JUPITER, FL— This summer will mark a year since hotel management, ownership and development company Cardel Group, Inc. merged with Driftwood Hospitality Management LLC, bringing six Florida hotels and a timeshare operation in Costa Rica to the table, for which Driftwood delivered a 15% equity contribution to the portfolio. Also into the mix came Cardel’s President Carlos Rodriguez, who is now a principal and executive vp/real estate, developments and acquisitions for Driftwood, which is headed by President David Buddemeyer. Driftwood’s goal is to maximize services and minimize expenses in terms of hotel operations and its growth strategy encompasses acquisition, management and new development/construction. Currently, despite doing several ground-up properties, Rodriguez said new development is getting the least amount of focus. “It’s a timing issue. Right now you can acquire things a lot cheaper than you can build. So from an economic standpoint it’s better for us to focus on acquisitions,” he said. The company is actively looking at doing one-offs and portfolios in terms of acquisitions. “We’re looking to take new management contracts from third-parties on an active basis,” Rodriguez said. Toward that, Driftwood recently contracted in Florida with properties in downtown Miami— converting a Renaissance to a 526-room Radisson— and in South Beach, taking on The Claridge, a 50-room boutique property. In Napa, CA, it acquired the contract for the $15 million, 106-room River Terrace Inn that opened in March, and had two more lined up in Phoenix and Tucson, AZ— representing 545 rooms— at presstime. At presstime Driftwood owned 12 properties and had 14 properties for which it third-party contracts. The merger, said Rodriguez, has given the combined companies “size” and “a presence in different markets of the United States,” as well as the ability to now offer owners these attributes along with increased services. Driftwood has widely scattered properties from Hawaii to Oklahoma to New York. However, more than one-third are located in Florida. A half-dozen staff members— three full-time— are concentrated on development, “meaning acquisitions, third-party management and growth,” said the Rodriguez. “We do have in the pipeline a lot of deals that we’re looking at currently. We do everything: from third party to sliver equity to a joint venture to full acquisition. And actually we sometimes lend money in order to obtain the management contract, to assist. We provide working capital loans. We’re pretty flexible as to trying to help the owners and structure ways of improving the situation for each individual hotel owner,” he said, adding: “One of the things we’re known for is repositioning hotels and turning around situations.” Driftwood prefers to work with five-year, third-party contacts and the trend the executive sees is for them to remain shorter rather than longer. Owners, too, are keen on improving their market penetration index and RevPAR. “It’s some of the repeated concerns I’ve seen. How to improve the bottom-line NOI— what at the end of the day is left in the bank for the owner,” said Rodriguez. In conducting analysis on a property, Driftwood dips into its own operations landscape and performance numbers for comparisons. In its portfolio are limited-service, extended-stay and full-service hotels that run from small hotels to “big boats”— 1,000-room hotels. “We can actually show to the owners similar situations where hotels [like theirs]have been repositioned and what our performance has been with those types of hotels,” said Rodriguez. Driftwood works with both single-property owners and multi-unit owners, and noted a tendency toward contracting with multi-unit owners. “We creating funds to acquire hotels, turnaround a situation and not hold. Basically, that way we can churn our money,” he said. “We’re turnaround specialists. We like to grab properties and improve their performance. We’ve done this for a lot of
