Concord Hospitality Enterprises Co.’s Grant Sabroff says the development, ownership and management company based in Raleigh, North Carolina, is coming off what could be considered its best year to date, ending 2017 with 95 hotels under management, 4,000-plus associates and portfolio revenues in excess of $US500 million.
In fact, for the past eight years, while significantly increasing its portfolio (current a mix of about 60% third-party managed across 25-plus ownership groups and 40% with various levels of ownership and managed) Concord and Sabroff boast positive year-over-year increases in RevPAR index.
Last year alone, Concord added 12 hotels, including the first Canopy by Hilton in the U.S at the new Wharf development in Washington, D.C. It also opened in Columbus, Ohio, the first dual-branded Marriott-Residence Inn, as well as its first AC by Marriott hotel in Raleigh, North Carolina (there are four more AC-branded hotels to come for Concord). At the same time, it is constructing its first hotel using modular construction, an AC hotel in Louisville, Kentucky.
And the beat goes on for this owner-operator which has spent the last three decades building relationships with investors on more than US$2.5 billion in premium-branded properties across the United States and Canada.
If that wasn’t enough, consulting firm Great Place to Work and Fortune have announced in 2017 Concord Hospitality as one of the country’s 100 Best Workplaces for Women in 2017. This marks the second consecutive year Concord has received this designation.
HOTELS recently spoke with Sabroff, who acquires third-party management contracts, negotiates partnerships, forms strategic alliances and forges industry relationships to support Concord’s growth, to find out what is next.
HOTELS: Is your blend of third-party managed hotels increasing?
Grant Sabroff: Over the last six years, there has been a continued increase in third-party management across our portfolio. With our pipeline and hotels that are expected to come online in 2018 and 2019, that mix may change just a little bit, but probably stay pretty close to about 60% third-party.
Our growth is really being driven by attractive new development projects, acquisitions and third-party management. When we’re developing we want to be the lead developer on many of those projects, but we will also co-invest and be a partner.
H: Do you expect the same aggressive deal flow going forward?
GS: Our 2018 pipeline is very strong. We’re going to open no less than 14 hotels… We remain optimistic that we’re going to be able to continue to find good development projects, to continue to grow the pipeline, working with our partners and working with our brand relationships, and continuing to do the things that have made us very successful.
At the same time, we will see an increase in the cost of financing, but even with that being said, we expect to be able to continue to develop thoughtfully. We’re balanced in our growth, so as we continue to develop, even if that pace does adjust we will continue to grow through acquiring properties, with partners, and we will continue to grow our third-party management business.
H: But will Concord remain as aggressive a developer?
GS: It will be aggressive in terms of growth, but not just for the sake of growing. It’s going to be growing with good projects. We are very active in the lifestyle and branded boutique space with the hotels that are coming online this year and that what’s expected next year. We’re going to have 11 lifestyles properties between AC, Autograph, Canopy and Hyatt Centric, and we are just starting in the space… At the same time, select-service will continue to be our bread and butter.
H: How is the art of the deal changing considering market conditions?
GS: For Concord, our track record and focus on human capital remains unwavering. We have a commitment to create the best culture. And with that comes never losing sight of doing what it takes to make our hotels profitable. We leverage all of our resources, competencies and technologies to give us an edge in a very competitive market place.
H: What is the hotel industry ignoring at its peril?
GS: I can’t say what the industry is ignoring. The opportunities that we’ve recognized: being able to work with our brand partners, investors and owners, and grow into the lifestyle in the boutique space. So that’s been an opportunity for us, which is going to continue.
H: From a performance standpoint, where are you finding the opportunities to move the needle?
GS: We have brought through our purchasing power low-cost insurance, worker’s compensation. Those costs are continuing to track down for us. We run very tight margins on the expense side, so it’s really been sort of a balance of continuing to drive the top line and be very focused on controlling expenses, but not at the sacrifice of quality and the guest experience within the hotel.
H: Give us a few examples of what makes Concord such a great place to work?
GS: We put a real emphasis on training, career growth and creating a fun environment that rewards successes for our associates. We also give back to the communities in which we operate, and we express the importance of life balance.
We speak culture every day and it enables us to hire the best individuals, grow those individuals and have those individuals become leaders within our company. It’s a people business and if you’ve got great people who love what they’re doing, they’re going to work endlessly to be successful, and that’s the culture we’ve created.