DENVER—It has been an active third-into-fourth quarter at Stout Street Hospitality, located here, where, having just inked agreements to have half its proprietary Magnolia Hotels become a part of Marriott International’s Tribute Portfolio, another sea change is delivering fresh momentum to the owner/operator—this time at the C-suite level.
Founder and Chairma Steve Holtze recently promoted two long-term EVPs, his two children, Eric Holtze and Sarah Holtze Treadway, to co-CEOs to helm the company. Treadway also now serves as president while her father remains chairman of the board.
While not carved in stone, there was a basic family understanding the younger generation would “someday” find themselves in the company’s top executive posts, a role most recently filled by President/CEO Leigh Hitz, who stepped down after 27 years with the company.
Treadway joined Stout Street Hospitality (SSH) in 2007; her brother joined the following year.
“We each had a little bit of a different path,” said Treadway. “I graduated from college and knew I wanted to be in the hotel business and eventually come back and work with our father. When I graduated it was 2001; the hotel business was not great then. I moved to New York, then 9/11 hit. I eventually got a job with Four Seasons, was with them for a couple of years in their global sales office, then moved out to L.A. with them… I then was able to come back here and run our sales department. It was always part of my plan to come back.”
Similarly, Eric Holtze graduated in 2004 from the Hotel School at Cornell University with a master’s degree and began working with The Plasencia Group as a financial analyst for some four years.
“It was a lot of fun because it was during the last upcycle. The last year I was there was less fun because it was the beginning of the downcycle. And like Sarah, I always saw it as a stepping stone to coming back to the company, but I came back sort of at the beginning of the peak of the recession. It was a great time to come back and grow our company, just because there were so many opportunities to look for new hotels. That’s what we’ve done for the past eight years,” said Holtze. “So it ended up being perfect timing.”
“With the strategic changes we’re going through in the company, now seemed like a good time for us to step in to make sure we get where we want to go,” added Holtze.
“It’s often that you learn the person who brings you to one step at a company is not the one who’s going to bring you to the next step,” said Treadway. “It was the right time to kind of transition the leadership so we’re the ones taking the company into the next realm, making sure our vision is aligned with the company’s vision.”
Putting family in the family business is not unusual given the Holtzes’ backstory. Steve Holtze was a fourth-generation contractor before he formed Stevens Holtze Corp, which was dedicated to renovating historic buildings in city centers. The group’s initial project was the restoration and transformation of Denver’s First National Bank Building, built in 1911 at 17th and Stout Sts. It became the Magnolia Hotel Denver. In 1999, Holtze repurposed Dallas’ iconic Magnolia Hotel Dallas Downtown, subsequently changing the company’s name to Magnolia Hotels and branding the majority of its properties under the Magnolia name. In 2010, the company changed its name to Stout Street Hospitality (the street where its corporate headquarters is located) to reflect an expansion of its vision and services at the time.
The vision today, according to the new co-CEOs, is to reassess the portfolio.
SSH has Magnolia Hotels in Denver, Dallas (Downtown and Park Cities), Houston, Omaha and St. Louis, along with the Winter Park Mountain Lodge ski resort in Winter Park, CO.
The company owns five of the properties and operates all seven (it does not own the Park Cities hotel or the ski resort).
“All our hotels are beautiful, but we’ve got sort of a collection of three-and-a-half- and four-star hotels. We’re recycling all of our capital into bringing all of our hotels up to that Four-, Five-Diamond quality. That’s where Sarah and I see the future of our hotels.”
Toward this, SSH has partnered with Marriott’s soft brand, Tribute Portfolio.
“The soft brand concept is just perfect for our vision and our strategy,” said Holtze, noting the brand’s tagline—“Stay Independent”—will allow the Magnolia Hotels to do just that.
“It’s so competitive in the marketing world these days, that teaming up with Starwood, now Marriott, helps us reach all of our customers. At the same time, we get to keep our personality and run the hotels the way we think they should be run.”
Once the historic Mayfair Hotel, the property reopened as the 182-room Magnolia Hotel St. Louis in 2013 after a multimillion-dollar renovation. On the National Register of Historic Places, the hotel is to segue to the Tribute Portfolio in January.
The 314-room Magnolia Hotel Houston, the former Post-Dispatch building, also will convert in January.
The 297-room Magnolia Hotel Denver will join the Tribute Portfolio in October 2017, following an upgrading of its lobby and restaurant concept, to follow up the hotel’s recent multimillion-dollar renovation that featured the creation of 51 new premier guestrooms and a Presidential Suite.
“In our urban locations, the individual business traveler is so important to us; they’ve been our loyal customers for 20 years. The partnership with Tribute Portfolio helps us still give our customers the personalized service they’ve grown accustomed to and they get the support (for example, a loyalty program) only a larger format like Marriott can provide,” said Treadway.
“We really think this is the way the industry is moving,” suggested Holtze. He acknowledged soft branding is not the solution for all SSH’s hotels when asked if the remaining Magnolias would transition over to Tribute, adding the brand also takes market and location under consideration when choosing partner properties.
As long-term holders, Holtze expects the company will continue to focus on urban core properties, but sees an expanded field that will allow SSH to consider branded hotels, not just independents, for its portfolio. The Magnolia brand will remain a staple, as it may be inserted into most markets.
Holtze said SSH would still manage the properties.
Asked if there are challenges and advantages to leading a private, family-owned business, Treadway noted a distinct positive: “Eric and I really enjoy what we do and love working together. We actually even carpool to work every day. We’re close siblings.”
Holtze noted there’s a lot of crossover between the siblings’ roles because of the familial nature of the business. “We both jump in wherever we’re needed, he said, adding, “I don’t know if this is an advantage or a disadvantage, but when you work in a family business like this, it’s pretty much 24/7. We talk about it while carpooling, we talk about it at Thanksgiving dinner, on the weekends when you’re with your kids. It never stops.”
Both recall time spent “in the biz” growing up. “Sarah and I have worked in the hotels since we were minors,” said Holtze, recalling how as a teenager, he drove the airport shuttle at one of the company’s suburban hotels (that it no longer operates) “I spent my 21st birthday working a late shift at the front desk at the Denver hotel,” he said.
“When we bought the Denver hotel, it was under construction and I spent the summer doing housekeeping construction with all the ladies,” added Treadway.
After working outside the family business, each had different experiences to bring back, something Treadway indicated her father encouraged.
“His attitude was: ‘If you’re going to come back and work for the company, you have to have earned it. You have to have successes outside the business in the industry, and have advanced degrees. It’s too important. We have too many employees whose lives we have to take care of to give the business to undeserving, unqualified children,’” laughed Treadway.
“After we came back, it was just sort of a natural process,” said Holtze. “There was no set timetable; just when it felt right.”
Like now. HB