The term “creating value” is synonymous with today’s hospitality industry. But while everyone has a different interpretation of that, one company that has clearly defined its value proposition has been Davidson Hospitality Group.
With a portfolio comprised of 80 hotels and resorts as diverse as the historic Don CeSar Resort (St. Petersburg, FL); Nobu Eden Roc (Miami Beach); and Margaritaville Orlando. The 40-year-old Atlanta-based company’s portfolio also includes more than 195 restaurants, bars and lounges, and more than 1.5 million square feet of meeting space across the U.S.
“We do talk quite a bit about ‘creating value,’ because that is one of the core tenants of our business model and one of our long-standing core values,” said Davidson President/CEO Thom Geshay, “Our core value reads, ‘Create Value in All You Do.’’’
The definition of “creating value,” Geshay said, varies by position and situation, “but it’s a responsibility of every team member in our company.”
He added, “We are entrusted by all our ownership partners to manage their hotels in a way that satisfies the guests and the owners. That means we need to deliver exceptional experiences at the property level, and exceptional returns at the ownership level. The only way to accomplish that is to have every team member, at every level, contribute their part to the success of a hotel and our promise to create value.
“So, for a concierge at one of our resorts, finding the perfect gift for a guest to give to her or his spouse, is creating value for that guest. For a server to select and upsell the perfect bottle of wine to pair with dinner, creates a valuable experience for the guest, but also has a positive impact on restaurant revenues. For our real estate team to uncover unique ways to reposition an asset while underwriting a new deal creates the NOI necessary to close on the property and deliver a successful acquisition for our partners. So, ‘creating value’ has a lot of definitions, all of which are important.”
The practice of creating value, Geshay said, is “timeless,” meaning he doesn’t believe the definition has evolved or changed over the years.
“It may take different forms, depending on circumstances, but it always emanates from ‘thinking like an owner.’ For instance, we did have to tighten the belt rather significantly during COVID, but finding ways to lose less money, or preserve the asset, or deliver a healthy environment for our guests and team members, are all ways of creating value. At Davidson, we believe getting our entire team involved in the value creation process, reaps huge benefits for our owners, because maximizing asset value requires a 360-degree approach,” he said.
With Davidson Hospitality Group’s diverse portfolio of resorts and hotels, what is the constant message that runs through each?
“Each of these assets are tied together by our purpose and a set of seven core values that guide how we conduct business and treat our owners, team members and guests,” Geshay said. “Each property has its own local, authentic personality that we encourage the property teams to express to the fullest.
“So, each property team chooses how Davidson’s core values will be implemented, but the values must be ingrained in each team member from the first day of orientation and reinforced daily. It’s why I believe we have been able to create such a loyal team that has helped us to maintain low turnover on an annual basis. These core values drive our ESG initiatives, our DE&I initiatives, our culture and ultimately our profitability.”
Davidson Hospitality Group has more than doubled the size of its portfolio over the past five years, which includes the launches of Davidson Restaurant Group and Pivot, the company’s lifestyle division. But for Geshay, the company’s greatest success over that period has been keeping its entire corporate team in place throughout the pandemic.
“In fact, we added to our team as many of our competitors were furloughing great team members. The years 2020 and 2021 were tough to navigate, but having our full complement of corporate support to stand alongside and support our owners and hotels was critical to our ability to quickly rebound from the downslide.
“We thought we had a contingency plan for everything, but we didn’t really have one for revenues going to ‘$0’ due to a global pandemic. At the property level, we fully closed half our hotels in April of 2020, so the property level staff had to be trimmed to the bare minimum, and the brands were cutting their staff in half as well, so our owners needed us more than ever to help them navigate all the uncertainty in the economy. Given the labor market today, had we not kept and added to our team when we were able, we’d not be poised for success the way we are today. Playing long ball really paid off,” he concluded.