NEW YORK— Growth is on the horizon for the Boutique Hotel Group (BHG) following the naming of Steven Marx as president/COO of the upscale management company, which has six luxury hotels in its portfolio. Plans are to at least double that number of contracts over the next three years, as well as launch a separate entity to manage non-boutique properties in a venture with two well-heeled partners. Marx, a 25-year industry veteran, said the first move toward expansion is already perking. “We’ve linked up and are finalizing our discussions with two principal capital partners,” said Marx, who added that they would be partners in the Boutique Hotel Group. “This would give us the additional investment capital to put on a serious marketing effort to grow the company from a management contract standpoint.” BHG’s properties, which are owned by Credit Suisse First Boston, include: The Mansfield; The Roger Williams; The Shoreham; The Franklin; and The Wales Hotel in Manhattan, and the Beverly Crescent Hotel in Beverly Hills. Also aiding BHG’s expansion plans is Marx’s recent background. He served as vp/hotels for boutique pioneer Kimpton Hotel and Restaurant Group, where he doubled company assets during his tenure from 1993 to 1999. He also helped develop Kimpton’s Monaco brand before leaving to join Loews Hotels for a two-year stint as executive vp/operations. “It’s a logical starting point for us to approach owners and operators of independent boutique hotels around the country to try to leverage our ability in that field. To do that effectively takes a fair amount of investment capital to really market yourself,” said Marx. While not disclosing the venture partners, Marx said one is a private family company currently without lodging assets; the other is an international financial services company with a portfolio weighted in real estate, and a raft of European lodging assets, which may open yet another door for BHG. Both companies “are pretty flush with cash,” said Marx, noting that “They have the ability to cut good deals from the acquisition/joint-venture standpoint. We would come in as the operator and potential equity partner so they could safeguard their investments by actually having a piece of the management company that will ultimately manage those assets.” ‘Mother Company’ Another part of the strategy would be to craft a separate “mother company.” “It would be more of a generic name for the company which would allow us to seek management contracts on non-boutique hotels. They could be flagged hotels; they could be hotels currently managed by one of these two financial partners— a Radisson, a Hilton Garden Inn, whatever. We would be opportunistic [in]managing branded properties that don’t fit into the boutique hotel field under this umbrella company. Then, under the boutique brand, we would go out and manage/joint-venture hotels that are strictly boutique,” explained Marx, adding the group might pursue ownership opportunities under either scenario or both. “And that could be in the form of either actual cash, or more likely, the subordination of management fees and/or the value of the company being presented as an equity piece in the deal.” Furthermore, Marx didn’t think it likely the company would do new construction, but would stick to its strategy of repositioning properties. “We feel there’s opportunity in some of the secondary markets— e.g., St. Louis, Indianapolis— to be the best, small, cool hotel in town and dominate the market,” he said, noting such a market might not support a four-star boutique property well. “The niche we’re going to carve out will be boutique, but not quite as luxurious as a typical Kimpton.” Marx believes the best expansion opportunities are east of the Mississippi, the Southeast, the Midwest, noting most of the boutique developers are West Coast-based. While there aren’t plans for branding, Marx expects to drive home the common denominators that tie the individual propertie
