Boutique Bounce Back
The steep performance decline in the lodging industry that has resulted from the Coronavirus has certainly altered the plans of many hotel companies, but boutique owner/operator Kirkwood Collection doesn’t appear to be one of them.
Alex Kirkwood, founder and president, The Kirkwood Collection, insists the company remains very much on the lookout for acquisition candidates, as well as potential repositioning opportunities, in an effort to further expand its portfolio of boutique historic assets.
The Kirkwood Collection—which was formed in 2013—currently includes five family-owned and operated boutique hotels throughout California. Getting its start with The Palm Springs Hotel, the most recent addition to the portfolio was The Garden Street Inn in San Luis Obispo, which is scheduled to open in 2021 after an extensive renovation.
During a live threaded conversation with Hotel Community Forum, Kirkwood acknowledged the impact of the pandemic on the company’s portfolio but also indicated there are plenty of positive signs pointing toward a summer recovery.
“In Santa Barbara, we are already seeing reservations on the books in the coming months at 2019 levels and higher. We anticipate Palm Springs to follow that lead. San Luis Obispo may take a little longer as a college market and the midpoint between Los Angeles and San Francisco,” he said.
Kirkwood did, however, explain that the company has been forced to pivot a bit in terms of its target audience when it comes to marketing its properties as the recovery is widely expected to begin with local markets.
“We had developed a strong following of international clients but in the post-COVID-19 market we will shift our marketing focus to drive-to markets and regional for the time being,” he said.
Meanwhile, when it comes to expansion, Kirkwood maintains that the company is uniquely positioned financially to take advantage of any opportunities, particularly when it comes to potential acquisitions.
“We believe there will be owners that were preparing to sell or retire before COVID hit and will want to retain as much of their pre-COVID valuations as possible. We have established an acquisition structure that allows my team to re-stabilize their assets and provide their disposition valuation upon recovery, including the ability to 1031 exchange out of the transaction,” he said.
But that’s not the only potential means of long-term growth for the company, which specializes in restoring historic assets. “My design and development team is ready to add a minimum of three projects to our five-year construction pipeline,” he said.
The company has also implemented some changes from a technology standpoint to boost its exposure as well as its management capabilities. Kirkwood Collection is in the process of developing an expanded website to include each property on one site instead of separate site for each.
Also in development is a CRS where all of its hotels can be booked in one place. “Our marketing team will implement a direct booking campaign to capture more of our customer base from third party channels,” said Kirkwood.
Like every other brand, Kirkwood has also updated its operating guidelines with regards to health and safety measures. “We take our cues from the CDC and local hospital guidelines to assure cleanliness on our properties. During this crisis, our essential service, medical, and first responder guests have been amazing advocates of our cleaning standards, evidenced by their incredibly positive and supportive reviews,” he said.
