At 18 years old, Steve Belmonte became the youngest general manager in the history of Holiday Inn, running a hotel at the Chicago O’Hare Airport. From there, he continued his rapid progression up the ladder, with major career milestones ranging from launching his own hotel management company to becoming president and CEO of the Ramada chain from 1991 to 2002. Belmonte enjoys building things from the ground up, so it comes as no surprise that the restless entrepreneur went on to launch two more companies, Hospitality Solutions and Vimana Franchise Systems, the parent company of the Centerstone Hotels and Key West Inns brands. After 45 years in the industry, Belmonte looks back on his career and takes a glimpse into the future.
What inspired you to start your first company? I was a regional director overseeing four or five Holiday Inns in the Midwest. The gentleman I worked for, Jim Schwartz, was putting the Holiday Inn O’Hare Airport up for sale. I had contacted a couple of guys from Little Rock, Ark., who I had made some investments with to see if they were interested in buying it. They flew out, I presented my plan, and the three of us bought that hotel. I gave it a nice renovation, threw a flag on it, operated it for six months, and sold it for a million bucks more than we paid for it. From there, we took a little bit of the money, and I launched a company called the Equity Hotel Corporation. I started with a hotel in Burlington, Iowa, and we grew to be one of the top 10 management companies in the nation.
How did you land the CEO job with Ramada? After eight years running Equity Hotel Corporation, I got to know a guy by the name of Henry Silverman. He reached out and said he was buying the Ramada brand out of bankruptcy, and asked if I would consider joining. The company was called HFS (Hospitality Franchise Systems), once we got the Howard Johnson brand. Then we added Days Inn. Ramada had 411 hotels when I took over, and we had 1,117 domestically when I left.
What did you do next? I thought I would retire, and that lasted two weeks before I got bored. So I started a company called Hospitality Solutions in 2002, which helps franchisees deal with terminations. I turned it over to my son about three years ago, and he’s doing better than I did with it, because he’s young and he’s more tolerant.
In that process, when did you launch Vimana? Once I turned the company over to my son, I decided I really wanted to get back into the hotel business and create a true franchise-friendly brand. My feeling is, if I’m treating people fairly, I’m delivering heads in beds, and if I’m doing it more cost-effective than the competition, why would they leave? Rather than tie people in long-term, we do rolling three-year windows. Our franchisee fees are 3 percent of gross rooms revenue, as opposed to an average fee of 12 to 14 percent that franchisors charge. We don’t markup reservations. We have a preferred vendor network, but we will never mandate a vendor. It’s all focused on eliminating these annoying components that franchisees dislike. Now, we have about 45 hotels, and I’ve got seven deals in the pipeline that will close. Without a franchise sales force, I’m proud of that.
If you could pick any gig you wanted in the industry right now, what would it be? I would like to revive a brand that has no passion, no leadership, and no DNA. There are brands in the mid-tier and luxury segments that can easily be revived with some passion, planning, fun, leadership, and out-of-the-box thinking.
