Last week, Destination Hotels & Resorts (DH&R) announced that it will manage the 296-room Lansdowne Resort in Leesburg, Va. With a 50,000-square-foot conference center, golf courses, spa, aquatic complex, tennis courts, and six food and beverage outlets, the LaSalle Hotel property has many moving parts. Mike Everett, senior vice president of hospitality investments for Destination Hotels & Resorts, says Lansdowne is ideal for the company’s skill set.
This marks the seventh management contract the company has landed since January 2011, and it hopes to announce a new resort and an urban property in the next 60 days or so. “We have a more aggressive growth goal for 2012,” Everett says. “The goal is to exceed what we did in 2011.”
DH&R’s continues to focus on growing its third-party management contract business, but will also concentrate on acquiring hotels. In 2011, Everett says DH&R’s growth was split about 50/50. “We plan on being very active on the acquisition side this year,” he says. “We’ll see how it treats us and how much product is out there.”
Largely focused on the group segment, DH&R tends to pursue hotels with extensive meeting space offerings, Everett says. “Most of our hotels have a fairly significant group and meeting component to them,” he says. DH&R intends to use the strength of its national sales effort to bring incremental demand to Lansdowne on the group side.
The meetings market has been recovering over the last year and a half, but Everett says it’s been more of an ebb and flow. Everett is seeing a lot of upper-upscale resorts, such as Lansdowne or the DH&R-managed Terranea Resort in Southern California, making great strides. Although some markets have rolled back quickly, other aspects of the group side haven’t been as fast to recover, he adds. Some of the training business that the industry did well with in 2004 and 2005 is a little slower to come back, Everett says. DH&R is seeing backlogs continue to grow, and Everett says group room nights are up significantly year-over-year.
DH&R is particularly bullish on where the lodging industry is headed this year in regards to the independent segment, Everett says, adding that independents are much more competitive with their branded counterparts than 10 years ago. Obviously there are various stumbling blocks, such as the financial crisis in Europe, and the presidential election will have some level of impact on the business, but by and large Everett is optimistic. The lack of new hotels in most markets has been very favorable for DH&R, and with a somewhere near stabilized level of occupancy, the company can then push rate more aggressively than it would have a year or two ago. “The lack of new supply markets should be a good boon to rate growth over the next three to four years,” Everett says.