Published September 2005

Hotel Group: Price tag
can’t be placed
on employee courtesy

Rendering courtesy of The Hotel Group The Hotel Group recently finished its largest renovation project ever, a $6 million-plus remodel of the Doubletree Hotel Norwalk in Norwalk, Conn., President Doug Dreher said. The project included an upgraded exterior and interior for its 265 guestrooms as well as its 6,800 square feet of meeting space to serve the corporate market.

By Kimberly Hilden
SCBJ Assistant Editor

While walking down a corridor in the Courtyard by Marriott in Richland, Wash., Doug Dreher took note of a subtle courtesy bestowed upon him by one of the hotel staff.

The staff member, vacuuming in the hallway, turned off the vacuum when she saw that Dreher was talking on his cell phone — and kept it off until he had passed, allowing him to continue his phone conversation without interruption.

For Dreher, the experience was especially gratifying because it happened in a hotel that his company, The Hotel Group, manages.

“It’s just a little anecdote of what I think is out there at our properties. You can’t put a price tag on it, and it doesn’t cost us anything more,” said Dreher, president of the Edmonds-based hotel management and investment firm.

That commitment to service is practiced by each of the 1,600 associates who work in one of the 30 facilities that The Hotel Group either owns or manages and is encapsulated in a set of actions known as “The Key Three”: acknowledge and smile, anticipate and deliver, sincerely thank.

“I don’t care if you’re (working) at a Hilton, a three-diamond hotel or a two-diamond hotel, you can do those ‘Key Three,’” Dreher said.

Customers will notice, tell their family and friends, and continue to propel The Hotel Group toward success — success that has led to “euphoric growth” in the past few years, noted Dreher, who has been with the company since 1989.

“We currently have 30 properties, including two under construction and one under development. Three to four are being worked on, with four more in the pipeline,” the longtime Edmonds resident said.

Since 2000, The Hotel Group, led by chief executive Edmond Lee, has had a hand in opening 14 hotels across the country, has bought five and sold four, expanded two properties and completed five multi-million dollar renovations, Dreher said.

The 21-year-old company recently finished its largest renovation project ever, a $6 million-plus “shut and gut” of the Doubletree Hotel Norwalk in Norwalk, Conn., a property the company purchased in November, Dreher said.

Completed earlier this summer, the remodel included an upgraded exterior and interior for its 265 guestrooms as well as its 6,800 square feet of meeting space to serve the corporate market. Now a full-service facility, the hotel includes a restaurant, lounge, room service, complimentary high-speed wireless Internet and a business center.

Also this year, The Hotel Group purchased the Sheraton Denver Tech Center in Greenwood Village, Colo., and proceeded to renovate its 263 guest rooms as well as reallocate space in the lobby and establish an on-site restaurant.

Both hotel purchases stemmed from the establishment of a $20 million property investment fund, Dreher said.

“We’ve kind of earned the right to ask for people’s money. We have had two opportunity funds, raising $33 million. Our track record is (on average), a 53.5 percent internal rate of return. We’ve never lost money on a hotel,” he said.

To keep that track record going strong, the company is selective in its purchases, Dreher said. “We’re cherry pickers. You have to be patient. Sometimes, the best deal you do is the deal you don’t do.”

While The Hotel Group prefers to buy distressed properties to refurbish and reposition in the market, company officials consider a number of factors in deciding to buy, including:

• The room revenue multiplier.
• Market resale opportunities.
•  Whether the hotel carries a “power brand” such as Hilton, Marriott, Sheraton and Radisson, among others.
• The position of the seller.

These along with eight other factors make up the “Tremendous 12,” and though it is rare to find a deal that meets all 12, “we try to get at least nine,” Dreher said.

The company is just as selective when it comes to its employees, with Dreher personally interviewing every hotel general manager before he or she is hired, and the general managers interviewing each of their hotel’s employees before making the hire.

That effort creates a team of people with shared drive, courtesy and vision. It also builds a family atmosphere. It’s an atmosphere Dreher and the rest of The Hotel Group’s executive team will take care to nurture as the company continues to grow.

“There’s a risk for us getting too big,” he said, noting that when the number of properties gets into the 40s, “you lose intimacy.”

For now, the company is looking to be “north of 32” properties by the end of the year, with revenue expected to hit $80 million.

“There aren’t many hotel companies our size that can match our growth,” Dreher said. “Of the 30, we own six, and one of the goals is to continue growing our assets.”

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