The Indigo Road Hospitality Group finally started to see the plans it had when the company launched its lodging division in 2019 materialize after a pandemic-riddled first couple of years.

"It was pretty much a watershed year for us," Larry Spelts, president of lodging and lifestyle adventures, said in an interview with Hotel News Now at the Hunter Hotel Investment Conference.

When Indigo Road decided to venture into the lodging industry in late 2019, the expectation was that its service would be highly coveted. A successful launch at the Americas Lodging Investment Summit in January 2020 had Spelts looking forward to ironing out business deals.

“We were like the belles of the ball. Everybody wanted to dance for us,” Spelts said. “It was exciting for us, and it was exciting for the industry that a very successful restaurant that does full-service restaurants … was coming in to operate hotels having such a great track record with restaurants. It seemed like everybody wanted to talk to us.”

The excitement was dashed after COVID-19 swept across the U.S. in the following months and disrupting the hotel industry. Spelts said it was challenging to network and develop growth opportunities after the pandemic began, slowing the company’s ability to come out of the gates firing.

Ironically, the first owned hotel Indigo Road opened — the Skyline Lodge in Highlands, North Carolina, in July 2021 — wouldn’t have happened if not for the pandemic. The company was initially signed on to be the hotel's operator, but the buyer at the time backed out due to pandemic-related financial problems. Indigo Road stepped in to buy the hotel.

Spelts said acquiring a hotel wasn’t in the company’s initial business model, but he viewed it as a “silver lining” amid a challenging period.

“We recognized the tremendous value in the acquisition and the tremendous strength of the market. We’re optimists. We knew the pandemic wasn’t going to last forever,” Spelts said. “We were fortunate that we were able to convince our investment partners to back us and for us to acquire it and renovate it.”

Along with the Skyline Lodge, Indigo Road operates two other hotels: the Alexander Hotel in Miami and The Historic Park Inn Hotel in Mason City, Iowa. Both hotels reached out to the company in late 2021 to take over management responsibilities starting Jan. 1, a development Spelts said led to a stressful, but successful, onboarding process in the final weeks of December 2021.

The company is implementing new food and beverage programming at the Historic Park Inn Hotel, which allows Indigo Road to get back to its roots as a restaurant operator.

“[It’s] really exciting for us because that’s where our passion is, food and beverage, and that’s where we really focus on our hotels,” he said.

Although the vast majority of the company’s open hotels and construction projects are saturated in the Southeastern region of the U.S., it’s not opposed to seeking out opportunities across the country if the fit works.

“We are prepared and interested to go into any market really in the U.S. as long as the product and the concept makes sense for what we’re good at,” Spelts said.

Indigo Road is currently raising equity for acquiring a property in Walla Walla, Washington, the premier wine-producing region in the state, he said.

“That’s just a good example of where we would go outside the Southeast because the project makes sense for us to vary food and beverage,” he said. “It’s a beautiful, independent, historic hotel that would make a great boutique hotel, which is also the space that we really think is strong.”

Moving forward, Spelts said he would like to close on the company’s two pending transactions — the hotel in Walla Walla and one in the mountains of west North Carolina. Indigo Road is also interested in taking over existing hotels that need management.

With the three operating hotels in the portfolio, he said the company would like to double that number by the end of the year.

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