NEW YORK — Remington Hospitality is looking to grow its portfolio internationally, and it has a goal of having 10 to 15 hotels in the Caribbean and Latin America under management within the next year.
The company currently has two hotels already under management with another six to eight in development.
“The goal may be too low if things keep going the way they are,” said Jason Reader, senior vice president of operations at Remington.
The focus on growing in the Caribbean and Latin America was enough for the Dallas-based Remington to open a satellite office in Miami, Reader said. The office is located in Miami’s Brickell neighborhood and is connected to the InterContinental Miami hotel.
The Dallas headquarters and Miami office don’t co-mingle, he said. The CALA-focused team is dedicated to the region. That means there isn’t a vice president of operations visiting hotels in Washington D.C. and then flying to Belize.
“The whole point is to show ownership that we’re serious about going into CALA,” he said. “We’ve got our head of operations based out of there. We’ve got a development person based out of there. As we grow that division, we’ll grow the team, too.”
Remington assumed management of its Costa Rica property, Croc’s Resort & Casino, in November 2023 and the Puerto Rico hotel, the Hotel Miramar, in May, Reader said.
Once Remington started looking at Costa Rica for its first property, the team saw opportunities throughout the country. There are now several in development that have signed hotel management agreements.
The new hotels are in various stages of construction, he said. Some are far along enough that they’re six to eight months from opening while others are at least a year out. What’s been interesting about this process is that because Costa Rica’s government recognizes the importance of tourism to the economy, it’s easier to get financing in Costa Rica for a new-build hotel project than it is to get for a hotel in the U.S. that already has existing cash flow.
All of these hotels will be third-party-managed, which isn’t to say there won’t be certain deals that Remington will invest some sliver equity, Reader said.
While the owner of the hotel in Costa Rica is actually from Michigan, the remaining hotels are almost all owned by local, small family office owners, he said. The institutional owners can be nervous about investments outside of the U.S. and have to follow different rules.
The space Remington wants to grow in is the upper-upscale resort and lifestyle segment, Reader said. Those types of hotels make up the majority of what’s being developed in the Caribbean and Latin America region. Similarly, when Remington looked at international locations to expand, the proximity of the Caribbean and Latin America made the region more appealing than trying to work in Europe.
“To do it the way we’re doing [it], ... we need to be someplace that you can get to relatively easily,” he said.
Along with the types of hotels and the proximity, Remington’s executives generally liked the Caribbean and Latin America region. There aren’t that many third-party managers in the region, especially not at scale, so there are a lot of opportunities for Remington to grow.
The move helps Remington diversify its portfolio, Reader said. In the Northeast, the first quarter of the year is the slowest season while the opposite is the case for the Caribbean. Similarly, during summer in the U.S., leisure travel picks up and, while still busy in the Caribbean, it’s slower than the first quarter.
“It’s nice to balance out business levels,” he said.
Remington is exploring options in Belize and has a couple options in Mexico, where one potential project is close to coming under Remington’s management, he said. Overall, the company is looking at opportunities in eight to 10 countries in the Caribbean and Latin America.
“For whatever reason, we have had a lot of success in Costa Rica. That’s where a lot of our development deals are, and we’re not restricting ourselves to that,” he said. “We really want to be well-represented within the region.”
Labor hasn’t been a challenge so far in CALA, Reader said. The wage scales are different than in the U.S. At the Costa Rica property, there’s more staff there than there would be at a U.S.-based resort, and it’s one of the nicer resorts in the area.
“That’s a place where a lot of people want to work, and we have not had staffing challenges at either the two hotels so far,” he said. “Obviously, Puerto Rico is very new, but even then, when we transitioned it in, you’ve got housekeepers who’ve been there 20-plus years. It’s just a very stable situation.”
In the U.S., the labor challenges vary by market, Reader said. At two hotels it manages in Key West, Florida, the company uses contract labor, much like every other hotel in the market.
Overall, the demand for contract labor has gone down, and wage pressures have to started to stabilize, Reader said. During the pandemic, there was a period of 12 to 18 months in which every month or two, he would have to do a wage analysis and make adjustments to make sure the company wasn’t falling behind.
“We were doing wage adjustments pretty frequently just to try to keep up and try to stay competitive,” he said. “I think from that standpoint, it’s better. I think we’re up about 4% year over year in terms of wage growth, which is lower than what it’s been the last few years by a good measure.”