During his college years, Deno Yiankes worked at White Lodging’s first managed hotel, a Holiday Inn in the company’s hometown of Merrillville, Ind. Since rejoining the team in 1990, Yiankes, now president and CEO of the investments and development division, has seen White Lodging grow to operate more than 160 hotels in 20 states. While the company works with a variety of premium-branded, select- and full-service hotels, Yiankes says the growth of Hyatt Place has been especially impressive. Here’s why White Lodging sees Hyatt Place as a solid investment and considers Hyatt Hotels a good business partner.
How many Hyatt-branded properties does White Lodging own and/or manage? We just opened a Hyatt Place that we operate for the Weglarz Company at Midway Airport in Chicago on June 7, so that’s our seventh Hyatt-affiliated project. It has 148 rooms with all the latest and greatest prototype standards and design. We’re also building our first dual-branded Hyatt Place/Hyatt House in downtown Denver, less than a block from the convention center, which will open in November.
What makes Hyatt Place so appealing? We find that it’s getting better each year. We opened our first one in early 2013 when the brand was still in the uptick. The momentum they’ve had since then has been really impressive for us, in terms of their market share growth and pipeline growth. Those are things we look at as we develop more hotels.
Hyatt Place has about 220 hotels and a goal of 300 in three years. If you look at their competitive set, the Hilton Garden Inns, Courtyards, and Hampton Inns of the world, Hyatt Place is only a third of the way there. That cuts both ways. It makes it tougher to be dominant in the market share category when you only have that many properties, but the flipside is, the run room for the next three-to-five years when you’re building new hotels, there are a lot more opportunities.
We also find it’s a very strong product on the weekends. Most of our properties are urban, so the product lends itself to urban travelers, families, or leisure. And we’d like to continue to see the business traveler side increasing during mid-week in terms of their reservation contribution.
What has White Lodging’s experience been working with Hyatt? We’ve been impressed with the senior leadership teams; they’ve been great at listening to not only ours, but other franchisees’ input. The amount of changes for the better that they’ve allowed us to give input on over the last three years has been great. Initially, they were a little less likely to grant us some flexibility, mainly on design and construction-related issues, but they have taken a partnership approach and listened and even adjusted how they get from A to B to accommodate some of the changes that the franchise owner group has requested.
What advice would you give to a hotel industry newbie? The real value is created in the operations side of the business. If you’re a great builder or real estate talent, that helps, but it’s all for naught if you don’t have an operating company that can deliver, day in and day out, great results and great guest experiences. I’d also make sure they were aware of the significant uptick in the last 18 months in construction costs, both on materials and labor. We had about a four-year trend where we were seeing little to no inflationary increases. But in the last 18 months, it’s more than made up for those four years. So it’s highly likely it’s going to cost more than what you think it should cost. That’s assuming you’re in high-growth markets. If you go to some of the more tertiary or suburban markets, it may not be as extreme.
What’s your industry outlook? We’re having a very solid first half of the year, and it’s probably our fifth or sixth consecutive year of solid increases both in terms of top line and profits. We keep looking back and saying, what are we missing? What’s going to cause the hiccup? I don’t generally agree that it’s going to be supply, I think it will be something more geopolitical or global. But we’re not worrying about it; we’re focusing on making hay while we can.
