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Trust Hospitality hits ground running, eyes growth
July 14 2011

Tecton Hospitality has merged with Ocean Blue Hotel Solutions and the result is Trust Hospitality, a global hotel management company with a new COO.

Highlights
  • Trust has expressed interest in aggressive international expansion with management deals pending in China, Colombia and Panama.
  • Goddard spent time with Conrad International Hotels, Loews Hotels & Resorts and Rosewood Hotels & Resorts.
  • Trust opened its first hotel in China and expects to open three in Colombia within the next month.
By Jason Q. Freed
Contributing Editor, Tech Impact Report

MIAMI—Tecton Hospitality has merged with Ocean Blue Hotel Solutions and the result is Trust Hospitality, a global hotel management company with a new chief operating officer and sights set on international expansion.


With the merge, Tecton’s CEO Richard Millard has brought on 15-year hotel veteran Patrick Goddard to replace Raul Leal as president and COO, who left in late 2010 to serve as president and COO of Virgin Hotels. And Trust has expressed interest in aggressive international expansion with management deals pending in China, Colombia and Panama.

“I’ve known Patrick for a long time; we’ve been friends and colleagues for a long time,” Millard said in an interview with HotelNewsNow.com. “What he really is is my replacement for Raul. He’s a very experienced hotel guy.”

Goddard was most recently president and managing director of Ocean Blue Hotel Solutions, a management and consulting firm with expertise in sales and marketing and revenue management. Prior, he spent time with Conrad International Hotels in Europe, Loews Hotels and Rosewood Hotels & Resorts in various sales, rooms and food and beverage positions.

“I had been operating a smaller version of a boutique hotel management company and started to expand over time,” Goddard said. “I was running into the point where I was going to need to invest a lot of capital to invest the breadth of resources to properly service my clients or merge with someone.

“I’ve always respected Richard and eyed his organization; our organizations had a lot of synergies,” he added.

Goddard brought his clients to Trust Hospitality’s portfolio, which now totals 22 hotels.

He said although Leal left some big shoes to fill, he hopes to bring a different perspective to Trust.

“Raul was a great leader for this organization. He was tantamount to creating this organization and he left a legacy that he won’t be forgotten for,” Goddard said. “Everyone has their own individual skill sets, and I feel I’m bringing a different perspective certainly to our clients. In the past we had pretty rigid terms as management companies go; now we’re far more asset-driven.”

Goddard said nothing will change at the former Ocean properties from the consumer or employee standpoint.

“Trust is not a brand. We’re not hanging signs over anyone’s door,” he said. “My clients got a major upgrade for available resources and personnel. Not to discount what we were doing before, but I think it’s quite an improvement. They’re happy about it.”

“It’s not really a transition at the property level,” Millard added. “We haven’t changed our modus operandi. It will be pretty seamless.”

Trust will be strictly a management company, operating branded and independent full-service hotels. Trust is approved operators for Hilton Worldwide, Marriott International, Hyatt Hotels & Resorts, Starwood Hotels & Resorts Worldwide, Wyndham Hotels & Resorts and InterContinental Hotels Group.

International expansion
The company recently opened its first hotel in China and expects to open three in Colombia within the next month, Millard said.

“I was just in China in May; it’s very interesting and fascinating,” Millard said.

Their first hotel in China is a resort property with ski slopes and private villas located in Harbin, which has a population of 12 million, Millard said.

“The scale there is massive,” Millard said. “Their education in the hospitality business is very, very thin. But they’re very willing to learn; they’re very hospitable people themselves.”

A second deal in China s nearly closed, he said.

In addition to China, Millard said there are multiple deals being wrapped in Colombia and a “more commercial hotel” under construction at an airport in Haiti.

“I do have the advantage of speaking French, Spanish, English and I can fumble my way through Portuguese,” Goddard said. “And we’ve diversified. We’re not trying to operate all these hotels from Miami; we’re establishing real services internationally.”

Challenges/opportunities
Millard outlined four key issues facing hotel operators today:

1) Distribution. In terms of losing revenue share to competitors, Millard said it’s time for hoteliers to start taking responsibility.

“We seem to blame everyone else; hoteliers talk about (online travel agencies) as bad guys, but they’re another source of sales and marketing,” he said. “It’s not the end of the world. If you have a good product, you have to pay to market your product. We need to look at those guys as allies; they’re certainly not the enemy.”

He said in 2000 less than 10% of Tecton’s business came through e-commerce channels; now 80% does.

2) Lack of capital. Millard said a challenge to many hoteliers is the lack of available capital to grow the business.

“I don’t know if there’s any miracle there, we just have to wait it out,” he said. “Us hotel guys now have the guys with capital telling us how to run our hotels.”

3) Skilled workforce. Millard said it continues to be difficult to encourage bright, young people to come in the hotel business.

“We do a poor job of treating GMs like they don’t know what they’re doing,” he said. “They do.”

4) User-generated content. Millard said user-generated content, such as reviews, is the biggest decision-making tool there is for people to stay in hotels, particularly in destinations where guests haven’t been before.

“TripAdvisor is incredibly important; we take it very seriously,” he said. We think, we respond, we react to the customers. It’s as important, or more important, than the old comment card we used to pay attention to.

“People who don’t do well (on TripAdvisor’s rating scale) will tell you it’s rigged. It’s not.”

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