Monday, 13 June 2011 10:04
Burt Cabañas, chairman and CEO, and Greg Champion, COO, said during a break at last week’s New York University International Hospitality Industry Investment Conference that the measured growth plan will be realized during the next 10 years.
chairman and CEO
“The short-term goal is to make deals that make sense for us and for our owners,” Champion said. “Doing the right deals with the right people makes all the sense in the world when you are devising a growth plan.”
Cabañas said one way the company will achieve its growth initiatives is by working with existing clients.
“We manage a lot of single properties for single ownership groups, and we’ll look there first for other opportunities,” he said.
The Houston-based company is also finding new ways to grow.
“Eighty is the goal, but it is a moving target,” Cabañas said. “There are a number of different ways to grow, and when we started, acquiring a company wasn’t included in the thought process.”
Earlier this month, Benchmark added the management contracts of five luxury properties to its portfolio with the acquisition of Seattle-based MTM Luxury Lodging while simultaneously launching a new collection of hotels called the Personal Luxury Collection. The five hotels in the MTM portfolio gives Benchmark 13 properties for the Personal Luxury Collection and 27 hotels total in its portfolio.
Cabañas said after starting as a conference-center management company in the late 1980s, Benchmark began managing full-service hotels in the 1990s and began targeting luxury assets in the early 2000s. He said the target is hotels with between 70 and 150 rooms that need special attention.
“Our customer is the owner of that property,” Cabañas said. “Being able to offer owners of properties a new and better way to deliver a profit … that’s what this is all about. When anyone measures our success, they should measure our success by our ability to deliver to the owner.”
He said the acquisition of MTM allows Benchmark to add quality personnel to its management team because the entire MTM management team is joining Benchmark.
Champion said the beauty of the deal is the company didn’t have to create a whole new infrastructure to bring in the five MTM properties to form the Personal Luxury Collection. Cabañas said Benchmark previously spent US$2 million on technology improvements and that’s a big reason why the deal was able to get done.
A number of the Personal Luxury Collection properties will utilize soft brands to complement what Benchmark brings to the table, according to Champion.
“Being independent is an important foundation of the company,” Cabañas said. “Aligning with other organizations to best position the property for success is an important step to an asset’s success.”
He said a perfect example of that is the Turtle Bay Resort in Kahuku, O'ahu, Hawaii. The 443-room resort is also aligned with Preferred Hotels & Resorts.
“If that’s available and it makes sense to position the property through a soft brand, we have that capability and do it frequently,” Champion said.
He said one of the benefits of that approach is to maximize a property’s exposure without encumbering the owner with long-term franchising or licensing agreements.
Cabañas said that’s where the advancement in technology comes into play. He said because the Internet has leveled the playing field for independent hotels, having a traditional branded hotel isn’t as important as it once was.
Focus on employees
Tying the growth initiative together is Cabañas’ goal of providing as many opportunities as possible for the company’s employees. That’s what was so intriguing about the MTM deal, he said.
“Our ability to catapult this group of properties under one team was a big driver (of the deal),” he said. “The diversity of the properties is the key to growing our people in an entrepreneurial way.
“We have 700 managers and close to 5,000 employees,” Cabañas added. “We have a capable stable of people that can easily make the most out of opportunities created by our company’s growth.”
With properties still struggling to regain average daily rate lost during the recession—Cabañas said it will take to mid-2013 to regain the rate lost since 2007—in addition to the ongoing capital expenditures needed for hotels, employing the right people is more important than ever, he said.
“If you have a hotel that needs renovation and you have a guest made to feel like a king while he’s there, he’ll never have noticed a frayed carpet on the way out,” Cabañas said. “The way to tie everything together for a successful hotel is by hiring the right people.”
Read more on hotelnewsnow.com http://www.hotelnewsnow.com/articles.aspx/5735/Caba%C3%B1as-plans-to-leave-mark-in-luxury-hotels