HOSPITALITY TRENDS

An ex-Holiday Inn Executive is Behind a $500 Million Plan to Jazz Up Troubled Hotels

Holiday Inn | April 23, 2021

Ken Hamlet, the former CEO of Holiday Inn, intends to use a $500 million war chest to acquire limited-service hotels (those without facilities such as a restaurant or spa) and reposition them as properties with a more upscale customer experience.

Consider it adding more of the Four Seasons experience to roadside hotels, as Hamlet put it.

He was CEO of Holiday Inn for nine years in the 1980s and early 1990s, and during that time the business was purchased by IHG and introduced or acquired brands such as Embassy Suites, Crowne Plaza, Hampton Inn, and Harrah's. Rather than starting his fund, Hamlet joined Olive Tree Hotels & Resorts, a hotel investment group where he now serves as CEO, to pursue deals.

“I began to think of maybe now is a very good time to take advantage of getting back into the hotel industry and purchasing distressed assets or buying assets that were well-located, well-branded, relatively well-managed, and that were being distressed and only needed additional capital to get them up to 2021 standards,” he said this week.

The only thing is that there is a litany of hotel investors drooling about hotel investment prospects that did not come true before the pandemic.

Investment firms such as CGI Merchant Group, in collaboration with New York Yankees baseball legend Alex Rodriguez, and Bainbridge DXS are also scouring the market for hotel acquisitions of hundreds of millions of dollars in the coming years. Dreamscape Cos., owner of the Rio All-Suite Hotel & Casino in Las Vegas, has more than $1 billion in cash to purchase hotels, including troubled business-transient and convention-focused properties.

Olive Tree's capital distinguishes itself by concentrating on limited-service hotels in a mix of the 75 major U.S. cities as well as some secondary and tertiary markets such as Las Cruces, New Mexico. As long as there is a nearby demand driver, such as a hospital, university, or office park, the company can seek a deal. The majority of buyers are looking for troubled hotels in metropolitan markets or resorts in drive-to and leisure destinations.

Olive Tree intends to upgrade its guest rooms with more innovative features, such as automated check-ins and co-working-inspired workspaces in public areas. But, in addition to the technology, Hamlet desires enhanced client support, such as staffers adding personal touches to the guest experience, such as a bottle of wine or glass of champagne delivered to a room or hors d'oeuvres and chocolate bars in the lobby.

The move is reminiscent of how Holiday Inn became a brand. Kemmons Wilson established the roadside motel business in the early 1950s after becoming dissatisfied with the choices offered on a road trip between Memphis, Tenn., and Washington, D.C.

He set out to fix it because there was no consistency or quality in the accommodation experience. Olive Tree intends to replicate the success of existing limited-service hotels that are underperforming.

Many of Olive Tree's acquisitions would be branded by major companies such as Marriott, Hilton, Hyatt, and IHG. However, the company is not opposed to maintaining property independence or even launching its brand.

It is unclear when any of those acquisition goals will become available. Olive Tree reportedly has one hotel under contract and another "in the works."

Due to a mix of bank forbearance on mortgages and several rounds of federal stimulus by offerings such as the Paycheck Protection Program of forgivable small business loans, there haven't been as many distressed hotel properties exchanged throughout the last year. The Olive Tree team does not anticipate having to wait much longer.

Spotlight

Spotlight

Related News

INDUSTRY OUTLOOK

United Becomes First U.S. Airline to Add Live Activities for iPhone

prnewswire | May 23, 2023

United today became the first U.S. airline to support Live Activities for iPhone, giving customers real-time access to their boarding pass, gate and seat number, and countdown clock to departure time on their Lock Screen or while unlocked in the Dynamic Island, all without opening the United app. United customers check their mobile boarding pass and flight status nearly 800,000 times each day, and this new feature makes it even easier and faster for United flyers to receive timely updates and find important flight details. "We're seeing soaring demand for travel this summer, and Live Activities puts all the flight information you need right at your fingertips, whether your iPhone is locked or you're doing something else like checking email, listening to music or texting friends," said Linda Jojo, Chief Customer Officer for United. "This new feature is another way United is leveraging technology to improve our customers' travel journey. It's going to save passengers a lot of time, and we think they're going to love it, especially during a busy travel season." Live Activities helps United customers with iPhones stay informed in real time, so they can see live flight updates, flight details and alerts right on the Lock Screen or in the Dynamic Island on iPhone 14 Pro and iPhone 14 Pro Max. With a quick glance at the iPhone screen, customers can: Get details like the flight number, on-time status, inbound aircraft status, estimated departure and arrival times, and more in the Live Activity on the Lock Screen or the Dynamic Island when expanded Open their boarding pass directly from the Live Activity to easily scan during security check-in or while boarding their flight See departure and arrival gates, pre- and in-flight countdowns, and baggage carousel information right in the Dynamic Island Support for Live Activities has started to roll out to United travelers and will be widely available by the end of May. To experience the new features, customers should verify that their iPhone is running iOS 16.1 or later and their United app is up to date. With up to three million users interacting with the app daily, United' mobile app is recognized for its accessibility options for the visually impaired, personalization options and improved navigation. The air carrier has consistently rolled out industry-leading app features in recent years, including: Agent on Demand: Only United has a virtual, on demand customer service tool that lets customers scan a QR code and video chat, text or call a customer service representative instead of waiting in line at the airport. Last year, 1.3 million customers used Agent on Demand, and in 2023, we've already seen 192,000 customers use the platform. United Map Search: Customers can easily compare and shop for flights based on departure city, budget and location type, with an interactive map feature. Available on the United app and website, this digital tool displays fares in a map view, allowing customers to simultaneously compare travel to a variety of destinations in a single search. Travel Ready Center: This one-stop digital assistant on united.com and the United app outlines any necessary travel requirements with clear guidance, helping customers prepare for their travel and breeze through the airport without stopping for manual document checks. Terminal Guide: Customers receive personalized day-of instructions to navigate point-to-point throughout the airport – from directing them to the most ideal airport entrance to finding their departure gate. About United At United, Good Leads The WaySM. With U.S. hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C., United operates the most comprehensive global route network among North American carriers, and is now the largest airline in the world as measured by available seat miles. For more about how to join the United team, please visit www.united.com/careers and more information about the company is at www.united.com. United Airlines Holdings, Inc., the parent company of United Airlines, Inc., is traded on the Nasdaq under the symbol "UAL".

Read More

DESTINATION AND TOURISM

CMIT Solutions Expands Its Network of Resources to Enhance Support for Hospitality Industry

prnewswire | April 19, 2023

Leading IT managed services provider (MSP) CMIT Solutions is growing its capacity to serve the hospitality industry with the assistance of HKW, a middle-market private equity firm focused on growth companies in the US and Canada. CMIT Solutions is one of only a few MSPs with hospitality-specific IT and cybersecurity expertise and solutions. HKW's support will help CMIT Solutions bring even more industry-aligned innovation to hoteliers through initiatives like increasing operational efficiencies and IT services fulfillment capabilities. "For many years, we have been the go-to IT and security services provider for more than 400 hotel operators in 41 states. Our reputation for exceptional service within this space is strong, and now we have the opportunity to build on these strengths to define the next level of IT and security support for this rapidly evolving industry," said Jason Arabian, CMIT Solutions Chief Strategy Officer and founder of the CMIT Solutions Central Rhode Island location that shaped the company's extensive hospitality service offerings. "We have an intimate knowledge of the industry that we've leveraged to create and fine tune a hospitality-specific IT and cybersecurity service bundle. HKW's investment enables our team to improve and scale our capabilities so we can deliver even bigger and better MSP solutions tailored to the hospitality industry." HKW's backing strengthens CMIT Solution's ability to assist a greater number of large hoteliers with expansive portfolios. Establishing a larger central team of IT and security professionals will provide clients with solutions for larger and more complex projects. According to American Hotel and Lodging Association, the demand for hotel lodging has increased 11.1% over the past 12 months. The continued growth of the hospitality industry increases its cyber risk profile driving the need for more sophisticated IT and cybersecurity products and solutions — this makes it the optimum time for HKW's support. CMIT Solutions offers a broad spectrum of technology services, from proactive computer monitoring and maintenance to cybersecurity solutions, with quick support when unexpected crises occur. Through locally-owned locations backed by an expansive network of nationwide resources and technology partners, CMIT Solutions has carved out its niche as an IT company that provides customers with unparalleled levels of one-to-one attention and advanced technology. As a result, the local business community now has a competitive advantage in today's increasingly challenging marketplace. About CMIT Solutions CMIT Solutions LLC (CMIT) is a leading Managed Services Provider (MSP) franchisor delivering information technology (IT) and cybersecurity solutions to businesses. Through a large network of enterprise-class technology resources, the company supports businesses anywhere in the United States and Canada, and its locally owned franchise model enables CMIT to serve customers through high-trust, direct relationships. CMIT offers a wide variety of services and products, including IT management and maintenance, cybersecurity monitoring, help desk support, data backup and recovery, and more. The organization has ranked in Entrepreneur magazine's Franchise 500 list for eight consecutive years and is designated as a World Class Franchise by the Franchise Research Institute.

Read More

TRAVEL TECHNOLOGY

Peachtree Hospitality Management Enters Third-Party Management Agreements with TEKMAK Development Company

businesswire | April 05, 2023

Peachtree Hospitality Management ("PHM") has entered into agreements with TEKMAK Development Company (“TEKMAK”), a full-service hospitality development company, to provide third-party management services for a portion of its hotel portfolio. PHM will assume operations of the SpringHill Suites Dallas Rockwall on Aug. 1, 2023, and is slated to manage two under-construction hotels, a dual-branded TownePlace Suites by Marriott and Fairfield by Marriott in Paris, Texas, and a TownePlace Suites by Marriott in Forney, Texas. "This is the second long-term management agreement we’ve entered into already in 2023, and we will continue to seek best-in-class partners like TEKMAK as we pursue our own third-party management growth goals," said Patrick Short, PHM's president. "Our third-party operated portfolio continues to expand, currently accounting for nearly a third of our entire managed portfolio, and we expect to continue growing our third-party portfolio moving forward, ultimately surpassing our owned hotels." A division of Peachtree Group, PHM operates premium-branded, limited-, select- and compact full-service hotels primarily in the upper-midscale and upscale segments. Today, the company manages 92 hotels across 28 brands with 11,186 rooms in 22 states. These three TEKMAK hotels increase PHM's third-party operations to 34 hotels. "I first became familiar with the Peachtree team when they acquired our Hilton Garden Inn hotel in 2021. I am impressed with all aspects of this company, particularly their management division," said Thomas Kirkland, CEO, TEKMAK. "It quickly became clear that their culture and resources meshed well with our own, making this relationship a perfect fit for both. We continue to be impressed by their enthusiasm for TEKMAK, and we look forward to future opportunities together." About Peachtree Hospitality Management Peachtree Hospitality Management, an affiliate of Peachtree Group, is a hotel management company that creates loyalty across all stakeholders – team members, guests and owners. PHM’s proprietary systems and processes maximize financial performance and value of every asset, deliver efficiencies and enable hotel teams to provide guests with an uncommon customer experience. PHM manages the performance of 92 hotels across 28 brands with 11,186 rooms located in 22 states. For more information, visit www.peachtreegroup.com.

Read More