Taking Aim At Targeted Growth
Essex Hotel Management Looks To Selectively Expand Its Portfolio
While growth is generally the goal for management companies, particularly with many properties expected to change hands in the coming months, Essex Hotel Management, LLC, is taking a targeted approach to expansion and potential partnerships.
The Rochester, NY-based company—which has developed, owned and managed hotels and multi-family properties since the mid-1980s—currently has a portfolio of 13 branded select-service and extended-stay hotels in New York, Virginia, South Carolina and Florida.
Barbara Purvis, President and Director, Essex Hotel Management, did acknowledge the company would ultimately like to roughly double its third-party management portfolio, but emphasized a methodical approach. “We’re trying to grow moderately and selectively with the right owners,” she said.
Purvis insisted that attributes such as “integrity, trust and transparency” are easier to maintain in a smaller organization like Essex as she explained the company’s conservative approach to growth.
“When we look at our company we have a very high level of personal engagement and communication with our hotel teams, with our owners, with the brands and we’re a fairly flat organization. So people who are dealing with our company are dealing with people at the top for the most part. I think as you grow that there’s a stratification that happens within the organization and so you don’t have quite that same connection at the top. So for us to stay fairly modest in our growth makes sense,” she said.
In 2021, the company signed four management contracts, including the addition of the 94-room Hampton Inn & Suites Plattsburgh in Plattsburgh, NY, in December. Essex also has a pair of properties in development, the Fairfield by Marriott in Stony Creek, VA, and the TownePlace Suites by Marriott @St. Joseph’s Hospital in Syracuse, NY.
For her part, Purvis said she expects a lot of properties to be changing hands this year for a variety of reasons, including an influx of capital coming into the market.
“I think this year will be very telling. We’re already seeing some opportunities that I’d say are beginning to come into the funnel. This has been such a slog over these past couple of years and you have some owner/operators who just have decided ‘I don’t want to do this anymore.’ Those will be opportunities that we’ll look at and some of them will have multiple assets. There are also groups that maybe are currently using a management team that just didn’t work out, so I think there will be some opportunities there as well,” she said.
Purvis did point out that there is plenty of upside that comes with expansion, even if it’s on a limited basis.
“As we’re looking at growth one of the advantages of being a little bigger than we are now is to be able to provide maybe some additional infrastructure within the organization, but also to provide our team members—both at the corporate level and at the hotel level—more opportunities for their own growth. I think that’s something that we’re all striving to do,” she said.
In discussing the company’s portfolio during what has been a volatile year, Purvis specifically highlighted the 97-room Hampton Inn & Suites Lake Placid in Lake Placid, NY. She noted the hotel has been one of its best performing properties adding that it has a “real Adirondack look and feel to it.”
Purvis attributed some of the spike in performance to the changing market dynamics as a result of the pandemic. “That’s a hotel that was able to take advantage of that uptick in leisure demand that started in ’20 when people could only drive places,” he said.
Purvis further elaborated on the impact of COVID on management companies, and the lodging industry as a whole, and how Essex was able weather the storm.
“I think what COVID certainly conveyed to all of us was just the importance of being flexible and being nimble because there was not necessarily any roadmap that anyone was trying to follow. We had good support from most of our owners and I think that was very helpful. I think we all reached out to our friends and peers at other hotel management companies and hotel ownership companies because there were some stories you couldn’t tell to anybody outside the industry. They wouldn’t understand it,” she said.
COVID notwithstanding, Purvis remains very bullish on the future for Essex touting the culture of the “entrepreneurial” company.
“When we look at our organization we’ve had great longevity, both at the corporate level and at our GM level, and often when you look at the supporting staff as well. There are people who have been with us for a long-time and I think that certainly is very telling about the culture of the organization,” she said.