PHOENIX — Meyer Jabara Hotels President Justin Jabara believes his company has come out of the depths of the COVID-19 pandemic as a well-oiled machine, and he hopes it is well-poised for a significant growth period.
Speaking with Hotel News Now at the 2022 Lodging Conference, Jabara said the pandemic gave his company the chance to refocus on fundamentals and empower property-level leadership.
"Through a lot of hard work and some luck, we positioned the company quite well coming into COVID," he said. "We were able to grow the organization during those tough times, but also position ourselves with some great investment in technology, some infrastructure and a couple spectacular additions to the team."
He said the growth prospects for Meyer Jabara Hotels are broad-based, including "everything from ground-up" development to acquisitions, where his company currently has a few deals near closing.
"We closed on a couple of boutiques over the last 12 months," he said. "Really nice assets, although our core business is more upscale select service."
Jabara said his company's preference is always to focus on acquisition — or additions to their third-party management platform — over ground-up development, but the transactions market is difficult right now. That's not enough to completely stop deals, though.
"We are seeing trickles come through, and we have to find a way to be really creative on deals," he said. "That typical 'I'll buy this and renovate it' [strategy] doesn't work, so it has to be adding another use [to the asset]. I've gotta get creative while being diligent to our core principals."
He said the lack of financing, and the increasing cost as interest rates rise, make the market even more difficult.
"It's very fluid," he said. "It's not easy. It's no longer just take an eight [capitalization rate], put a [property improvement plan] on it and go buy it. There's more to it. But some things haven't changed, and banking relationships will prevail. We've found that local banking relationships — depending on the size of the deal — have been very competitive."
On the management side of the business, Jabara said labor continues to be the biggest issue, which he said Meyer Jabara Hotels is trying to counteract by empowering local leadership teams by making the general managers effectively "the CEOs of their own business."
"We're asking them, as that CEO, what do they need?" he said. "They're telling us they need help with staffing — more so on the line level. In some markets, there's just nobody."
Meyer Jabara is investing on a corporate level by bringing in a new talent acquisition manager, which is a first for the company.
While mergers and acquisitions have been a continued trend in the hotel operations space, Jabara said he would be open to acquiring another company, but not selling. He said it's not something executives feel pressured to do either way.
"We've been around for 45 years; we're privately held, and there's no desire to sell," Jabara said. "Our focus every day, and what gets me out of bed, is how do we become the best hotel company. A big part of being the best hotel company in today's world and to stay competitive [is] you need to have scale. So we're actively looking for opportunities to scale the platform."