Leigh Hitz, CEO of Stout Street Hospitality, has been with the Denver-based management company since its inception in 1993. As a general manager, she oversaw the renovation and launch of the company’s first hotel inside a vacant, 85-year-old former bank in downtown Denver. She also led the company through a corporate identity change, from Magnolia Hotels to Stout Street, in 2011. Hitz discusses Stout Street’s expansion goals, the state of the boutique and independent hotel segment, and more.
What drew you to the niche market of boutique and independent hotels? It began with the location in Denver back in 1993 and the ability to design and create a hotel how we wanted. Our chairman, Steve Holtze, is a very visionary person, so we are able to work one-on-one with the architects and the design team without barriers. We’re focused on selling an experience versus a process, which allows us to be flexible, creative, and innovative.
How do you align yourself with an owner’s needs? We typically co-invest, with our own equity, and we create a fee structure with owners to make sure their investment model works. We work on incentives with our management contracts, to help align the management company with the ownership. We either own or manage the properties because these boutique hotels are so individualized that once you start creating one, you really need to see the whole process of its life through.
What is your process when taking on a new client? We always do our own research. We visit the area, and look into the dinning and entertainment scene, the type of shopping available, and the hotel’s accessibility to modes of transportation. We are creating experiences, so it’s extremely important to incorporate the surrounding lifestyle within the boutique hotel. When we meet with the owners, we discus their passions, and how we can add local flavor to the property. We want to know if there is a local craft beer they want to showcase, or if they want to incorporate a local artist into the property’s design.
What is the best marketing strategy for a small and independent hotel? It’s about picking a lane and going with the program. You can’t be everything to everyone, so you need to understand who your customer is, and what feeder markets are coming to that particular city. We look for behavior based on the feeder demographics, which allows us to optimize to our target audience. We analyze our leisure market, and decide what compelling experiences will resonate the most with that market. We also pitch and market the local businesses to pull in additional revenue.
Where do you see this sector of the industry growing most in 2016? With all of the mergers happening, we’ve been talking about this a lot lately. When Starwood and Marriott merge, they will create these mega-flagship hotels but they also have branded boutique hotels within their portfolios. Their reach will be bigger, which is one philosophy that is coming out of this. The other is what is going to happen with the big brands that are creating soft brands. How does a small, independent hotel compete with a new, well-known branded hotel so close in proximity? There are always opportunities to play in that world, and you have to think ahead about how you can operate and gain share with those two things occurring. Independents can do this through building a stronger brand and marketing strategy.