A strong relationship and some happenstance worked together to put the Merrill Hotel, in Muscatine, Iowa, under Peachtree Group's management.
The 122-room, full-service hotel overlooking the Mississippi River joined Marriott International's Tribute Portfolio in 2019. Owners Jim and Rebecca Howe built the hotel in 2018 as a tribute to the city, said Caroline Royster, vice president of business development and hospitality management at Peachtree. The hotel takes its name from Jim Howe’s father, Stanley Merrill Howe, who helped built HON Industries, a local global leader in manufacturing office furniture and hearth products.
The Howes had a working relationship with Peachtree through one of its funds prior to the management agreement, Royster said. After a few years operating it themselves, they asked Peachtree for guidance on choosing an operator, not realizing that’s a service Peachtree offers. The company’s chief financial officer put the Howes in touch with Royster.
“We spent several months just kind of getting to know each other, and we gave them our pitch and we went up and saw the hotel and gave them our thoughts about what we might be able to do to improve things,” she said.
The Howes talked with several management companies but ultimately decided to go with Peachtree, which took over operations in mid-January.
Of the 91 hotels that Peachtree manages, only 28 are for third-party owners, Royster said. Among those 28 hotels, there are fewer than 10 owners.
“We don't typically do one-off hotels like this, but this was such a special hotel, a great relationship — an existing relationship — and just something we really wanted to get involved with,” she said.
The hotel has nearly 13,000 square feet of flexible meeting and event space. Its restaurant and bar, Maxwell's on the River, offers views of the Mississippi River.
Historically, Peachtree has focused on high-end, select-service hotels, but it has started to expand that focus within the past two years on the management side.
“We really do think that we can take the hotel to the next level,” she said. “Do some special events, improve their wedding business and take them from a 40% occupancy range well into the 50s.”
Since it was built in 2018, the Merrill Hotel doesn’t need a major renovation, Royster said. It’s coming up on a five-year cycle of needing some minor updates, but it has been a relatively low-occupancy property, so it’s still in good shape.
Peachtree and the owners are discussing some small capital projects that will have a return on investment, including improvements to guestroom showers and possibly reconfiguring some of the restaurant space, she said.
The owners had originally planned to add a spa to the hotel but later decided against it, so there’s some free space available, Royster said. The hotel hosts weddings, and while it has a bridal suite, there’s no place for the groom. The hotel is considering a cigar bar or Top Golf swing suite.
The hotel “doesn't need a ton of capital,” she said. “It's been very well-maintained, and they've certainly put the capital into it that they've needed to this point."
Read more news on Hotel News Now.