Sage Hospitality is among the group of stylish, staunchly independent hotel owner-operators that continue to thrive and grow beyond their roots. Co-founded in Denver, Colorado, in 1984 by current President and CEO Walter Isenberg, Sage is nimble and opportunistic, currently with 76 hotels open (about half owned) and about another nine hotels in various stages of development.
However, Sage does not completely shun brands as it has some of the well-known American brands on its roster, including the recently renovated The Logan in Philadelphia, which is part of Hilton’s Curio Collection.
Sage, which has a separate restaurant development division, has among its projects two hotels under development in Denver – the 155-room Halcyon Hotel in Cherry Creek, opening next month, and the 172-room The Maven, which will be part of the Dairy Block development in Lower Downtown. Nearby, it is developing with a partner The Elizabeth Hotel in Fort Collins, Colorado, schedule for a late 2017 opening.
HOTELS recently interviewed Isenberg to talk about industry trends and his philosophy for running the Sage organization at a time when business is getting more complicated and moving faster all the time.
HOTELS: What gives you peace of mind about what you are doing at Sage?
Walter Isenberg: We’re continuing to do what we’ve done for 32 years, which is have great people on the team, try to stay focused on the basics of the business, which is really making sure that we take care of those customers that are coming into our businesses. Those things have been true for a long, long time and create a stable business model.
There’s not some silver bullet. And I think at the end of the day, what we’re focused on is differentiating our product and services, and they have to be sustainable and executable.… We’re working to create real great local experiences for people when they arrive, and the one thing you must do is re-think how you train people and what they’re focused on, which is making sure that that hospitality experience is great and that a guest can have a locally curated, really fantastic experience, regardless of the reason for their trip. And we continue to work on these things, but it takes a long, long time.
H: What do you see on the operations side that truly excites you?
WI: For almost 12 years we have been running a restaurant company, and inside our hotels we have locally focused restaurants. Through Sage Restaurant Group we have about a dozen of them open today with another half-dozen under development. At those restaurants we’re doing about 80% of our business from non-hotel guests, which is probably the exact opposite of most hotels because we’re also providing a differentiated local experience.
H: Why don’t more hotel companies succeed with F&B?
MI: I think the primary reason is that the banquet business tends to be easier to execute and more profitable, so that’s where people focus.
H: As independent groups grow in size and stature, we are starting to see more M&A activity surrounding these operators. What is Sage’s status?
WI: We’ll remain privately owned and independent. We’ve been doing that for 32 years and we think it will continue to be an advantage for us.
H: You have about a half-dozen hotels under development today. What is the biggest challenge in the process?
WI: On the development side, the most difficult thing today is construction costs. I think in some ways it’s more difficult than it was in ’06, ’07 when construction costs were very, very high. Today, costs are being driven up by the cost of subcontractors who tend to look about 90 days ahead. They’re very, very busy and there’s a price to pay if they say ‘yes.’ That’s what’s really happening.
H: How has your development and acquisition strategy evolved as of late?
WI: We’re looking for value-add opportunities, so by definition that means something’s got to be broken. It could be at properties that need capex or in need of rebranding. It could be a third-party management opportunity. So it just depends.
H: What has been your experience to date with soft brands?
WI: Really good. We did our first soft brand back in 2007, opened in 2008, which is Starwood Luxury Collection, The Nines in Portland. We think it’s a great opportunity to be able to create effectively an independent hotel but have the power of the pipe of a Starwood, Marriott, Hilton, Hyatt. We like the formula a lot. We did our first Curio and we’re going to do more.
H: What’s coming after the opening of The Halcyon?
WI: We have an AC by Marriott in Minneapolis that will open in the fall. And then an AC in Portland might squeak into the end of the year, and then a lot more coming in ’17.
H: What keeps you motivated and moving forward?
WI: I love the experience economy. I love the fact that people are coming back to our cities. I love the fact that people are looking for unique and local experiences as opposed to this sea of sameness.
H: What advice do you have for hoteliers wrestling with the brand versus independent decision?
WI: My advice has been consistent for a long time, which is love what you do and love whom you do it with.