ST. LOUIS—While King Midas might have found his golden touch a double-edged sword, with everything from roses to food to—according to some legends—even his own daughter turning to gold at his touch, locally based Midas Hospitality LLC has its own golden rule when it comes to crafting success: to create a culture and environment that will encourage and promote positive associate morale, enhance guest satisfaction and drive desired profitability in all of its hotel assets.
“Our company prides itself on culture,” said Kurt Furlong, principal and EVP, sales & marketing. “We don’t call it the corporate office, we call it Midas central support. That type of communication is important, that we’re a family here to support you versus a corporate office mentality. Culture is very important to us.”
Founded in 2006, the existing four principals of the company came together in May 2010. Since then, Midas has built up a portfolio of select-service and extended-stay assets, primarily from the Marriott, Hilton and IHG brands. “We’re up to 33 hotels currently open with another dozen in the pipeline that we’re building,” Furlong said, noting that Midas Hospitality has a sister company, MC Hotel Construction, so it can take charge of its own developments.
Properties in the pipeline include the Home2 Suites by Hilton and the Hampton Inn by Hilton in Brooklyn Park, MN, both opening summer 2018; the Residence Inn/Fairfield Inn & Suites St. Louis – Westport, opening this fall; the Residence Inn/Courtyard by Marriott St. Louis West, opening fall 2018; the Hampton Inn by Hilton Sikeston, opening in Sikeston, MO, in spring 2018; the Residence Inn/Courtyard by Marriott Charlotte North, opening spring 2018, and the Residence Inn Charlotte West, opening summer 2018, both in Charlotte, NC; and the Legacy Suites Greenville in Greenville, SC, opening spring 2018.
Furlong acknowledged that—much like the companies included in the cover story on page 74—quite a few of the company’s upcoming developments are dual-branded projects, owing to the efficiencies—both in terms of construction and operations—of the model. “We’re doing a lot of dual-branded hotels—one box with two brands. We just opened up a Residence Inn and Fairfield combo hotel at the Charlotte [Douglas International] Airport,” he said. “There’s a lot of efficiencies from a construction standpoint—you’re sharing the pool area, the fitness center, a lot of that common area is shared, so you don’t have to build two of those. But even from a selling standpoint, when you have a Residence Inn and a Fairfield, for example, with two different customers, the extended-stay customer and the transient customer, you’re able to dual sell a hotel very easily based on the travelers needs.”
With properties primarily from the IHG, Hilton and Marriott brands, Furlong said that Marriott International Inc.’s acquisition of Starwood Hotels & Resorts Worldwide Inc. broadened possibilities for the company. “Most markets are saturated pretty much with all of the staple Hilton and Marriott brands,” he said. “Historically, would we have considered doing an Element with Starwood? Probably not from a ground-up standpoint, but now that they’re with Marriott, we are. We’re building one here in St. Louis, probably to open in 2019 or 2020. Because of that acquisition of Starwood to Marriott, that opened up that brand for us as it would Aloft. We have one of those planned as well.”
While primarily an owner/operator, Midas Hospitality does third-party manage if it’s the right partnership. “I don’t know if there’s a perfect balance [between ownership and third-party], we can manage any size or type of hotel, but what’s important to us is the relationship with that ownership or investment group,” Furlong said. “We need a collective partnership, similar goals, culture in order for us to third-party manage it for them. We interview them, they interview us and if we feel it’s a good fit and there’s future growth together, then we consider the third-party management.”
In addition to new-build construction, the company also acquires assets as well. Furlong elaborated on factors that affect whether the company is interested in a property for acquisition. “Obviously, the market conditions from a supply-demand standpoint play a major factor. We take a look at each of those markets based on that select-service brand and see if it’s undersupplied or oversupplied, and what’s already slated to come into that market,” he said. “We like younger assets, no more than 10 years old, that don’t require too much of a PIP to be executed upon change of ownership. Our most recent acquisitions both were Staybridge Suites—one down in Houston, and that was a brand-new asset that just opened in February 2017, and then we bought a Staybridge Suites in Independence, MO. That’s a 10-year-old market. So it varies based on market, flags available and condition of that asset.”
The Houston property marked the company’s foray into the Lone Star state—and Furlong doesn’t anticipate it being the last. “We like certain pockets of the Texas corridor, so we continue to look down there,” he said, noting that Midas’ development pipeline is primarily in St. Louis and the Carolinas due to the company’s connection with certain investment groups. “From an acquisition standpoint, I don’t see us—not that we’re opposed to it—going too far west. Most of it is going to be Midwest and Southeast just based on relationships that have filled our plates pretty well. But we have one hotel in Texas and I anticipate us finding more opportunities down there.”
Looking to the future, Furlong said there’s no magic number of assets that Midas Hospitality would like to have in its portfolio. “We don’t have a set number of hotels we want to get to. We want to grow smart, strategically,” he said. “We envision that by the end of 2018 we’ll probably be at 50 hotels. That’s not necessarily a goal; that’s just the trajectory that we’re on. We end up acquiring two to three hotels a year, and doing that math, we think we’ll be close to 50 hotels by the end of 2018.” HB