In June 2017, Alex Tisch joined Loews Hotels & Co. as executive vice president of commercial and business development. But this wasn’t his introduction to the company—Tisch has been with Loews Corp, of which Loews Hotels is a subsidiary, for more than 10 years. He now serves as vice president of the company in addition to his executive role in commercial and business development. In these roles, Tisch has watched the company thrive in an extended lodging cycle. LODGING spoke with Tisch at the 2018 Americas Lodging Investment Summit about the company’s development and growth strategies and where Loews plans on moving next.
This is your first ALIS. How has it been treating you so far?
Well, my schedule is packed! That is absolutely a good thing. And the mood is generally optimistic; the cycle end that everyone’s been talking about for the last five years seems to be lasting longer than expected, and people are enjoying it. Our strategy is different than others in the industry and we’ve already closed on a number of deals.
You joined Loews Hotels & Co. less than a year ago. What approach are you bringing to the position?
Really, to keep doing what we do best. It’s the year of embracing the owner/operator strategy, which is something we’ve been doing for years. We also hold on to assets long term, which really resonates in certain markets. For example, we recently announced an 800-key, $328 million transaction and partnership with Kansas City. We used the same strategy in Miami Beach and Philadelphia 20 to 25 years ago and we still own those hotels. The project is enormous—we’ve already created 2,000 jobs. Many cities don’t really want to welcome new asset owners because, typically, they’ll be gone in five years. They may flip the property and make the city look bad. We don’t want to do that, and building a portfolio of longstanding, legacy properties has helped us build our brand and find further growth.
A lot of developers are interested in Kansas City right now. Why is it such an attractive market?
When we looked at the city, we were attracted to the Sprint Center, an 800,000 sq. ft. convention center in a beautiful, state-of-the-art building. It just didn’t have a hotel associated with it. This meant it was unable to compete for meetings contracts, which went to cities like Austin, Nashville, and Indianapolis that have hotels associated with their convention centers. So, we put in a bid and were successful. The city is our partner, and we mesh because once the hotel is built, it can market the convention center and, in turn, the convention center can market the hotel. The last hotel in Kansas City of this stature and size was built in 1985. A great city needs a great hotel.
Also, the owner/operator model makes us more attractive for projects like this. People work with us because they want someone who will stay in the city for a while. One of our biggest growth avenues is creating long-term partnerships with cities that want a long-term partner.
What are some of Loews Hotels & Co.’s other growth avenues?
Beyond creating long-term partnerships with cities, we also tend to look for markets with big demand generators, like amusement parks or sports franchises. We have a campus tied to Universal Studios in Orlando, Fla., and we’re in the middle of a 300-key deal in Arlington, Texas. The hotel will be right between Globe Life Park, where the Texas Rangers play, and AT&T Stadium, which is home of the Dallas Cowboys. Similar to Kansas City, the last hotel built there was in the 1980s. There’s also a lot of demand generators, even beyond the sports teams. It’s close to the largest Six Flags in the world. We also have the Texas Rangers as our equity partner, which is helping us book a lot more rooms direct, rather than through an OTA.
What is it like partnering with a city or a sports team? I’m sure that colors how you approach a project.
It’s both remarkably time consuming and remarkably rewarding. We allocate as much time as we need because for us, the earnings come from learning how to best manage each asset. It’s much more complex, but the returns are a lot higher.
Although we do have brand standards, we also have the flexibility to embrace the locale. In a place like Kansas City, you want something with local flavor; if the brand standards are too much, it’s harder then if you were willing to work with the city. People really embrace that about us.
You have a small team compared to many of your competitors. How do you become experts in so many markets so quickly?
The firm works really well together because, frankly, everyone has bought into our strategy and wants to work on our new, exciting projects. The exciting part is that people like growth by nature. But on any given day, we could ruin our reputation and have our capital source taken away. We take that very seriously, and our team realizes we won’t be able to grow if we don’t operate all of our hotels properly. I’m leaving here very comfortable with our strategy and with doing something different—there’s nothing wrong with being different. In the long run, it’s going to benefit us.