You could say CoralTree Hospitality Group is taking the ‘road less traveled’ when it comes to carving its niche as a hotel management company as it continues to build a portfolio of unique, independent resorts.
The Greenwood Village, CO-based company was launched earlier this year following the sale of Two Roads Hospitality and its five boutique brands--which included Destination Hotels and Joie de Vivre--to Hyatt in December of 2018. CoralTree is a wholly-owned subsidiary of Lowe, a national real estate investor, developer and manager, which was previously the majority owner of Two Roads Hospitality.
Thomas Luersen--who was a 20-year veteran of Lowe, Destination Hotels and Two Roads Hospitality--is leading CoralTree as president. Luersen described both CoralTree, and parent company Lowe, as being “interested in a fully integrated real estate model that acquires properties, resorts specifically, and develops, entitles and operates.”
While the aforementioned brands were part of the sale of Two Roads Hospitality some of the real estate was not, and as such, represented a good portion of CoralTree’s initial portfolio, which now includes 15 lifestyle hotels and resorts.
Luersen further elaborated on the mission of CoralTree, pointing out that while the company is a “brand-approved manager” its focus will be primarily on less conventional properties. “Our long-term plan is to establish ourselves as a management company known for its expertise in the resort space and for managing urban-centric hotels that have a unique identity,” he said.
Luersen highlighted the company’s hands-on approach as a key point of differentiation, particularly in light of the wave of consolidation that’s taken place throughout the industry and created larger operating companies.
“What we’re selling is we’re going to have a personal relationship with those that are managing the business and managing the property. They’re not two different functions, which is what it has become. We think we’re getting an immediate impact from that and there is a unique opportunity in terms of our growth,” he said.
He reinforced the point by pointing out that CoralTree has built a robust pipeline of nearly a dozen projects as word of mouth spreads. “That’s without reaching out for growth. The owners are calling us and saying ‘we’ve heard about your model, we know who you are, and we want to do business with you.’ That’s because of this nimbleness and our agility to work directly with the owner,” said Luersen.
The most recent addition to the portfolio is Vivo Resorts in Puerto Escondido, Mexico. In addition, a couple of properties in development include The Eddy in Golden, CO and Ptarmigan Inn in Steamboat Springs, CO.
Despite its rapid early growth, Luersen maintains modest expectations for the company in terms of numbers, noting that ideally he sees overall revenue in the $600 million to $700 million range and compiling a team of roughly 7,000 employees.
“At this point in time we’re only as good as the team that we can assemble so we don’t have aspirations of getting back to 100 properties like we were with Two Roads. We generally want to be in that 25- to 30-property range. We’re more about strategic growth, finding the right opportunity and we’re very relationship driven with our owners,” he said, adding the company is currently asset managing three properties as further evidence of its ability to “think like an owner.”