Can I buy a vowel?: THG celebrates its 40th anniversary

Edmonds, WA-based owner/operator/developer The Hotel Group (THG), an affiliate of Hotel Equities (HE), wears its values—which are based on the vowels of the alphabet—on its sleeves.

“We call them the AEIOUs,” said Doug Dreher, the company’s CEO. “The A stands for ‘and then some’—do more than it takes. The E is ‘ego-free’—it’s not about me, it’s about THG and HE. The I stands for ‘inspire hospitality greatness.’ The O is we’re ‘open for business,’ and we’re open for new ideas and diverse thinking. And the U is we’re ‘unbroken.’”

Those values have guided THG over four decades as the company is celebrating its 40th anniversary this year, a testament to its people and the company’s “indefatigable spirit,” as Dreher put it.

“I think a lot of it is endurance,” he said of THG’s journey. “It’s definitely more of a marathon than a sprint where you go through some up cycles and down cycles. It’s a challenging industry. One thing we always talk about is THG ‘ain’t for wimps,’ and that sprint has carried us through.”

The company was founded in 1984 by current chairman Edmond Lee, a CPA who was working for a Texas-based development company as CFO.

“He landed a deal because he didn’t want to move to Texas from Seattle,” Dreher noted. “So he was awarded the management contracts of three Executel hotels in Oklahoma and Texas.”

Dreher joined the company a couple years later as a general manager then quickly became a regional manager.

“My first opening was at Hampton Inn, but it was sold to Marriott, and it became the first Fairfield Inn,” he recalled. “We’ve opened 55 hotels overall, and that’s a pretty good number for a company of our size. Then, we grew as a management company over the years.”

THG’s first Opportunity Fund launched in 2002, allowing the company to purchase more hotels. “We were elevating the size of the properties that we were buying, and they predominantly were full-service hotels,” said the CEO.

There are currently 21 opened or pipeline hotels in the THG portfolio, with most of them located in the company’s home state of Washington. There are also two properties in Kansas City, MO, including the Crowne Plaza Kansas City Downtown, which, according to Dreher, is the largest hotel by room count (385) in the overall HE portfolio, as well as one property each in Tennessee and Montana.

THG became strategic partners with HE in July 2021. After having discussions with several other companies, it was HE that turned out to be the ideal partner.

“​​It became a natural fit because the structure’s different as the other structures that we were looking at were more about buying us and reducing our corporate team,” said Dreher. “Hotel Equities was on the up and up and growing. It became a win-win where a number of our corporate team members got promoted.”

He added, “Myself and Randy Meyer, our CFO, still remain actively engaged with the day-to-day business, but our team members are part of the collaborative team at HE. Our partners, investors and owners of the hotels that we manage have confidence in the team, so that doesn’t change. What does change is we’ll get scale on purchasing and some new business intelligence tools that we didn’t have before. We also have depth and resources in areas like food and beverage and more of an above-property team than we had before.”

—Adam Perkowsky

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