Hotel Equities adds Greenwood Hospitality as strategic partner

If there ever was an example that in-person events are necessary in the hotel industry, it’s the story of how Greenwood Hospitality Group became Hotel Equities’ most recent strategic partner.

Brad Rahinsky, president/CEO, Hotel Equities (HE), told the story: “[We met up with] one of our current strategic partners, The Hotel Group, and their principal, Doug Dreher, at The Lodging Conference in September, and he said, ‘Hey, I want you to meet one of the principals at Greenwood Hospitality. We think there’s a real opportunity to have a similar conversation that you had with us.’”

The conversations moved on from there with Greenwood’s three principals—Tom Conran, Aik Hong Tan and Bill Kohl—and soon after, the company joined the HE family as its fifth strategic partner.

Bringing Greenwood into the fold enabled HE to do something that would have taken years to do in Rahinsky’s eyes—create an upper-upscale, full-service lifestyle experiential division.

“This partnership and their best-in-class performance in that space over the years really creates that opportunity for us in a way that would’ve just been impossible to do with this sort of speed,” he said.

Before the partnership was discussed, Conran noted, Greenwood had been fielding may calls from companies wanting to pursue an acquisition agreement.

“At every point in time, we would ask the question, ‘What would that mean to our current corporate-level staff, and what disruption may this provide to our ambassadors [aka team members]who work at our properties?’” he said. “Time and again, we heard about efficiencies, economies of scale, etc., which meant to us that there would be some significant disruption.”

What HE offered was a much better fit for his company. “We found people that had a culture that aligned very well with us,” Conran pointed out. “In fact, when we looked at it together, we said ‘This is very similar to our culture and what we represent.’ So, no disruption to our corporate level staff and no disruption to our ambassadors at the property level. It was just a win-win in all different manners.”

Kohl agreed that the similar company cultures make the partnership work. “They have what they call their value statements, and we have our mission statements and also what we call the Greenwood EFFECT, which is our culture statement,” he noted, with EFFECT being an acronym for Engaged, Fun, Flexible, Equipped and Empowered, Community and Trust. “If you align those, there’s five or six points that align directly. And given the difference in the style of properties that we have, this was kind of a ‘one plus one equals three’ equation.”

The chain scales and locations of Greenwood properties were other selling points for HE.

“When you start to take a look at how they are deployed across their portfolio in the lifestyle, soft-brand, luxury-tier space, that’s been aspirational for us, and while we’ve dabbled in that space historically, it would’ve taken us years to scale,” said Bryan DeCort, COO, HE. “We love where they operate, and we love the brands and the chain segments that they play within.”

Greenwood currently has 30 properties under management that are operating today, as well as four hotels under development and “a fairly robust pipeline,” noted Conran, adding, “Around 50% of our portfolio right now is either independent hotels or soft-branded curated hotels.”

He said that one hotel in New York has been the No. 1 hotel in the Marriott portolio from an “intent to recommend” standpoint over the last couple of years “and we have another Autograph Collection property in our portfolio that is vying to try to beat that hotel now.”

The company also takes pride in its collection of restaurants, of which Kohl is in charge. “We don’t have hotel restaurants; we just happen to have restaurants that are located in a hotel,” said Conran. “We believe the positioning of these very unique hotels are really driven by the experience in food and beverage.”

Adding the Greenwood hotels into the HE overall portfolio—HE-managed properties, as well as those of its partners—brings the total count to 242 hotels open and under construction. But, Rahinsky stressed that it’s not just the size of the portfolio that counts.

“We know that if we continue to focus on the getting better part, the getting bigger part will just happen organically because people, companies and owners will demand our services,” he said. “So, while we’re very proud of that number and the strategic growth that we’ve had over the past two years, we’re focused on the better, not the bigger.”

That’s not to say that HE won’t take on new properties as opportunities present themselves. “In addition to the focus on the strategic partnerships that we’ve had a lot of success doing over the last 18 months, our team has also equally focused in on our organic growth, which has always been a staple for us,” said DeCort. “We don’t want that message lost. We still add a tremendous amount of value in our competency. We’re exceptional owner-operators across our legacy and now shared portfolio.”

The transition, as with all of HE’s strategic partners, will be very collaborative, DeCort said, adding, “The real work really begins as we engage the senior leadership teams from both sides of the partnership and then start to communicate beyond that at the corporate level and down to the unit level. Also, [we will be]evaluating systems and platforms across both organizations to identify opportunities for efficiency to eliminate redundancy, to help create and accelerate scale and also to create opportunity for associates on both sides as we get bigger and more efficient together.”

So, where does this partnership go moving forward? Conran believes there are great days ahead for his side of the alliance.

“Geographically, I think our reach will increase through this alignment,” he said. “So I think we’re looking at different parts of the country that maybe we didn’t look at before. I think that from a capital standpoint, we can attract some significant levels of capital through this alliance, which is going to be helpful.”

Kohl thinks it is a great opportunity for Greenwood ambassadors, as well as HE associates, saying, “Some of their associates may be interested in getting into some larger, more complex hotels and as positions open, we would afford them that opportunity. And we may have some department heads who are interested in being general managers. We don’t have that opportunity within our company, but with the scale that they have, there may be some openings that they could apply for and grow their careers in that arena. I think that’s particularly possible given the outstanding management development programs that Hotel Equities has been able to develop.”

HE’s strategic partners have helped the company attract others interested in a partnership rather than an acquisition—case in point, Greenwood Hospitality Group—and Rahinsky expects that to continue.

“Our partners who we have created this alliance with are now speaking with their peers and colleagues who own hotels and own portfolios and own management companies, and the performance is getting out in front of us that people want to be a part of that,” he said. “So, these opportunities are starting to present themselves in an organic way without us marketing—and that’s how you know you’re doing it right.

“These have been partnerships for us from day one from the first one to this most recent one with Greenwood, and everything going forward will be partnerships,” he continued. “Others in our space are acquiring and they’ve used that vernacular to date. But, recently, we see where they starting to change that vernacular, and suddenly they’re doing strategic partnerships. We think that imitation is a sincerest form of flattery.”

Much like the other strategic partner executives in the HE family, Conran already has evidence that he and the other two Greenwood principals have made the right decision.

“We had an introductory Zoom call [recently]with all of our corporate staff,” he said. “One by one, they introduced themselves to the staff at Hotel Equities. Now that’s very uncommon. There are a lot of companies out there that talk about human capital and how much they care, and it sounds really good. But, what we found with Hotel Equities is a company that really stands behind that. Whether it’s Brad, Bryan or Coach [Fred Cerrone, HE founder/chairman], everyone is very approachable and willing to listen. We feel very good about this relationship moving forward.”