Hotel Business - Driftwood Hospitality Management

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Driftwood
diversifies its
hotel portfolio
BYNICOLECARUNO ~ ‘
NORTH PALM BEACH, ‘FL—
‘With more than 35 hotels rangifig
~rom large, full-service, upperupscale’
hOtels, to smaller, ilmited
ser~riceproperties, Driftwood~Hos
pitality ,Ma,riagement, LLC, rhi~s’•
‘the gamutof, th’e hospitality indus
tfy. But with the ‘recent acquisition
of the Sheraton ‘North Houston
‘at George Bush Intercontinental,
a 420-room property, D’riftwood
continues its trend of growth.in
~the large, upscale hotelsectot.
But the ~oinpai’fy’sIEVWCarlos Ro
driguez; said Driftiv~3’b~d is’nt neces
sarilyfocusing oh just that one sec
tor. “Yes, we’ve been growing a lot
~on the large, full-service side,” he
acknowledged, “and we’re known
• f6r those. But we have several ex
tendeds’tays’,- we have .Staybridges,
we have H3Yatt’ HOuses.and we, have
‘select-service like ‘Courtyards.” As
it turns out, the company, ‘which’
has an “opportunistic” approach
to its portfolio, has just happened
to find a lot of opportunities in the
large, full-service sector. “We~doñ~t
have a specific region of the cohn
,try that we want to be in; we don’t
- - continued on page 76

HOTEL BUSINESS® News
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Driftwood third-party manages the Tan-Tar-A Resort
and owns the Sheraton North Houston (right).
Driftwood Hospitality
continued from page 8 -
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.~‘-~“ ~
have a specific type of hotel that we want to run. We analyze the
-ppportunity,see which markets are underserved, which brands ~
are not present in the market and that’s what we go with. ~ “~
“We are turnaround specialists. That’s iealll what wefpcus - - ‘~ - . _~Z~
on. In the old days, the gu~is atLehrnan Brother~ used t~ ball .‘ ‘~ -
us their Geppettos. We fixed their broken td~’s,” he contin
. ued. And, according to the EVP, Driftwood likes all kinds of •• .~ .. .‘ -
toys.. “To be successful, you need to enjoy what you do, and we ,‘ had bad policies or marketing, but the property has a good
-. live and breathe~ it.”. ~ reputation. In that case, you can turn it around a lot quicker~”
“. Rodriguez is excited about the possibilities of properties like Overall, Driftwood has a five-year plan ~h’eri determining if’
the Sheraton,North Houston. “Location, location, location,” it should get involved with a hotel. “Thät’sour ünderwritin”g
- he~emai~kedwhën asked.why this property was so special. The criteria.” Andon •the whole, this form~i1a has been woi~kirig.
• hotel, which’is less than a mile from the George Bush Intercon- “The portfolio has been improving drastically,” Rodriguez.
tinental-airport and less than 30 minutes from the headquar- confided. “We’re in the middle of our budgeting season ànd~
ters of several international corporations boasts more than all of the GMs that I ye met with when we look at their bud
30,000 sq ft of meeting space making it per gets, they re all very bullish
fect for business travelers Likewise it s situated While the company has been acquiring many
near the Houston Race Park SplashTown Water
hotels lately it s still very interested in third party
Park and several golf courses meaning it can be
management contracts, as evidenced by agree
- maximized for leisure tràvelers as welL “Thisjsa - ments to run the750-rOom Tan-Tar-A Resor-t’in
hotel that was a little run down It needed some
Osage Beach, MO and the 500 room Crowne
tender ~loving care ‘We re implementing some r~ Plaza Colorado Springs According to Rodriguez
heavy duty renovations to it The meeting space is
Driftwood is at least part owner of 60% of its
tired The rooms are tired We re coming in and
portfolio and the other 40% is third party When
- doing ascomplete renovation but the bones 1are asked if the company is leaning more toward own
there We re buying the hotel [with joint venture ership he responded Ifwe can buy and invest in
partner Apollo] for what we consider a very cheap something, we 11 always get excited because what
price by our underwriting criteria so that allows Carlos Rodriguez we re all about is creating value If we have an op
us to spend money fixing it. Itallows us ‘to do what Driftwood Hospitality. . porainity toiñvest in a property’ and create value
we need-todo to get it going again.”. •~ . . ~. - Mana~ement~ LL~. ~ for ourselves,~great. But .welike this balance that -
While another of Driftwood s recent acquisitions—The we have going It exposes us to the markets and it provides a
400-room SheratohColumbus Hotel at Capitol Square—also steady cash flow for us.” He noted that Driftwood used -tóbe
requires a large renovation (in this case, $9 5 million the 100% ownership but we had to reinvent ourselves four years
largest renovation in the company’s history), R6driguez says. -:ago when Lehman went bankrupt, andpart of the reinvçntion -‘
that their turnaround doesn t always necessarily require deep was seeking third party management It s been a success
pockets It varies from hotel to hotel he explained saying The company also reinvented itself when it abandoned new
that common problems are the following People not watch build projects Wejust haven t done it in the last couple ofyears
ing the bottom line not doing a goodjob on marketing or ac because of the recession Now its cheaper to buy an existing
cessing all the different channels that are there for the taking property than to build it But Rodriguez noted that new-builds
running down the properties and last but not least is overlev could absolutely be in Driftwood s future As soon as it starts
eraging Depending on the problems with the specific hotel, making economic sense to build and we find a market where
Driftwood can make progress in anywhere from a few months there s a good opportunity we 11 go ahead and build
to five years If you have a property that has a really bad repu Rodriguez believes that along with the company s experience
tation and you re battling that, it might take a little longer If its this flexibility and ability to ~lapt that is the key to Drift
you have a property that the hotel guests will not recommend wood s success We re very entrepreneurial We are very flexyou
re in trouble If you let the property run down you 11 have ible ~hen dealing with investors and owners We re very open
issues In other cases it s just poorly managed Maybe they access and ~e re hungry for opportunities l~1J
St1
Ameiicän Hotel
NEYP and CO
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Hilton Names B
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TRINIDAD—Hilton
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• Directàr of Sale
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