WASHINGTON—For the second time in a year, industry veteran Ted Knighton finds himself facing a new challenge at work. Named COO of mega-management company Interstate Hotels & Resorts in the fourth quarter of last year, this summer, the executive added the role of president to his CV.
As COO, Knighton, who previously ran the U.S. operating group for Interstate, found himself “jumping into” the international scene, particularly concerning business in Moscow, India and Shanghai. Now responsible for global operations, Knighton is concentrating on integrating systems and operating practices that have been successful in the U.S.—its largest market—with its extended operations.
“Kind of put different versions of that into the world so that we have one, single
operating platform,” said Knighton, noting the rapid growth of markets like Russia and China make it necessary to be networked and well-connected.
Since joining the company in 1990, Knighton has seen the company transition from public to private, undergo merger and acquisition, and grow to a global organization, now as a wholly owned subsidiary of a 50/50 joint venture between Thayer Lodging and China-based Shanghai Jin Jiang International Hotels Group Co., Ltd.
In characterizing the company at this juncture, he said the basics, the culture of the company, really haven’t changed that much. “The philosophy of choosing the best talent, our philosophy of taking care of the owners of these hotels, managing one hotel at a time—i.e., not forgetting we’re running one hotel we’re not running 400—and staying at a level operationally where we’re focused on all those things never changed.”
With the shift in his own role, the executive is focused on several paths, roads he wants to take without losing sight of the company’s roots of running one company at a time and “achieving superior operating results. That has to stay—and taking care of these investors,” he said.
Knighton acknowledged some goals are “easier said than done” but also said Interstate has huge resources to use across the globe. “That’s the vision going forward: to be the leading independent operator of hotels. That’s where we want to be.”
In helping realize goals, Knighton said he and CEO Jim Abrahamson are “a great team.”
“My job, overall, as I look at it, is to be involved in the vision of the company and the strategic plan. I’m very much involved with that with Jim, but ultimately, my job is execution; to get this all done in all the hotels around the world with consistent and good performance in the areas of sales and marketing, operations, technical services, food and beverage services and consulting services, and to make sure that we have a program and that the company runs well,” he said.
For example, Interstate is currently layering in proprietary technology, including financial systems to its China properties, adapting them as necessary.
In expanding the company, Knighton points to being “wise enough to have a good partner” when doing international deals.
For example, Interstate partnered in India with JHM Hotels, which has long-standing experience in the market. “They assist us culturally in doing business in that country,” said Knighton. Earlier this year, JHM Interstate Hotels India signed a contract to manage the 85-room Khyber Mountain Resort and Spa in the resort area of Gulmarg in Kashmir. The property is being developed by Pinnacle Resorts Pvt., Ltd. and is slated to open at the foot of the Himalayas this winter.
Similarly in China, the company division known as Interstate China Hotels & Resorts Co., Ltd., a joint venture between Interstate and Shanghai Jin Jiang International Hotels Co., Ltd., runs several hotels for Jin Jiang. Jin Jiang owns and manages more than 850 hotels in the country.
Interstate China recently inked a contract to manage its 10th hotel in the country, the 396-room Jiaxing Jin Jiang Xiang Jiadang Lake Hotel in Zhejiang Province. The new-build hotel, approximately an hour drive from Shanghai, is slated to open next year and will include two-story villas and 26,000 sq. ft. of meeting space, restaurants, spa, fitness center and swimming pool.
Interstate China is also slated next year to manage the Citic Pacific Zhujiajiao Floating Hotel in Qingpu near Shanghai, and additionally what is expected to be China’s tallest hotel when it opens in 2015, the J Hotel at Shanghai Tower.
The company also is managing the 850-room DoubleTree by Hilton Shanghai Pudong and the 514-room Shanghai JC Mandarin Hotel.
Although Interstate has been in Russia since 1995 helping pioneer third-party management, Knighton noted it is now seeing greater movement in the area. It recently acquired contracts for six hotels, notably in Sochi, the site of the Winter Olympics in 2014. These join a number of properties, such as the 273-room Hilton Moscow Leningradskaya, in the country. Other brands include Holiday Inn, Renaissance and Marriott. “We’re going to open up the JW Marriott in Sochi,” said Knighton, along with a 350-room Courtyard by Marriott and 398-room Marriott, as well as three independents.
Knighton said while having the right partner is key, it’s equally important to understand the solvency and feasibility of a project and if “you can be a success there. You don’t do every deal you see. The evaluation process is important,” he said.
Globally, Interstate and its affiliates have ownership interests and/or manage almost 400 hotels, and it wholly owns six properties. Owning real estate is not a critical goal for the company and Knighton stressed third-party management is the core business; however, the executive said the company would soon be buying a seventh hotel in the United States. “It’s an opportunistic situation. If we see the right deal and the right situation we are still in the game to purchase hotels. Joint ventures do very well by us, so we’re always looking at the joint-venture situation.”
In the U.S., Interstate will be managing a high-profile Residence Inn and Courtyard by Marriott, slated to open late next year in New York City. The 68-story, 639-room property will be located at 54 St. and Broadway. “It’ll be the tallest hotel building in Manhattan; it’ll be a spectacular project,” said Knighton.
The executive noted, like many things, relationships played a role in snagging the contract. “The person who owns that, Harry Gross and his company, also owns the Residence Inn in Times Square, which we manage, the Courtyard Times Square, which we manage, and the JKF [Airport] Courtyard, which we manage. We’ve managed hotels for him for a number of years, so we were able to secure that contract with him,” said Knighton.
Other recent projects in the U.S. include managing the 473-room Pheasant Run Resort in Illinois and the newly opened 165-room Eilan Resort Hotel & Spa in San Antonio, TX. In addition, Interstate did a fourth joint venture with private investor group, Waramaug Hospitality, LLC, to acquire the 295-room Williamsburg Hotel and Conference Center in Virginia. Approximately $7.5 million will be invested to transform it to a DoubleTree by Hilton.
Similarly, Interstate in late July completed a $9-million renovation of a Crowne Plaza in Florida, converting it to the Sheraton Tampa East Hotel. The 265-room hotel also is a JV with Waramaug.
“China, India, Russia, Europe are big growth areas for us; we’re real happy that we’re in there. The U.S. continues to be a big source of deals for us and that will continue to be a large growth area for us,” said Knighton. He added, “We could get a lot bigger. It just depends on market conditions. We’re certainly not going to limit our size.”