I must have missed it during the opening cocktail reception at the Americas Lodging Investment Summit, but the truth serum was flowing like water in Los Angeles last week.
Whether during panels or one-on-one conversations, attendees were uncharacteristically honest—if not bold—during the show. Maybe that’s what happens when everything starts going your way, as hotel performance figures and forecasts have suggested.
I sensed it first when I got Jim Holthouser, executive VP of global brands for Hilton Worldwide Holdings, to put a timetable on global hospitality companies entering the economy sector.
“You’re already starting to see signs on the horizon. I’d say within the next two, three years.”
(Granted, Holthouser always has proved candid—a welcome change among a sea of lip service and corporate punditry.)
A better example played out in relation to InterContinental Hotels Group’s $430-million acquisition of boutique brand Kimpton Hotels & Restaurants. We were one of the first to break the news back in December. The resulting traffic to our website was as much a testament to the high-profile nature of the brand companies as it was the underlying dynamics at work.
Here was Kimpton, one of the first, true, honest-to-goodness boutique concepts in the hotel industry—a company that prided itself as a unique counterpart to the legacy brands that long dominated the market—selling its soul to a global power best known for standard, cookie-cutter offerings such as Holiday Inn. (Or so the deal’s most ardent critics, many of them Kimpton brand loyalists, described it.)
By the time ALIS rolled out, much of that outcry had softened, giving some key players time to reflect and share insights previously unshared.
For a more thorough recap, I suggest you check out “Kimpton executives were ‘reluctant sellers.’”
But for the CliffsNotes version, here’s an expanded “quotes of the week” section of my weekly column:
Quote of the week I
“We were reluctant sellers. It’s something we didn’t really want to do.”
—Former Kimpton Hotels & Restaurants CEO Michael Depatie describing the group’s initial hesitation before accepting a $430-million takeover bid from InterContinental Hotels Group.
Depatie made the revealing comment during a “View from the boardroom” panel at ALIS. Turns out Kimpton was simply testing the waters as to what kind of offer, if any, it would get for the boutique brand. IHG’s $430-million bid, which represents 21 times EBITDA, proved too big to refuse.
Quote of the week II
“There was nothing broken, so you don’t need to change anything.”
—The advice Pebblebrook Hotel Trust CEO Jon Bortz gave IHG when he heard of the global chain’s acquisition of Kimpton.
Although Bortz didn’t come out directly to express his dismay that boutique brand Kimpton is now in the hands of a global chain, he certainly conveyed some hesitation during that same “View from the boardroom” panel.
He has a right to proceed cautiously: With 10 Kimpton hotels in its portfolio, Pebblebrook is the boutique brand’s largest owner.
Quote of the week III
“I think boutique by its very nature is unique and special. I don't know how you can create something unique and special in a mass-market way.”
—Niki Leondakis, CEO, Commune Hotels + Resorts, which owns the Joie de Vivre, Thompson and Tommie boutique brands.
Though Leondakis was speaking of the branded boutique segment in general during an interview with HNN’s Stephanie Ricca, they certainly weren’t made in a vacuum. Not only is Kimpton one of the largest boutique brands in the world, talk of its deal permeated a lion’s share of ALIS panels.
Oh, and she was Kimpton’s president and COO for years before taking the top post at Commune in 2012.
Quote of the week IV
“What makes Kimpton great, we’re not going to play with.”
—IHG CEO Richard Solomons during a one-on-one interview at ALIS.
Kimpton contingent, Solomons reads you loud and clear.
The articulate executive told me he appreciated the outcry that arose from Kimpton’s most ardent advocates. It shows their passion, he said. And as for their concerns that their favorite boutique brand would become bland, IHG doesn’t plan to change anything, Solomons said.
He obviously has a lot of skin in the game, so the cynics among you might view his reassurances as hollow platitude. But remember this: IHG has experience in the branded boutique space. The company operates Hotel Indigo, which, although it hasn’t resonated as deeply with consumers, still focuses on unique experiences that leverage the local community.
Beyond that, Solomons legitimately conveyed a sincere appreciation for Kimpton, its history and its customers.
Time certainly will tell. I just hope the key players are as bold in their commentary in the future as they were last week.
Now back to the usual stuff …
What’s making me happy this week?
The Hotel Covell, a homespun gem that just opened in the Los Feliz neighborhood of LA. Although I’ve never visited myself (I’m kicking myself that I missed it during my recent trip to ALIS), this recap has given me an itch that only an in-person stay will scratch.
The property is the brainchild of local restaurateur Dustin Lancaster. His concept hits eerily close to home: Create a hotel based on a fictional author (in this case, one named George Covell), with each of the rooms representing a period in his life.
The result looks inviting, quirky, homey and inspiring. Sign me up.
Stat of the week
698,402 rooms: The largest existing footprint of any global chain belongs to Hilton Worldwide Holdings (or at least according to the major players’ third-quarter earnings statements).
Don’t ask me how I came across this number. Sometimes you just trip into a hotel data rabbit hole.
Reader comment of the week
“I am applauding keep up the good work. Jeff should give you a raise. Not drinking the Kool Aid keeps you alive and well. What you left out is someone should look at inflation adjusted Revpar andNOI withough the luxury segment and without th egateway cities, and then see how everyone is doing. Much better than 2009, but not much better inflation adjusted than 2007. (sic)”
—Avid HNN reader and onetime columnist Joel Ross (aka Dr. Doom) lauding Shawn A. Turner for his “3 misleading messages from ALIS.”
So much for my earlier statement about the truth serum.
Email Patrick Mayock or find him on Twitter.
The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concerns.