We don’t have that many tycoons. Hotels aren’t tech ventures: the returns on a good one are steady over years, but not quite as high. Only in my wildest dreams can I imagine ever owning a bunch of them outright.
Even Conrad Hilton and Bill Marriott expanded using outside investors, and Hilton and Marriott both came to follow more of a management company rather than ownership model. (Hilton brought cost accounting to it. Marriott brought a formula that had worked for some time for shopping centers and malls: build a hotel, then immediately turn around and sell it, but retain the management contract. You control the hotel, but you have others’ capital tied up in it, not your own . . .)
Even innovators are rare, and it’s not something most risk-adverse hotel financing models encourage, but we have a few of those show themselves from time to time.
As far as individuals go, the two to whom I would give the most credit would be the late Alex Calderwood of Ace Hotels, and Chip Conley of Joie de Vivre. Each started out with a single hotel, that was old, run down, in a somewhat challenging location, and had been given up on by previous owners; and using limited resources, turned it into something not only impeccable and unique, but in doing so, created a concept as well, that they were able to use in more and more hotels as they expanded.
JDV focused on a unique identity and unique ambiance for each location — at one time, if you were traveling to the San Francisco area you could, when you booked a room, complete a multiple-choice quiz and tell them a little about yourself, and they’d ‘match’ you up with a hotel that would align with your personality. You could tell they were operated by the same company, and could count on the same high standards, but each one was truly unique.
Ace Hotels are Ace Hotels — they all operate under the same brand, like a chain — and they’re very edgy, lifestyle hotels. There are common threads, common amenities, common management practices, common features that run through them. But it’s not Hotel Indigo or aloft: you don’t check into several, one after the other, and each time, get that “I’ve seen this stuff before” feeling. Each one of those is a work of art, even though they’re obviously by the same artists.
I’d like to see more guys (or ladies) like that in this business. Even if your idea is for a chain, make it something workable, and new . . .
Originally appeared on Quora
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