PITTSBURGH, PA—CAM Hospitality Advisors & Management, LLC gets its name from the driving force behind the seven-year-old firm, Christopher A. Mannino. Besides lending his initials, as President/CEO, the industry veteran has been raising the profile on the Pennsylvania company and growing the portfolio of hotels it third-party manages, as well as asset manages.
Toward this, the company recently contracted to manage Bishop’s Lodge Ranch Resort & Spa in Santa Fe, NM; the historic Luxe Stoneleigh Dallas Hotel & Spa in Texas; and the DoubleTree by Hilton Pittsburgh Green Tree, here, in its own backyard. At the same time, it took on asset management contracts for the Sheraton Framingham Hotel & Conference Center in Massachusetts; the Sheraton Safari Hotel & Suites in Florida, which, at press time, is slated to become The Sheraton Lake Buena Vista Resort & Spa following its current $25-million renovation; and three Hyatt Hotels in Illinois: the Hyatt Lisle, the Hyatt Rosemont and the Hyatt Deerfield.
Mannino and his team—many of them former executives at Interstate Hotels & Resorts, Mannino included—have been leveraging their skill sets and contacts to push owners out of the recent dark economic days in terms of their properties.
“We’ve spent a lot of time really working on repositions,” said Mannino, regarding the latest additions. He termed the Sheraton resort project “right down the center for us in making those kinds of transitions and really creating value for [partners]Apollo Real Estate, now [known as]AREA Property Partners Group, out of New York City.”
With more than two-dozen properties being handled by both the advisory business and the management company, Mannino indicated the next several years could bring more expansion.
“We’ve been growing more on the one-off deals through our capital partners and their affiliates. I think our focus going forward is looking at more portfolio-type purchasing and looking at larger deals,” he said.
In taking on new business, Mannino noted concerns by owners are not as simple as in the past, particularly regarding fundamentals.
“We have seen strong occupancy demand and, probably for the first time in recent history, we just don’t have yield demand from rate. It’s a very different environment out there. We still have to maintain some focus on productivity and yield of NOI for ownership, and making sure that inflation does not eat up all of that flow-through from occupancy,” he said. “We are in a very different economy in the hotel business because we have not seen the rate compression that we like, although occupancy may be as strong as it’s been in the past seven or eight years.”
CAM has been more aggressive with its properties since approximately May 2009. “When the markets started ‘coming back,’ we really started to focus not so much on changing the rate, but changing the mix,” said Mannino. “Our mix of business changed with our strong brands of Hilton, Marriott and Hyatt, and getting away from some of the lower-tier business, some of the more base, airlines-type business, moving that back into the right distribution where it belongs in the comp set. With the stronger brands, we were able to steal share during that down time; now it’s time to give it back to its proper owners and for us to actually move into much more premium-segment business, even if it means reducing occupancy.”
What would appear a contrary tactic to some, Mannino indicated pushing down occupancy is appropriate in some circumstances CAM is facing. “We’re looking to ‘turn off the machine’ a bit. When you have great brands like Embassy Suites and Marriott, we have some hotels running north of 90% occupancy annually. For example, our Embassy Suites in Puerto Rico ran 99% in July last year. We’re looking at that hotel and saying: ‘Do we really need to run at 99%? Should we not run 85%? And some of the lower-tier business, move that out?’ It’s a nice problem to have,” said the CEO.
“What we want to make sure of is that we’re not putting too much stress on the physical asset,” added Mannino. “We want to try to find the right mix of business and really yield better NOI through rate yield and really limit what type of business we take.”
The executive acknowledged such strong occupancy is not the case with all the brands CAM has. “I wish we had that ‘problem’ with some of the more-tertiary brands; it’s typically in the upper-tier brands.”
Mannino stressed CAM is “hotel-centric” in its outlook and harnesses the thought process of “hotel guys” behind its decision making at both the third-party and asset management levels. Among the team members are: Douglas Peckham, VP/asset management; Bruce Roy, corporate director/operations; Verdell Ekberg, VP/sales and marketing; Tom Roman, corporate director/finance; Randy Glover, director/accounting; and Kelly Hawkins, corporate director/human resources.
“We try as an asset manager to be a resource to the management groups that we work with. Rather than be report writers, we try to integrate with the management companies and actually look to partner-up and find those solutions to some of the issues when it comes to flow through, productivity and strategies for top-line sales,” he said.
For instance, one current issue is that “inflation is still outpacing the flow through from a standpoint that the return of revenues is coming from those segments that don’t produce as high of a profit margin as they would if they came from pure rate,” said Mannino.
On top of this, expenses have returned to “the old days,” he noted. “We have full benefits [for employees], food costs are rising, etc. It has owners concerned.”
Education around why certain issues occur is key, said the CEO, both for his own company and the companies with which it works.
“After everything that’s occurred, it’s important to reset plans forward with a look at finding ways—still, as we are on the way up—of not taking on the type of additional expenses that we would traditionally have if we were to return to ‘completely normal’ times. We need to stay in a defensive position.”
