ATLANTA—For Rockbridge CEO Jim Merkel, adapting to change is a big part of strategy.
Hotels are “a consumer product at the end of the day, and so if you don’t expect change — if you’re not thinking ahead — then you’re behind,” he said. “That’s how we think of the hotel industry.”
The Columbus, Ohio-based private investment firm notched record months in January and February 2020 before the COVID-19 pandemic hit, prompting the company to put its long-term strategy into play.
“It was rewarding that our team knew exactly what to do and we got to work,” he said of the sudden pivot in March 2020. “We got really busy; we modified 76 loans, but one of the first things we did was communicate with our investors and be super transparent. That was rewarding because we got to them quickly and told them what we needed to do and it pretty much played out exactly how we shared with them.”
Merkel told Hotel News Now in a video interview held during a break in the recent Hunter Hotel Investment Conference that despite all the shutdowns and changes 2020 forced on the industry, Rockbridge stayed active.
The company’s investments into leisure surfaced over the last 15 months, particularly with the opening of Emeline, a new-build luxury independent hotel in downtown Charleston, South Carolina's historic district, which the company developed in partnership with Makeready as operator and Swoon, the Studio as designer.
The hotel joins Rockbridge’s portfolio of independents it has grown over the last few years, including Halcyon in Cherry Creek in Denver, The Charter Hotel in Seattle and The Eliza Jane in New Orleans, among others.
These hotels represent the change Merkel said his company started noticing about ten years ago as people started putting more value on the experiences of travel.
“We’ve tried to address that need and desire from a business standpoint … and do a better job of attracting different segments, like leisure,” he said. “So in an urban location, we tried to add more leisure amenities that address some of the weekend demand that’s definitely grown significantly.”
That type of strategy wasn’t about the COVID-19 pandemic at all, Merkel said, but rather about meeting guests with what they want — behavior that’s always going to change.
From an investment standpoint, he said “the next few years are going to be big.”
“We are in the business of creating value in hotels, through cycles and through markets,” he said. “There’s just a lot of opportunity and a lot of need for investment out there.”
Watch the video above for more of Merkel’s thoughts on Rockbridge’s appetite for deals, how the rest of 2021 and 2022 will shake out for the U.S. hotel industry, and more.
Video was recorded on May 11, 2021, by HNN’s Stephanie Ricca.