Chartwell Hospitality grows in higher-barrier-to-entry markets

FRANKLIN, TN—After 15 years in business, Chartwell Hospitality has changed and evolved quite a bit. Originally, the hotel acquisition, development and management company had a portfolio of five small hotels in tertiary markets. But now, with 37 hotels across 12 states, it’s got its eye on dual-branded and full-service hotels in higher-barrier-to-entry markets.

Noting that this has been the strategy for the past five years, COO Kevin Green said, “We did a lot of tertiary markets—and there’s nothing wrong with those markets; they’re great to be in—but the truth is a lot of people like doing those markets, so we’ve evolved into high-barrier-to-entry markets.” He added that the company will do deals in tertiary markets if it’s the right deal.

Green enumerated that there’s plenty in the company’s pipeline: a full-service Hilton and Residence Inn in the Green Hills/Nashville market; a full-service Hilton in Franklin; the company’s first Home2 Suites in Colorado Springs, CO; and SpringHill Suites Franklin, Hampton Inn & Suites Capital View (downtown Nashville), and a full-service Hilton in Alpharetta, GA, all of which will be breaking ground soon.

Kevin Green Chartwell Hospitality

Noting that many of the projects are in Nashville, Green said that it’s a market that makes sense for the company. (Chartwell owns or manages nine hotels in the city with five in the pipeline.) “Although there are a lot of hotels being built in Nashville, we feel very good about the locations and developments we are in,” he said.

And while the company has grown larger, it doesn’t necessarily have a magic number in terms of portfolio growth. “We are going to continue to grow through our internal owner/development as well as third-party management, “Green said. “Doing the right deals that work for us and any third party are more important than just doing deals to get to a certain number.”

Of course, regardless of the company’s size, some things remain the same. “While a lot of things have changed over the years—such as the markets and size of hotels—many things have stayed constant,” Green said. “We believe Hilton and Marriott are the best flags out there and, for the most part, have stayed with those brands. We have always believed in doing things the right way rather than the easy way. This is part of our mission statement that was developed by our team of general managers several years ago. Taking the easy way out too often comes back to shortchange you, and the people around you, in the long run. We like to do it right the first time and, if we don’t, we surely want to learn from it.”

It’s this transparency that Green says sets Chartwell apart from some of its competitors. “From an ownership perspective, you need to make sure you are completely transparent with your owners. Too often, we want to tell them all the positive things going on and steer away from what is going wrong. I like to do both and let them know our areas of improvement and things we are focused on,” he said.

“We used to own and manage everything,” Green continued, “so as we’ve taken on third-party management, and as we’ve sold hotels to different groups and continue to manage them, our biggest asset is that we manage these third-party hotels as if they were our own.”

One company that Chartwell has had a lasting partnership with is Capstone Development. In 2014, Chartwell sold Capstone two Hampton Inns, and followed that up in 2016 with five more Florida hotels. Recently, Chartwell took over management of 11 additional Capstone properties. “I think if you asked the ownership of Capstone, they would tell you that we run their hotels no differently than we do our own,” Green said. “They like the fact that we are honest and open with them and don’t give them the answers they always necessarily want to hear. You don’t earn someone’s trust overnight. I think having the opportunity to work with them throughout the years has given both of us a great sense of trust and understanding. We know what they are looking for and it is our responsibility to go out there and get it done.”

Green noted that the industry has had a good run for the past eight years, but as sales have increased, so have expenses. Going forward, he said, “A good hotel operator needs good systems. Often, good systems mean aligning yourself with good tools to keep your operating and sales expenses in line. Tools to help you keep labor in line, utilities, workers’ comp, benefits and general maintenance of your building are just a few that we use to keep cost down. We believe there is a benefit in working with professionals that can help our overall operations.”

The Green Hills/Nashville market is an area of focus for the company.

And those people are the crux of hospitality for Green. “As far as Chartwell goes, hiring the right people is key. We spend a lot of time getting those folks trained, and then you’ve got to take care of them,” he said, noting that the company looks for people who want to be on a winning team. “We don’t want to ever hire just warm bodies; if they want to be average, they won’t fit into our culture.

“We currently employ 1,500 people and will be close to 2,000 by the end of the year,” he continued. “As we grow this business, we need to be sure to keep our culture and not lose sight of who we are. Promoting from within is very important and hiring people that buy into our culture will continue to be our focus. We have great people in our company and without them taking care of our customer, we simply wouldn’t be where we are today.

“Likewise, we are very selective about whom we choose to be investors, owners and the many contractors we work with when we develop new hotels or management contracts,” he continued. “If we all don’t have the same goal and values, then it probably isn’t going to be the right fit.”

This will continue to be an area of emphasis for the management company. “How we organize the infrastructure of Chartwell and prepare for our growth is always a focus. We want to be set up for the future, and that often means hiring and training in advance so we are ‘locked and loaded’ when the time comes to take on new business,” Green said. “This has been very helpful as we took on 11 properties this year at one time.” HB


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