NABHOOD Hones In On Ownership Goal

ATLANTA— Hosting its annual conference here, The National Association of Black Hotel Owners, Operators and Developers, Inc. (NABHOOD) is marking a decade of solid progress as an organization, and with 231 African-American owned hotels now in the U.S., is almost halfway to its stated goal of having 500 such properties open and operating by 2010. A record number of attendees— 373— were on hand at the Atlanta Marriott Century Center to network, learn and assess the opportunities for development, ownership and management within the lodging industry as part of NABHOOD’s 10th annual International Multicultural Tourism/ Hotel Ownership Summit and Trade Show. Andy Ingraham, the association’s president/CEO, told HOTEL BUSINESS® the robust turnout was “an indication of the interest in the lodging space. I think as we create more awareness you’re going to find even more people interested as more [hotel]brands help us spread the word. People are really excited about this opportunity; the hotel industry is just an exciting industry.” Capacity Crowd To prove the point, Ingraham noted a scheduled owner’s session was slated to accommodate 50 attendees, but 183 crowded into the room. “All committed to join NABHOOD. That’s truly an indication of interest that’s happening in this space,” he said. Such an influx would bring the association’s membership close to 500 persons. According to NABHOOD, minorities spend more than $50 billion yearly in the hospitality industry, which racked up $113.7 billion in gross sales with a total of 49,000 domestic properties in 2004 (latest figures available) of which African-American properties represent a miniscule percentage. While several major hotel companies, such as Marriott International and Hilton Hotels Corp., helped pioneer diversity efforts, many more have come to support NABHOOD in its quest to raise the percentage of African-American owned hotels. Among those sponsoring events, sessions and trade show booths here during the four-day summit were Marriott; Hilton; InterContinental Hotels Group; Choice Hotels International; Wyndham Hotels Worldwide (Cendant Hotels Group); America’s Best Franchising, Inc.; Carlson Hotels Worldwide; La Quinta Franchising LLC; and Starwood Hotels and Resorts Worldwide, Inc. “It’s snowballing,” said Ingraham. “People are realizing that the African-American market is really an untapped, underserved market. These folks (attendees) can afford to buy whatever they want, and they’ve decided the lodging space is where they want to be.” NABHOOD Chairman Michael Roberts, who also is chairman/CEO of The Roberts Companies, which includes the Roberts Hotels Group, stressed the association is “an organization that’s about ‘show me.’ It is an organization that is specifically set up to help, and we do that through action…we’re all capitalists; we’re no longer entrepreneurs. The difference is entrepreneurs are interested primarily just for their own family; the capitalist really looks for generational wealth and to allow for their employees to have sustainability and to grow. We want to be the Henry Ford of a hundred years ago so that 100 years from now those who write that history will say thousands of people have been employed, families have been enriched, their children have been educated all through the efforts of NABHOOD and its various players and developers and owners of hotels, and even our suppliers and vendors.” The conference drew a wide spectrum of politicians, including Atlanta Mayor Shirley Franklin, who welcomed the group; lodging company executives, such as Cendant Corp. Hotel Division President/CEO Steve Rudnitsky; and a who’s who among African-American hotel industry movers and shakers, such as NABHOOD vice chairman Tom Baltimore Jr., president/RLJ Development, LLC, who gave a luncheon presentation on the company and some of its recent activities, such as the $1.7 billion portfolio buy of 100 White Lodging hotels. Several of those key players kept the pace lively during an executive roundtable moderated by Norman Jenkins, senior vp/North American Lodging Development for Marriott International. The panel discussed some of the issues, opportunities and lessons learned thus far regarding the lodging industry. “We’ve been focused for the last two years on buying existing assets— good, solid brands: Marriott and Hilton. Now we’ve got to look at what opportunities exist in building. We’ve reached the point in the cycle, particularly at the end of last year, where the cost of buying was at, or near, replacement cost,” said Kenneth Fearn, managing partner/Integrated Capital, LLC, noting his company is working on its first new build in the Washington, D.C. area. Roberts, with seven hotels in his portfolio, emphasized would-be investors/owners/developers need to look at location. “Many of us think our own home city is where we want to be in. Your decision should be based on who you are and your bench strength within your company,” he said, adding he likes to buy properties that are tired and in needs of a PIP. “I try to buy hotels in the range of $15,000 to $30,000 per key,” he said. Henry “Hank” Thomas, president/Victoria Hospitality Properties, cautioned the audience about accepting at face value the many stories of distressed properties being acquired below market value and being turned into jewels as a way to wealth. “If you’re going to look at an underperforming property, you’d best know why it is underperforming. Then don’t overestimate your abilities to turn it around. Be sure you can come in there and immediately improve those operations,” he said. Tracy Colden, executive vp/general counsel of Highland Hospitality, said when looking at brand decisions, revenue premiums should be kept in mind, as well as saturation of the marketplace and quality. Warren Fields, principal, Pyramid Advisors, offered some “lessons learned.” “I’ve been in the business 20 years and I still learn something new every day, so have a little humility. Number two is to surround yourself with really good people…Third, there are a lot of good people in the business. Reach out, get advice— not all of the advice you’re going to get is good, sometimes you have to go with your gut. And you will make mistakes, but that’s okay,” he said, adding its better to work toward a solution than assign blame. Value Of Education James Guillory Jr., president/Centerpointe Hotels, offered a “lessons learned” piece of advice for the audience. “Have a consultant for your consultant,” he said, telling the audience it is “important to educate yourself” about the industry’s fee-charging groups— consultants, architects, designers, etc. that can add significant costs to what appeared to be a feasible project. “Don’t let the education come after, because an education after is really costly,” he said. Toward that, NABHOOD conducted a series of workshops and seminars throughout the conference. Among the topics were: financing hotels; finding a broker or a site or a brand; deciding whether to build or buy; learning about public/private partnerships; diversity initiatives in place by the major franchise companies; structuring a hotel’s management; creating mixed-use joint venture deals and partnerships— and likely of particular interest— how to become a first-time hotel owner.