New Castle Hotels & Resorts is growing at a rapid pace, with plans to double its portfolio by 2020. COO Gerry Chase recently sat down with LODGING to discuss the company’s expansion and how leading industry concerns impact his business.
New Castle Hotels & Resorts has big plans for expansion. Can you describe the company’s current growth strategy?
I don’t think it’s a current strategy; I think it’s been a long ongoing strategy. The company is 35 years old, and we’ve been a very diversified company almost since the beginning. We are opportunistic; we have gone through four recessions, and five counting the Great Recession. A lot of those skills that we developed during those periods of time are what we are applying now. We are better positioned right now and we are ready to boot the company up on double size in the next five years. We have projects in the pipeline to support that endeavor, and we put a fund together to help us see that growth. We are very knowledgeable on how to use our skill set, whether it is food and beverage, sales and marketing, or revenue management. We are able to apply those skills for third-party management as well as investment and ownership.
Are you approaching things differently knowing that many experts in the industry are forecasting a downturn?
I’m not so fearful of the downturn, especially in our industry. If you look at our industry, we haven’t had a fast recovery as far as the general economy, yet our industry is showing some really dynamic strong periods of growth over the last five years. If anything right now, our industry is in more of a hold pattern, with less growth over the last five years. I think the election has a lot to do with it—a lot of times, when you have uncertainty, you have a little less growth.
I don’t think we’re in a falling pattern or heading toward a recession. Our industry is positioned well to continue to build, continue to acquire, and more importantly, continue to be a third-party management to add value during those periods of time.
How will the recently introduced overtime rule impact your business?
We’ll adapt, but it doesn’t help the people who want to be developed, want to grow, and want to have opportunities. It really is going to restrict that opportunity, because we are not going to be able to add those hours or overtime pay because of economics. We’re not going to be able to charge more for our guestrooms because we have overtime ruling; time will tell if that theory is proved. I believe it will restrict some growth of entrepreneur individuals, and it’s tragic.
What do you make of the direct booking push many top players in the industry have become involved with?
Pure and simple: Direct booking is less expensive for the industry than the distribution channels outside of direct booking. It is better for the guest because they have a more true, honest communication with the end supplier, matching up their needs better than an outside source.