The company added 22 hotels to its stable last year, with strong activity in the second half that saw an increase in its construction pipeline by a half-dozen hotels, two new management contracts, as well as a standalone spa.
Once open, the hotels will boost Marshall’s portfolio to 60 hotel contracts.
The properties, the bulk of which are in New York, include The Bernic, an independent boutique (96 rooms) in Manhattan; Microtel Inn & Suites (75 rooms) in Long Island City; Ascend Hotel (87 rooms) in Brooklyn; Best Western Brewster (57 rooms) in Brewster; and the Spa Castle Premier 57 in Manhattan; as well as Curio by Hilton West Chester (40 rooms) in Pennsylvania.
Third-party managed hotels include Heritage Hotel & Conference Center (163 rooms), Southbury, NY, and the Hampton Inn and Suites (150 rooms) in Yonkers, NY.
With such a variety of product in its portfolio, President/CEO Michael (Mike) Marshall indicated being plugged into opportunities is key but being realistic is critical.
“As a third-party operator, we have to be nimble in our approach to opportunities as they present themselves. We often turn down potential assignments based upon economic reasons rather than market-driven reasons. We can fix a lot of things, but if the ship already has too many holes in the hull, there isn’t a lot we can do. We have no desire to take on projects where we cannot add value to owners,” he said.
Having the ability to add value is one of the determining factors that makes a property attractive to the firm. “Our goals are our owner’s goals. They give us a property to manage, and it is up to us to figure out how to maximize the value of that particular property,” said the CEO, adding, “As opposed to shaping our portfolio to meet the needs of owners, we truly believe it is the owners’ choices of diverse properties that shape what we do. Our job as a management company is to stay on top of the changing trends of the industry in order to be able to serve the needs of our clients.”
Toward this, Marshall noted the top three things owners currently are requesting for their properties is for Marshall Hotels & Resorts to first and foremost drive top-line revenue, then drive bottom-line revenue and, finally, “keep them out of trouble.”
While many management companies do, the executive noted his company per se does not have any equity in any of the hotels it manages. “However,” said Marshall, “Many of our executives individually and personally have sliver equity in a handful of hotels. It always has been our philosophy to treat every hotel with equal importance without having the specter of Big Brother watching over a ‘more important’ asset.”
Historically, Marshall Hotels & Resorts operates three- and four-star branded hotels and resorts in urban and central business districts, suburban/drive-to and resort locations with numerous legacy hotel products from Marriott International, IHG, Hilton, Hyatt, Carlson, Choice Hotels International, Best Western Hotels & Resorts and Wyndham Hotel Group.
Asked if Marshall is looking to increase its management of more so-called soft brands or emerging brands, the CEO said, “We are always looking to steer our clients in the correct direction when it comes to brand or no brand, legacy or emerging. We often spend a vast amount of time conducting due diligence for properties to come up with the best recommendation. It is a collaborative effort with the ownership of the hotel.”
The company also takes on independents, such as the newly added The Bernic in New York City, and the newly renovated 19 Atlantic Hotel in Virginia Beach, VA, and Marshall indicated he’s comfortable adding such product to the portfolio.
“We feel that we have always been a strong operator of independent hotels,” he offered. “We always have taken the best practices of all of the different types of hotels we operate and forge the correct road map for success for our independents. We will never shy away from independent hotels.”
While the lodging cycle is anticipated to eventually turn down, the management company CEO suggested maintaining a high level of services is the best hedge against the future.
“We continue to maximize the most out of our managed properties regardless of any economic cycle,” he said. “We hope to anticipate and make the necessary adjustments to each property dependent on what that particular hotel market dictates.”
He added, “Although the industry as a whole has rebounded nicely over the last few years, a substantial number of hotels, whether performance- or market-related, have not fully optimized revenue and profit opportunities. As industry growth moderates, these owners seek stronger management companies with proven track records, providing companies like ours with exceptional growth opportunities during this phase of the hotel-industry cycle.”
In terms of possibly rethinking its portfolio, either segment-wise or brand-wise, as the cycle shifts, the executive said, “We move as the industry takes us. Lately, we seem to be taking on an increasing number of full-service assignments. As most of our executives came up through the F&B ranks, this aligns quite well with our company.”
Additionally, two Pennsylvania hotels the company opened—the Hampton Inn & Suites Ephrata and the Hampton Inn & Suites Mt. Joy—recently sold, resulting in strong returns for ownership, Marshall noted.
With the company now in its fourth decade, Marshall Hotels & Resorts’ CEO indicated he’s confident in the firm’s direction and taking on opportunities as they arise.
“We will continue to evolve as we have done since my father started the company in 1980,” said Marshall. “With our very diverse portfolio, we can spot trends as they emerge, as opposed to having to play catch-up or follow-the-leader. This allows us to make adjustments as needed in real time.” HB