|The Gateway Canyons Resort in Gateway, Colorado
KIRKLAND, Washington—For Patrick Colee, the most important part of any hotel is its personality—those unique, inalienable qualities that make a brick-and-mortar box come to life and stand out from the pack.
But finding them is easier said than done, said the founder and chairman of Noble House Hotels & Resorts.
That’s one of the reasons why the Kirkland, Washington-based hotel owner and operator has expanded at such a slow, methodical pace since its inception in the early 1980s.
But Noble House, which counted only 11 properties in its portfolio as of only a few years ago, has since seen a relative boom in expansion with the addition of seven new hotels. The most recent, The Commons Hotel, is set to open this October within walking distance of the University of Minnesota.
“Noble House as a hotel company has only acquired or taken on management contracts for properties that we consider to be unique in the communities they’re in,” Colee said.
“As a result, we generally are in the top two or three hotels in the market,” he added. “Because we offer an experience that has to do with the culture, the food, the architecture, the interior design—everything has to do with the history of that particular community. Those locations don’t come up very often.”
The recent downturn has changed that slightly, Colee said, as more hoteliers are looking to exit the game amid financial distress. Noble House executives have their eyes on an additional eight to 10 opportunities at present. “We’ll probably end up with four or five of them,” he said.
The long-term goal is to finish in the 25- to 30-hotel range, Colee said, although he emphasized that quality is much more important than quantity.
The same goes for target markets. Noble typically targets “high-end resort communities,” Colee said. As a result, the company’s portfolio, which is spread throughout the United States, has slightly heavier concentrations in Florida and the West Coast.
The current focus, however, has taken a decidedly urban spin. Atop the company’s target list: New York, San Francisco and Chicago.
“(We are) very close to one in Chicago right now,” Colee said.
Approximately 40% of Noble House’s business mix is resort-oriented, leisure travel. The rest is business travel and groups.
Meeting space is not a make-or-break criterion for Noble House, although it certainly helps in some markets, Colee said. “Wherever the resort market is not strong enough on its own to carry itself through the down season or during the week, we like to have group meeting space as well.”
Noble House manages all 18 hotels and 2,301 rooms in its portfolio, but the company is far more flexible when it comes to ownership, its founder and chairman said. It will manage, own or contribute sliver equity where needed.
The company has been around long enough to earn the trust—and financing—of lenders, Colee said. That track record also garners the interest of a range of potential investors, he added.
“We’ve had all different types of partners over the years,” he said. Noble House executives are in talks with two to three partners about buying properties together. At least one is a Wall Street-type investment firm, while another is family-held, private equity.
The unique properties Noble House targets often spur the interest of local parties or investors, Colee said. The hotels exude personality, which in turn foster personal ties to the property or region.
That said, Colee has never found a property that fully fits the Noble House profile. “We never find our product,” he said. “We always have to create.”
The company typically does not develop properties from the ground up, so acquisitions usually are followed by full-scale renovations, he said.
|An artists’ rendering of The Commons Hotel, which is scheduled to open in October.
Building a brand?
While each and every Noble House property feels like its own distinctive hotel, Colee said the collection as a whole—especially in areas such as Florida, where the company has a stronger footprint—is gaining a following akin to that of many brands.
But the Noble House team is not looking to dive in head first. Colee admits freely brands typically have too many rules and do not allow for that high degree of personalization so important to the company’s philosophy.
“Most of the time the brand will hold your rates down. You can actually get a higher rate if you’re in the boutique market,” he said.
And it is not as though Noble House has struggled to market its hotels without the backing of a brand.
“When you have a hotel that’s the unique, institutional-type of property in the community, everybody wants to write about you,” he said. “We’re able to always stand out.”
The Internet has only helped in that aim, Colee said. When it comes to marketing and distribution, “It’s kind of leveled the playing field … We always own the occupancy in every market that we’re in.”
But still, a loose, brand-style affiliation to tout the individuality and personality of each hotel in the Noble House portfolio might be in the cards, he said.
“We feel like we’re getting to a point where it’s appropriate to start to build a brand.”