Since founding Waterford Group, LLC, in Connecticut in 1986, Chairman/CEO Len Wolman has kept a steady focus on creating a powerhouse company comfortable in a variety of sectors, notably developing and operating hotel, gaming and venue properties totaling more than $3 billion throughout the U.S. This includes development, ownership and/or management of more than 65 hotels, 8,000 guestrooms, 700,000 sq. ft. of convention/meeting space and numerous dining establishments; and the development of the $1.5-billion Mohegan Sun Casino in Uncasville, CT, in partnership with the Mohegan Tribe of Indians of Connecticut and Kerzner International.
And, after almost 30 years, the South Africa native shows no signs of slowing down, adding six hotels to the Waterford portfolio in the past year.
Passionate about the industry and active in numerous hospitality associations and community-beneficial projects, e.g., affording students from the University of Johannesburg’s School of Tourism and Hospitality the opportunity to travel to the U.S. for 18 months to work at one of Waterford’s properties, the executive did put the brakes on long enough to share some thoughts with Hotel Business.
Waterford Hotel Group has been pumping up its hotel-management portfolio in recent months, including four properties in Connecticut, where the company is headquartered and has a concentration of hotels. Was this a strategic move or more opportunistic?
Waterford Hotel Group has added six hotels to its portfolio in the past 12 months. The four Connecticut properties were opportunistic transactions with our investment partners, which will provide good returns based upon different levels of CapEx investment in each asset, as well as changes in management and marketing support and structure. In addition to these four local acquisitions, earlier in the year we acquired the DoubleTree Hotel in Little Rock, AR. This was somewhat more strategic because we believe in repositioned, full-service properties, and we want to continue to grow outside of New England. We also took over management of a project in New York for a financial institution that we have since stabilized and repositioned for sale.
Waterford’s hotel management mix includes branded full-service, select-service and extended-stay product, as well as historic and independent properties. How are you looking to shape the portfolio in the near term and the future?
Our efforts focus on helping to assure a diversity of hotel styles, sizes and locations. We cannot always control this, of course, and we respond to interesting opportunities
as they arise; yet we also proactively focus on different kinds of hotel assets and opportunities.
Does Waterford historically make majority or sliver equity investments into the hotel properties it manages?
Our current portfolio is a mix of both third-party management and sliver equity investments.
Are you looking to further increase Waterford’s depth of expertise by doing more convention-center or gaming-venue projects such as the Connecticut Convention Center and Mohegan Sun?
There has been a lot of expansion in the gaming environment since we developed Mohegan Sun with the Mohegan Tribe. We believe all of this activity will generate more opportunities for us, and we look forward to that. Convention-center projects are somewhat unique because they often involve government agencies, and changes in existing relationships do not happen quickly. We are constantly seeking viable opportunities.
What do you see as a distinct challenge for management companies today, and Waterford Hotel Group in particular?
More than ever before, there is a strong focus on hotel real estate and third-party investment in hotel real estate. This has resulted in more rapid turnover of assets, sometimes three to five years, and the need to invest in assets that are unencumbered by management. The challenge for hotel operating companies is to stay abreast and ahead of this activity in the interest of maintaining opportunities for all of the talent in the operating company. In addition, associate compensation and benefits, particularly health insurance, are of increasing concern and sensitivity, and we need to be able to constantly increase revenue, profit and investment return.
What are the top three things your owners are asking Waterford to do, and have these requests changed significantly from when you first started the company?
Owners and investors want return on investment, superior guest satisfaction scores (inclusive of immediate daily judgment by the likes of TripAdvisor and others), proper maintenance of the asset and brand satisfaction.
As a native of South Africa, what’s your take on the lodging industry’s “awakening” to the continent as a viable investment/expansion platform?
There is clearly a good opportunity in South Africa, and Africa as a whole. However, the continent is not easy to penetrate. There are a number of local groups, such as Sun International, Tsogo Sun Hotels, City Lodge Hotel Group, Protea (which was acquired by Marriott) and others that have a great platform to expand in South Africa and beyond.
What excites you about today’s lodging universe?
This business has always been about people—associates, partners and customers—and this is where and how we can differentiate ourselves from others. The thing that is most rewarding to me is having witnessed the career growth of many of our associates over the years, from line-level positions to leaders in our company; that is exciting. I am grateful for the success of our organization, but what continue to make me most proud are the outstanding associates that I work with every day. HB