Client Testimonials & Case Studies

Renovations Spell Increased Revenue

Hampton Inn, Harrisonburg University, VA

The Hampton Inn Harrisonburg, acquired by American Hotel Income Properties REIT in June 2015 and turned over to ONE Lodging Management to manage, has location and size in its favour. It’s adjacent to the James Madison University and close to shops and easy access to the interstate. At the time of acquisition, the hotel had market average and consistent performance but ONE Lodging Management felt it was under-performing in ADR and RevPAR.

This mid-sized hotel hadn’t been renovated in over a decade and it was tired in appearance; however, there was room for improvement—namely 160 rooms. In adherence with Hampton Inn’s renovation program, “Forever Young Initiative”, ONE Lodging Management prepared a $4.4 million dollar Property Improvement Plan (PIP) calling on renovations and a refresh, inside and out.

The signature exterior upgrade involved the conversion of the original roofline to a new illuminated roof cornice and upgrading the signage to the current brand standard. All 160 guestrooms received a fresh, contemporary new look, including one suite that was converted in to a boardroom that better positioned the hotel to attract small business meetings and corporate groups from within the Harrisonburg/James Madison University area.

From May through September 2015 the hotel remained open and operational despite the extensive renovations. In the past year since the renovations, the hotel has not only seen a growth in RevPAR by 29.3% and a 12.3% gain in market share; the growth in revenue has already returned the cost of the renovations; all in just a few months.

Client Testimonial

“ONE Lodging Management manages all 96 AHIP-owned hotels and we will continue to choose ONE to operate further acquisitions. Over the last three years, ONE Lodging Management has consistently outperformed the competition on financial, market share, guest and supporter loyalty targets and in doing so have delivered on GOP goals in each one of our hotels.”

Ian McAuley, President
American Hotel Income Properties REIT

What ONE’s Experience Has Achieved

From Distressed to Profitability in Record Time:

Xona Hotel & Suites Scottsdale, AZ

In 2011 we were asked by the new owner to improve and manage a distressed hotel. About the only thing going for this independent property was its North Scottsdale location, with great shopping and restaurants nearby. The previous owners couldn’t have begun renovations at a worse time—2008. Renovations hadn’t been completed and the management in place were barely keeping the lights on. Revenue had dropped drastically. The revenues for Xona in 2011 were just over $11 million for the calendar year.

First, we got a better understanding of the market and where we had a niche. Scottsdale has a seasonal market that peaks in the winter months so there’s a direct correlation to temperature and occupancy. Because the property was a large hotel (431 rooms) distribution help was desperately needed: Upon a brand review, we signed a franchise agreement with Choice Hotels and Xona became part of its Ascend Collection. By donning the Ascend brand, it allowed us access to their distribution systems, guest networks and most importantly, their corporate guests.

Because we renovated section by section, the hotel stayed open. During this time we focused on market segments. Golf is the number one tourism driver and the hotel had many suites conducive to golfers but the previous owners had gone in another direction. The challenge, golf is seasonal, so we still had a problem. How can we sell suites with full kitchens over summer months? The answer was short-term rental apartments. We placed ads on Craigslist: Apartments available for rent with 1-4 bedrooms, minimum 30 days. Suddenly the property went from low occupancy and dismal revenues to generating more than $1 million in gross revenues –in just a few months. These suites were our sweet spot!

As there was no shortage of temporary residents for a number of reasons. Perhaps they were buying or selling a house or renovating. So, rather than signing 12-month leases we offered folks flexibility and they allowed us to move from the 20% to 70% occupancy zone. We had created a hotel within a hotel.

Our summer strategy worked so well financially with a projected revenue goal of $16.5 million that in 2014 we received an unsolicited purchase offer. Xona sold the following year to a time-share company. Our repositioning of the property and our turn-around strategy proved very effective. The owner was thrilled. And so were we.

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