Jarrad Evans, chief investment officer, and Chris Green, divisional president, both of Remington Hotels, recently discussed changes afoot at the hotel management company, which increased its size by 25 percent with its April acquisition of Chesapeake Hospitality, where Green had been president and CEO. When the two spoke to LODGING, they said the integration of their companies was progressing relatively smoothly. They made clear that their expansion via this acquisition brought together compatible visions and resources that benefitted both. They also noted their commitment to thoughtful growth, being responsive to their clients, and how being a public company frees them from pressures to “chase a liquidity event,” thus enabling them to grow in a way that best balances the significant advantages of scale with their commitment to staff and owners.
In what ways has Remington’s acquisition of Chesapeake Hospitality most dramatically impacted the company?
Green: The most obvious way is the increase in size from 90 to 120 hotels, with the addition of 30 hotels all at one time; if you add in the five new contracts done this year, that’s an even more significant amount of growth. However, we’re not looking to become the largest management company. We’re after strategic, thoughtful growth in segments where we really perform, including upper-scale, full-service, luxury, and independent properties. Ultimately, it’s not about the number of deals; it’s about the quality of deals and the capital partners involved in each deal that will drive our success. We’re looking for the right hotels with the right resources and partners. We’re in a good position to do this because we’re not chasing a liquidity event to get to a certain valuation to go public and exit. We’re already held by a public company.
Evans: It’s been a great merger of likeminded organizations with compatible strengths. We’ve been working really hard to make sure that that integration goes as smoothly as possible, so, although not everything is always perfect, it’s gone very well. The considerations Chris [Green] mentions were significant factors in our decision to add these five new contracts, including one with a Crown Plaza at the San Antonio airport.
How do you create the kind of strong relationships you mention?
Green: To a great extent, at its core, this is a relationship business built on trust. People who know Jarrad [Evans] and I can be sure we’re good for our word. If I shake an owner’s hand and tell them, “We’re going to do this for your asset,” we’re going to do it, at any and all cost. That’s how both Chesapeake Hospitality and Remington were built over the years.
Evans: At the end of the day, it’s time and attention with key senior leaders of the company, so we take care to know all our owners, all our GMs. We have 265 associates for 120 hotels. This is not just what we aspire to; it’s what our publicly traded parent company demands. So, to serve our owners best, we strive to strike the right balance between size—e.g., opportunities for employee career growth and purchasing economies—and accessibility; we don’t want to be so big that owners become lost in the sea of hotels.
What does that balance entail?
Evans: Just like we don’t seek growth for its own sake, we don’t seek scale to the point of mediocrity. Right now, we’re large enough to deliver the top-tier rebates and purchasing incentives through our group purchasing organization partner and have the ability to control a lot that goes on in our benefit plans for our associates.
Green: We can also offer the efficiencies found in our proprietary property management system called REMi, which quickly brings together all the informational platforms operators need to succeed. With this dashboard, I can see what happened yesterday at every one of our 120 hotels, and provide actionable data. When this tool is properly deployed, it gives operators time back by handling much of the paperwork these people who love people usually dislike and have little time for. It improves efficiency 10-fold.
We are also able to offer greater efficiency in F&B with Remington Culinary, which enables us to optimize labor, something that continues to be in short supply and the food and beverage experience for guests.
What was the genesis of Remington Culinary and how does it work in practice?
Evans: The need to adapt to COVID—mainly staff and supply shortages—has driven a greater focus on efficiency. Food and beverage, which has been so important in our lifestyle hotels, has been the biggest challenge throughout the pandemic from a margin standpoint. With Remington Culinary, Richard Garcia, our senior vice president of food and beverage, has rolled out a core menu that can be deployed at every F&B outlet. He works with a high-level Michelin-Star-run company called Cuisine Solutions that provide this menu, meaning we don’t have to have a full-blown chef on property to deliver chef-quality plates. This is a highly efficient way to provide food—getting it from the kitchen to the table with fewer employees, so we’re less dependent on staff.
It’s been tremendously successful in two regards—first is the cost savings benefit while still providing with good food service delivery; secondarily, it’s very scalable. This doesn’t mean it’s the exact same menu in every location; every property can put its unique spin on it. This model is already being implemented in existing hotels through renovation and can be created ground up in new ones.
Green: To clarify how the menu can be customized by a market within this model, here’s how it works: There’s centralized sourcing, which is very controlled, but we do allow freedom to add to the center of the plate for the food. Similarly, there’s a strict beverage model, but additives can vary based on data that lets us know what is and isn’t moving around the country. So, there are center-of-the-plate staples, like salmon and steaks, but the tenderloin in Detroit might be served with more of a potato side, whereas in South Beach, it might be served with couscous and broccolini.
With this model, one experienced cook can put out dinner for 100 people, whereas in the old days, we would have five or six people on the line prepping, not to mention all the staff it took to plate it; and, according to blind testing, you can’t tell the difference.
As for the success of this program, in its first year, data based on 71 hotels on the platform show ticket averages that are about 13 percent higher than they were before, and profits that are 7 percent higher at the bottom line.