Auberge Resorts Collection’s Craig Reid has helped take the company from small beginnings to one with a thoughtfully curated portfolio.
MILL VALLEY, California—For Craig Reid, president and CEO of Auberge Resorts Collection, the goal right out of the gate was clear: to create a portfolio of one-of-a-kind properties with a sense of individuality.
That path, however, wasn’t always easy.
Reid joined the luxury boutique development, ownership and operating company in 2013 from Four Seasons Hotels and Resorts and approached Auberge through the eye of a developer with a strong vision, he said.
Though Auberge had a “great halo and reputation” that resonated well with the consumer, he said the company had a questionable reputation with the investment community and an up and down relationship with employees because of inconsistent growth.
“We had to strengthen the team, bring a bit more rigor in how we managed things,” while continuing to protect, preserve and grow the reputation with customers, he said.
He said that rehab work was done in close coordination with Dan Friedkin, majority owner and chairman of Auberge and chairman and CEO of The Friedkin Group. Reid said there were two pivotal ingredients responsible for why the company successfully moved forward.
“First and foremost, the vision and strategy that Dan helped me shape. Secondly, the quality of talent that we assembled,” he said.
Auberge needed people who were comfortable working in a smaller business and running smaller hotels (about 50 to 70 rooms). He noted the management style with his company is very different from larger companies. It’s more upfront rather than working from behind the scenes.
“I think a lot of people like what we’re doing, they like the … more crafted experience that we’re offering. There’s a certain amount of fatigue with the larger companies,” he said.
The company, which was founded by Mark Harmon in 1998, now has 19 hotels and resorts across three continents and a handful under development.
Reid said there are a certain amount of affluent travelers who are looking for more bespoke experiences and much of Auberge’s early concentration was on the West Coast. The company desired more.
“Ultimately, what we’re trying to do is … provide experiences for our guests and future guests, and we’re trying to give them options,” he said. “Once you build loyalty and a relationship, it’s great to provide that same guest more opportunities.”
Upon taking on his role, Reid immediately targeted East Coast growth as a priority. Development of new Auberge properties can take anywhere between five and 10 years, he said. It can cost $1 million per key to build, so looking for a portfolio to acquire management of was something that could give the company a steady increase in presence, he said.
In 2018, Auberge added Grace Hotels under its collection through a strategic partnership with Grace’s owners, Libra Group. Though the scale of the acquisition was small, the opening of geographies was meaningful, he said.
“What Grace allowed us to do is have a foothold in the North East … and then also small foothold in Europe,” he said. “…We really welcomed that sort of strategic move as part of a positive move—one that’s sort of helping us move forward in a way that’s positive for our guests and also for our employees.”
Right now, he said the company’s focus is in the Americas, but that has shifted slightly with the Grace acquisition to both Europe and Africa. He said the team has increasingly spent more time in both of those geographic locations to create a strong thread of properties there.
Reid said Auberge isn’t looking to grow for growth’s sake. It’s more about the quality of the portfolio, which he never wants to dilute. The challenge with portfolio acquisitions is there are few compatible portfolios out there, he said.
“Grace happened to be very compatible,” and if Auberge were to look for other portfolios to acquire, he would be very selective, he said. If the right portfolio was there, he said he would be “extremely interested.”
For a property or portfolio to be compatible with Auberge, it needs to have a great sense of individualism, satisfy expectations of discerning guests and be in a location that would intrigue its guests, he said.
He said Auberge is also doing conversions. One recent example is the Madeline Hotel & Residences in Telluride, Colorado, which Auberge took over and physically transformed.
Reid said he’s not worried about whether the industry is late in the cycle, because Auberge’s specific niche insulates the company somewhat from those dynamics. He said there’s been so much focus on luxury over the past couple of decades, especially from the brands.
Reid said the benefit of having a smaller company is the level of agility it brings should it need to shift paths.
Reid said the consumer is changing, and he’s noticing a large emphasis on individualism driven by the consumer rather than driven by the service provider. He likened it to the shift in consumers’ preferences in coffee, from chains to more bespoke local coffee options.
“The consumer is now much more in charge of their experience, and you have to be very agile and tuned in,” he said. “We believe that’s what’s happened in this process, is there are lots of different appetites, lots of different flavors, so what we’ve focused on is the consumer that’s looking for a greater sense of individualism and a form of luxury that is unpretentious”
In a way, he said consumers are the single biggest disruptor. He said they no longer will rely on third-party rating systems, they “will rate you themselves; a positive experience spreads like wildfire, a negative experience spreads like wildfire.”
He said reputation is also built on what a company has, and Auberge mostly had resorts. The company is now making a breakthrough, he said, and making its own investments into more urban, city locations.
Properties in the pipeline that Reid is excited for include one in Austin, Texas, coming in 2020, a property in Guacalito, Nicaragua, in 2020 and a one in Punta de Mita, Mexico, in 2021, among others.
He said he’s very pleased with Auberge’s scale today, and his mission is to be the “best loved operator of one of a kind properties.”
“If it means that journey to that objective continues to provide growth then so be it, and if it means that we have to slow growth down to ensure that (we) really achieve quality levels, that will be it,” he said.
In addition, he and Friedkin are ensuring they provide excellence that is trusted and admired by investors and team members, he said.
“Our success to date is because of the team, the family, I’m really fortunate to have some great colleagues,” he said. “…The entire team really is the CEO of the company.”