Officials with Trust Hospitality said they’re not beholden to hotel industry “myth” in their efforts to grow their business.
NEW YORK—Officials with Trust Hospitality aren’t painting themselves into a corner when it comes to looking for opportunities for growth.
The company is looking across a wide array of geographies and segments in growing its management platform, said Chairman and CEO Richard Millard.
He said the company is enjoying a period of growth, with the recent opening of the independent Stella Hotel in College Station, Texas, and more openings planned in Florida, New York and Canada. In 2018, the company is planning significant growth in the Caribbean with properties in Trinidad, Haiti, Antigua and the Dominican Republic.
In an interview with Hotel News Now at the NYU International Hospitality Industry Investment Conference, Millard pointed to Trust’s resistance to some industry trends as one reason why the company has enjoyed success over its 25 years of existence and why executives have been able to carve their own path in terms of operations.
“We’re not believers in a lot of the hotel myths out there,” Millard said. “We don’t think all the baby boomers are dying. They’re still alive, so we’re not just marketing to millennials. We believe more in the millennial state of mind, but that doesn’t have to do with how old you are.”
Unique branded properties
While the company’s portfolio exists largely in the boutique space, with both independent and soft-branded properties, officials said they’re also open to more traditional branded properties when the deal makes sense.
One such property in the works is a new Tru by Hilton in Orlando, Florida, which Millard said differs greatly from the Tru protoype in terms of size. That property will have 290 rooms and will be located near the city’s convention center.
“We think it will be quite interesting,” he said. “I think the brand is very interesting, especially from a cost standpoint. It’s a 21st century hotel, I think.”
Another Florida property in the works is an Even Hotel near the airport in Miami, which Millard said falls in line with his company’s focus on wellness.
Regions for growth
Michael Register, partner and VP of development, said Trust has identified South America as a region that has potential for great growth, but the current political climate—both in the U.S. and the various countries of South America—and the current strength of the U.S. dollar aren’t helping matters.
“It’s tough in the sense because they’re different markets, and it’s a different culture,” he said. “The way they perceive professional services is different than the United States once you get further south than Mexico. They put less emphasis on professional services and their value.”
The company currently has a presence across the Americas.
Register said one thing that hinders the growth of any third-party manager in South America is an overall lack of liquidity.
“There’s not a lot of trading of assets,” he said. “You’ve got a lot of wealth concentration in these countries, and if you have someone trying to buy hotels, you ask (current owners) ‘Would you want to sell your hotel?’ and they say, ‘What would I do with the money?’”
Without those transactions, it’s harder for an outside operator to find deals.
“When there’s change in the market, there’s opportunity,” he said. “It’s kind of a static market. Then you throw on top of that some of them have pretty serious political situations. Brazil, for example, is going through tremendous political turmoil.”
Even with all those headwinds, Trust is better poised to succeed in the region than some other hotel operators, Register said.
“We’re a privately owned company, and we’re not under pressure to make earnings on a quarter-by-quarter basis, and we look at it as a long-term play,” he said. “All those things I said are true, but it makes the barriers to entry higher. We’re already there operating, so we have a competitive advantage over anyone else who may want to enter the market.”