A Formidable Force
Remington Hotels Acquires Chesapeake To Create Powerful Management Platform
The flurry of consolidation within the hospitality management ranks continued earlier this week as two prominent third-party operators, Remington Hotels and Chesapeake Hospitality, joined forces to create a more powerful company with increased scale and significant growth potential.
Dallas-based Remington’s parent company Ashford Inc. acquired the 65-year-old Chesapeake and its portfolio of some 30 properties for an initial consideration of roughly $15 million in stock and cash considerations giving the company 121 properties in its management coffers.
Describing the combined companies as “formidable but not massive,” new Remington divisional president Chris Green—who was previously President and CEO of Chesapeake Hospitality—told Hotel Interactive discussions regarding the deal and its many details began as far back as 10 months ago.
“We had some conversations that led to a real understanding of alignment as it relates to how we do business and how Chesapeake as a primarily family office and high net-worth, owner/investor type management company would blend well with a primarily institutional, private equity-type firm like Remington. So we would bring our complementary skill sets together to create what we believe to be the most powerful management platform available,” he said.
The newly merged company will be headquartered in Dallas and oversee all day-to-day operations of the entire national portfolio of properties. The acquisition expands Remington’s footprint to midwestern markets, including Pittsburgh, Milwaukee, Detroit and St. Louis. In addition, Remington’s mix of non-affiliated REIT hotels will increase from approximately 20 percent to approximately 40 percent.
Green, meanwhile, stressed that the vast majority of the Greenbelt, MD-based company’s associates would be joining Remington with the exception of those involved in back-office functions such as human resources and accounting. He further detailed some of the synergies between the companies in terms of operating philosophies as well as the potential benefits for employees.
“I see this as a huge win for our estate because our people are going from a company of 30 to 120 plus. So when you think about our old tagline of ‘experience what’s possible’ our people are going to have unlimited career potential and way more access to opportunity. When you combine that with Remington’s tagline of ‘where passionate people thrive’ it was really great alignment of our belief systems. So I’m just so excited from that standpoint and I think that what you’re going to see is a lot of very excited people driving us forward,” he said.
Sloan Dean, President/CEO of Remington Hotels, also touted some of the benefits and synergies in a statement.
“By melding Chesapeake’s culture and know-how with ours, we’ll be able to cultivate even stronger relationships with our properties’ owners by providing them with more resources, better economies of scale, and a more satisfying guest experience,” he stated.
All of the former Chesapeake hotels will remain under the same management. Green—who has been with Chesapeake for some 22 years—did note that the company will effectively be folded into Remington over the course of the next several months.
He elaborated on the potential impact of having access to the additional resources and scale of Remington, specifically referencing technology like REMi, the company’s proprietary market leading business intelligence platform.
“You’re going to get Chesapeake supercharged now and I really believe that. We’ve always had a keen focus on the owner’s specific investment thesis—their needs and wants for their specific asset—but as a mid-size firm there’s only so much we could do to invest in technology or broader commercial platforms…At Remington they just were able to do some things that we weren’t through the pandemic,” he said.
In a post-pandemic age of consolidation with a bevy of companies being acquired recently within the lodging sector, Green conceded it is tougher for smaller or mid-size companies to succeed and further divulged the thought process behind the merger.
“Every business leader has to acknowledge when times are changing, that is part of leadership, especially when you’re leading a company in a market that has been through so much turmoil over the past couple years. I think sometimes that leadership has to make decisions to find like-minded parties and consolidate for the better good. Is it possible for a small company to survive? I think that there are companies out there that are going to work really hard to navigate it, but for Chesapeake it made more sense to partner with a like-minded organization to give us the scale to really take care of our clients and add to resources that we never had,” he concluded.
