal with people, you get to deal with employees, and it’s an everchanging landscape as the last seven or eight months have certainly taught us.
“Due diligence is the art that will make you successful or not so much when it’s time to look at owning a hotel, franchising a hotel if you have an independent and which franchise to choose.”
How much outside help is needed, including consultants and other owners, depends on the amount of experience new owners and franchisees have, he said.
No financing is available now for long-time owners or first-time owners, which is why it is important for new owners and developers to surround themselves with a community of experts, said Jason Gregorek, VP of development and owner relations for Hyatt Place, Hyatt House and Caption by Hyatt at Hyatt Hotels Corporation.
“There’s a great willingness in our industry to share information, so surround yourself with a community of developers,” he said. “Developers who can build a community around them, I think the more likely they will be to build their first hotel.”
Walter Barela, principal at Peak Hospitality, said new owners can learn about the development and management processes by finding a mentor.
“The best way to fail at something is not to have adequate information on it,” he said.
Barela said “buying an existing property is always easiest to do” for first-time owners.
“Even if you’ve been in the hotel business a long time, trying to get a new-build loan is extremely hard,” he said.
In the COVID-19 environment, Barela said his company is lucky to be in the process of acquiring a couple of properties.
“We’re doing it through local banks, credit unions mostly, but we’re finding just 50% LTV right now. I guess I should be happy with that at this point,” he said.
He added that new owners have to start “with buying a hotel, working with the brand, having the opportunity to really brand up and … have a good story, a track record and (an idea of) what you’re going to do.”