MARINA DEL REY, California—Operating an independent hotel requires a mindset that blends fun, hard work and some intense left-brain action. Matt Marquis should know—his company, Pacifica Hotels, owns and manages 21 of them.
“It’s a lot of fun,” Marquis said while nibbling on hummus, chicken wings and specialty meatballs created by Mark Gold, executive chef at Salt, the on-site restaurant at the recently re-opened, renovated and trendy Marina del Rey Hotel. “I enjoy being in a family company and in the independent boutique business. There’s a lot of opportunity for creativity. There are a lot of challenges and a lot of opportunity for success.”
Marquis assumed the role of CEO in May while his father, Pacifica’s founder Dale Marquis, remained as chairman.
What’s in store for him, the Marquis family and the rest of the Pacifica team? “We look forward to providing amazing experiences for people,” Marquis said.
Marquis said that while location is a big help for an independent boutique hotel, there are ways to be successful in small towns that aren’t blessed with surf-and-sand views.
“These are places where people go and want to have a cool experience,” he said. “Anyone can do it with a lot of hard work and effort. It’s about finding the right shell, building the right type of asset and working hard to get the right approach to your guests.”
One of Pacifica’s advantages is that it has in-house development and design departments, Marquis said.
“It allows us to have a firm hand on projects and have people we really trust to control the design a lot more,” he said. “Design is very subjective, but we understand what works from an operational standpoint and how it works with design. That’s an important relationship to have for any hotel, let alone an independent, boutique hotel.”
Pacifica’s portfolio contains 27 hotels comprising 2,577 rooms, and 21 of those hotels are independents.
The advantage of being independent is clear to Marquis: “We’re able to steer the ship the way we want to go, the way we see the market going and the way we see the industry going.”
But the key to success for any independent hotelier boils down to having a plan for success, Marquis said. Pacifica’s plan includes at least five key elements.
Be unique
“It is a unique asset; it’s not like any other hotel, so make sure to emphasize that,” Marquis said. “People fall in love with certain aspects of the hotel, so there’s a lot more flexibility to operate the property and be able to do special touches.
Trumpet the perceived value
Marquis said a guest’s perceived value is what will bring him or her back for another visit. Independent hoteliers must be able to provide an experience that enhances the perceived value—often through unique amenities and great service.
“Provide an exceptional room and experience and do it in a way where there’s an efficiency of costs,” Marquis said. “The perceived value can exist in the room, the lobby and common area experiences.”
Not all independent hotels are part of a larger collection such as Pacifica—and therefore might not have the same purchasing power—but don’t underestimate the value of having some standardization of linens, towels and amenity packages to keep costs under control.
“We watch our efficiencies but that doesn’t affect our guest experiences,” Marquis said.
Target market
Independent hoteliers shouldn’t be shy about reaching out to people consider their target guests. Making a website as inclusive as possible is essential—between 35% and 40% of Pacifica’s reservations comes through its own website, Marquis said.
Staff correctly
There shouldn’t be any pre-conceived notion about staffing—staff how you think you need to, Marquis said. If you need a little extra staffing to facilitate the perceived value, then it should be a no-brainer. However, don’t overdo it. Assess the return on the investment because after all, it is a bottom-line business.
Train your staff
Safety, how to properly engage guests and simply having employees be proud of where they work are important aspects of a training program. Alie Gaffan, director of training & development for the company, is a 20-year Pacifica employee and has cultivated the employee culture. That type of longevity and consistency is a fruitful combination, Marquis said.
“It’s all about the things that make the experience memorable—smile, interact, correct mistakes,” he said. “Training staff members to know it’s OK to admit the hotel made a mistake is important as long as you are willing to correct the mistake. That’s a culture that takes time to build.”
Those five core beliefs have helped the company establish itself as a growth-oriented company, according to the CEO. Recent executive appointments include Todd Moreau as chief operating officer, Adam Marquis as executive VP and Daniel Hyde as VP of design, development and construction.
Pacifica has surpassed a number of milestones during the past 12 months, including:
- Since early 2014, Pacifica has reinvested $50 million in property renovations in Marina del Rey, California; Redondo Beach, California; Pismo Beach, California; and Cambria, California. The Hotel Hermosa in Hermosa Beach, California, is next in line for renovation after being acquired last year, Marquis said.
- The corporate collection of hotels reached $1 billion in assets.
- Experienced 20% year-over-year growth and added more than 250 employees in 2014.
The company has two ground-up developments under way: a hotel in Santa Barbara, California, that will have 100 to 120 rooms; and one in Pismo Beach that will have 70 to 90 rooms.
The project in Santa Barbara is about 2.5 blocks from the beach and will have a 4,000 to 5,000 square foot entertainment/sunning deck. Pacifica is exploring the idea of adding a handful of Airstream campers on the bluff overlooking the ocean, Marquis said.
Pacifica remains in growth mode
Meanwhile, Pacifica is intent on turning its hostel concept into a brand. The Wayfarer is a 31-room hostel concept located in Santa Barbara’s “Funk Zone.”
“The Wayfarer is kind of our brand,” Marquis said. “It’s like a boutique hotel and a hostel had a baby, and it’s a good-looking baby.”
Marquis has his sight set on other locations—perhaps as many as 10 more.
“Growing on the West Coast would be easiest and safest for us, but we’re also looking at Austin, Nashville, Seattle, Chicago and other areas,” Marquis said.
The brand will do well in college towns, he added.
“We don’t want to do a lot of bad Wayfarers just to do them,” Marquis said. “We do have some good opportunities that we’re chasing.”
The hostel features a communal table and a gourmet communal kitchen. At approximately 150 square feet, the Wayfarer’s rooms are efficient, Marquis said.
“You have efficiencies with the bunks, although there are a few more housekeeping costs,” he said.
The company’s other 2015 initiatives include growing its third-party management business.
Marquis would like to see the company’s portfolio grow to 60 properties during the next three or four years. Pacifica hired former Broughton Hotels executive Stephen Medel as its VP of business development to spearhead the growth.
“We really want to continue to build a first-class portfolio for our investors—that’s our core business,” Marquis said.
The company has joint ventures with Investcorp and Rockpoint Group—something it would like to build on, Marquis said.
“We never really sought out third-party management contracts, but institutional money wants to do bigger deals with us,” he said.