PORTLAND, ME—Over the course of nearly 50 years, The Olympia Companies, in some way or another, has always had a spot at the table, moving from an owner/manager centered around New England clientele to a real estate organization with aspirations to move out West in the hopes of expanding across country. Olympia Hotel Management, its management division, has been on the forefront of this cause.
“The quality of our people and their commitment to excellence to all aspects of hospitality is what sets us apart,” said Kevin Mahaney, Olympia’s president and CEO. “We are very open in our structure and encourage the free flow of ideas, along with the responsibility that goes with that freedom.”
Now divided into three business units—development, hotel management and equity investors—The Olympia Companies, originally founded as the Erin Company by Larry Mahaney in 1969, is a real estate organization devoted to exploring and developing assets and management prospects in the hospitality sector. Kevin Mahaney, who’s been in his current role since 1988, took control of the company from his father in 1995.
“[He] started to transform the company as a real estate development and management company, putting his own equity and other investors’ equity to work in real estate development projects, with a specialty in hotels—clearly because that’s where our experience lies,” explained hospitality veteran John Schultzel, VP of hotel management at The Olympia Companies.
In addition to developing and managing for itself over the past two decades, Olympia has also established a practice within the past eight years for doing the same for third parties, “using our existing expertise, experience and capacity,” Schultzel noted.
All three components contribute to the company’s success. The operating entity and the development entity share office space. “We have no walls,” he explained. “We’re completely integrated. When the development team is working on their work, they’re tapping into the resources on the operating side. When the operating side is helping a client with their work, we’re tapping into the resources of the development side.”
Olympia managed a total of 18 properties in 2016, an increase of nearly 13% from 2015. It third-party manages seven properties and has an ownership stake in 11. Its ideal room count for a property is between 100 and 200 rooms, but there are outliers in its portfolio. “I wouldn’t limit us to that, but we just find that’s where there’s operational efficiency and an opportunity to yield the hotel to maximize its value,” Schultzel said.
Having started off as an owner/manager has given The Olympia Companies an advantage over its competitors: “When we start talking to our clients about how we’re going to run the hotel, we come to it like it’s our own money, and we’re building the way we would build it as the owner,” said Schultzel. “Bringing that philosophy to all of our third-party work creates value for the owner.”
Looking at the map of where Olympia’s properties are, the connection to New England is evident. Back in 2001, the company’s sweet spot was primarily in the Northeast; however, since 2012, it expanded its footprint to Florida, North Carolina, Illinois and Ohio. “We aspire to be a leading company in North America, so we continue to look for opportunities west, to the Rockies and beyond, while we fill in all the opportunities between here and Florida, and throughout the Midwest,” he said.
With both branded and independent hotels in its portfolio, Olympia realizes its important to have a fair mix of both; it also acknowledges the differences in skill sets for succeeding in both markets. Additionally, the evolution of marketing has made it possible for independent hotels to compete with its franchise counterparts—and Olympia has been leveraging these tools. “We see, even right now, that the independent hotel growth is outpacing our franchise hotel growth,” Schultzel said. “There’s more opportunities in the marketplace for those properties, and there are fewer really great operators in the independent space who can do that as well as do the franchise.”
In addition to its independent and branded properties, Olympia’s portfolio includes hotels in college communities. It focuses on traditional franchise projects for large universities with medical centers. For smaller higher-educational institutions, Olympia shifts toward intimate, boutique-style inns developed to fit the culture of their respective communities.
“These institutions—which are basically run by really intelligent, thoughtful people—are selecting Olympia to be their hospitality partner, which we think lends a lot of credibility to how we perform and how we take their goals and translate that into the hotel, from both a product and service perspective,” he said.
In February 2017, Olympia added Colby College in Waterville, ME, to this growing portfolio. The real estate organization will develop and manage Colby’s new 42-room boutique hotel and restaurant. Groundbreaking is slated to commence this year.
While the majority of Olympia’s branded properties are affiliated with a range of hospitality groups, a notable giant is missing from the list. “I would say the big hole in our portfolio is with the Marriott franchise system, so we’re eager to jump into that,” Schultzel said, noting the lack of opportunity to work with the Bethesda, MD-based company. “In the markets we were developing, Marriott was already well represented, for instance.” He did acknowledge a current involvement in a couple of Marriott projects.
Olympia’s goals aren’t defined around increasing exponentially. “That’s not why people choose us,” he said. That being said, however, Olympia aspires to be somewhere around two to four new hotels per year. It would like to have the portfolio at 30 hotels by 2020 and 50 hotels by 2030. As far as meeting its objectives, the real estate organization is slightly ahead of schedule on the former. “Between new development and third parties, we’ll have four independent hotels that will come online in the next 12 to 18 months, and an additional three franchise hotels, so we do have a nice book of business coming up on both sides, franchise and independent,” he explained. “Those are markets like Illinois, Massachusetts and Connecticut, so it’s spread out.”
At the end of the day, Olympia’s framework is bound together by its employees who operate in accordance with five values: fun, concern for others, trust, accountability and continuous improvement. “If you make decisions behind a wall, then go out and tell people what to do, and they don’t understand how and why you came to that program, they feel disenfranchised and left out,” he said. “The transparency for us is about being accountable, being trusting and being open.” HB