With 50 years under its belt, the Portland, Maine-based Olympia Companies is focused on creating growth opportunities for both its portfolio of luxury independents and branded select-service hotels and its employees.
PHOENIX—The Olympia Companies celebrates 50 years in business this year, and as it plans its future growth strategy, Chief Growth Officer John Schultzel said the company wants growth opportunities on two fronts—for its business and for its associates.
“Our growth is fueled by reputation and relationships,” he said. “We’ve never been particularly outward-focused in our efforts to grow the company, so our effort is to have a deeper and broader reach. Now we’re committed to creating growth in our practice and also growth opportunities for our associates. We can’t retain them if we don’t show them a path forward.”
Portfolio and growth strategy
The Portland, Maine-based Olympia Companies today has 24 hotels open, including six independents. Its branded portfolio is primarily select-service brands from Marriott International, Hilton and InterContinental Hotels Group. Its independent portfolio includes many full-service hotels on university campuses.
“One of the things I love about Olympia is we have a Howard Johnson and a Microtel, up through Residence Inn and Hyatt Place,” Shultzel said. “We’re doing best-in-class in select service and then some of the best luxury independent hotels.”
Approximately 60% of Olympia’s business is third-party management, and they own controlling interests in about 40% of their portfolio.
This past summer, the company picked up some additional management contracts, including those for the Hyatt Place Harrisonburg in Harrisonburg, Virginia, under development by Harman Realty and scheduled for a September 2020 opening. The company also struck an operating partnership with Mountain Shore Properties, which includes assuming management of three Mountain Shore Properties hotels: The Hyatt House Mount Pleasant-Midtown in Mount Pleasant, South Carolina; the Residence Inn Charlottesville Downtown in Charlottesville, Virginia; and Hampton Inn & Suites Tallahassee Capitol-University in Tallahassee, Florida.
When it comes to growth, Shultzel said the company is looking at geographic expansion, but in a controlled way.
“We’re agnostic in regards to location and brand because we can execute at all levels,” he said. “The goal is to spread west. Our aspiration is to be a nationally-known company, and we won’t do that by staying on one side of the Mississippi.”
Schultzel said the company plans on “three to five highly managed, highly integrated transactions a year that allow us to grow consistently with our vision and values.”
Olympia’s independent portfolio adds a lot to the company’s strength in diversity, Schultzel said.
“Our skill and ability in the independent space makes us unique and we’re leveraging that,” he said.
Many of the company’s independent hotels are in university towns, including The Hotel at Oberlin on the campus of Oberlin College in Ohio and The Inn at Swarthmore on the campus of Swarthmore College in Pennsylvania.
On college campuses, often the company works for the college, which is the property owner. Other times, Olympia seeks private development in the form of a ground lease or fee-simple interest.
Schultzel said it’s an interesting time to be developing and managing hotels, but with plenty of opportunity.
“From a (revenue per available room) and development cycle perspective, we’re at an inflection point,” he said. “Profits are declining (industry-wide) so a declining profit trend is imminent.”
“The first chapter of the profitability dialogue revolves around people—it’s finding people and the cost of talent,” he said. “We’ve always been focused on culture and retention because we don’t want to have to go back out and find people. We spend a lot of the employee relationship because the best thing is to keep the people you have, but there’s a tremendous amount of wage pressure that comes with that.”