Going Vertical: Thom Geshay on What’s Behind and Ahead for Davidson Hospitality

Davidson Hospitality Group President Thom Geshay says his hospitality management company has big plans afoot, starting with a new name for what was formerly Davidson Hotels & Resorts. This new master brand, he told LODGING, will encompass the following operating verticals: Davidson Hotels, which is focused on heritage brands, including Hilton, Marriott, and Hyatt; Davidson Resorts, geared toward large-scale, seasonal properties with multiple food and beverage outlets, retail, and leisure activities like golf, spas, and skiing; Pivot, a lifestyle property launched in 2016; and Davidson Restaurant Group, dedicated to food and beverage. Geshay also shared thoughts on the industry and his company’s growth plan, supported by a newly launched global sales office (GSO).

How is this rebrand of your company evolving?

This plan was in the works long before the pandemic when we developed a plan to put in distinct operating verticals to focus on different areas, partly because of changes in our portfolio. For 50 years, we had focused on larger, more complicated properties, but, especially since adding our lifestyle vehicle Pivot in 2016 and resort division just this past January, we found we needed different resources. We saw this division into verticals as a way to be more hands-on, like a smaller organization, even as we continue to grow.

Why did you launch your global sales office (GSO), and how is it working out?

One of the things we learned working with independent properties is that they don’t have a brand distribution system or brand recognition driving sales the way the brands do. So, although we always had an above-property sales apparatus whereby the corporate office oversaw sales and marketing, we needed property-level, independent resources as we moved into the independent property space to help get big corporate group booking organizations to know our portfolio in a more effective way. As we saw it, creating a global sales organization was the most effective and efficient way for us, as a third-party operator, to drive that business to the properties.

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We’re seeing some real success using this commission-based model in which the GSO is selling on behalf of our owners across the whole platform of properties. We see it as a low-cost but effective way to get business into our properties.

What kind of activity are you seeing in group business?

The group business is starting to gain momentum, but corporate business hasn’t yet materialized in a significant way, even with booking windows place further out. However, there are fewer cancellations. Mostly what we’re seeing are leisure events, like weddings, that couldn’t be held as originally planned in 2020. There has also been a trend toward vow renewals or receptions for those who chose to marry anyhow in 2020. Things are a little better on the association side, where they are starting to again hold meetings with at least some face-to-face meeting elements.

How has your portfolio been performing overall?

Overall performance is much like what I mentioned about groups—it’s still mostly leisure-driven. While it is growing month over month, it is by no means even. Our drive-to leisure locations are really crushing it—some with over 95 percent occupancy and higher room rate—and thereby boosting our overall performance, but most urban hotel groups are still struggling.

How has your company been impacted by the labor shortage since the pandemic?

On the property level, we don’t have the staff we need to clean rooms and staff all the bars and restaurants. No matter how technology advances, this business is still driven by people, and we lost a lot of awesome people who were displaced by layoffs and furloughs for a variety of reasons, including to other industries.

Trying to attract them back at the property level is proving very difficult. We have a great diverse base of employees, and the industry still offers enormous opportunities for growth. To recruit, retain, and develop the talent we need, we’ve built out a whole training and development team, one we have refined to on retention almost as much as recruitment, so that base stays and grows.

One thing we did right on the corporate side was that we kept our whole team together because, unlike many third-party managers who reduced staff for liquidity purposes, we played the long game; we not only didn’t reduce staff, we added some of the talent others let go in 2020, because we saw it as an opportunity to bolster our team a little bit, to dig in and help all our owners and associates.

What sort of conversations have you been having with your owners?

This period has really demonstrated the power of relationships in our industry, which may seem big, but is actually quite small. Never before have I seen such cooperation between brands, lenders, builders, and operators. Initially, our discussions were mostly about how to keep everyone safe. Now, we’re talking more about how to come out stronger—discussing different staff, expense, and growth models for individual assets, so we can thoughtfully bring them back once the market returns. Also, now that the pace of transactions has picked up, we are talking with owners who want to sell about how to do so in this more favorable environment.

So, as you’re looking forward, what is your outlook for the industry?

I’m actually really encouraged. This is not like the Great Recession, which was caused by fundamental issues in our economy. Mainly vaccinated people with pent-up desire to have new experiences and built-up savings to spend on travel are driving the leisure market in a big way.

We’ve learned a lot during this time and made some changes that are here to stay. Even as we deal with challenges posed by the cost and shortage of labor, we have also discovered some efficiencies and will continue to meet guest expectations and follow public health guidelines.

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