LOS ANGELES—For a brand-new company, CoralTree Hospitality Group has a long history.
Made up of a portfolio of former Two Roads Hospitality properties, the leadership and DNA of the Lowe-owned hotel management company extends back not just to Two Roads but to one of that company’s two predecessors, Destination Hotels and Resorts, which also was a Lowe venture.
CoralTree President Tom Luersen has spent the past 20 years working with those three companies and said he expects the company to be more than just an updated version of Destination.
“There are a lot of parallels to our past, and we’ve had a lot of great lessons and successes,” he said. “We have the same value system, … but today CoralTree is in an industry that is consolidating, seeing big companies buying each other, and we can find uniqueness in management by being small and organized, working closely (with owners) and collaborating. We’re going to focus on resorts and unique hotels.”
One of the most noticeable ways CoralTree will differ from those other companies is there will be no effort to establish its own brands, Luersen said.
Born from the Two Roads sale
Luersen said CoralTree’s current portfolio is made up largely of properties that could not be part of Hyatt Hotels Corporation’s purchase of Two Roads Hospitality because of conflicts.
Those conflicts includes prior brand affiliations, both with soft brands and traditional brands. Luersen said his company will continue to focus on working with independent properties and established brands without working on establishing its own consumer-facing branding, which he said is a return to Lowe’s long-standing strategy.
“We want to manage unique destinations with a focus on resort and lifestyle assets,” he said. “Currently, we’ve got 18 hotels with 3,600 employees, and we’ve formed a team that worked well together for decades. So we’re going right back to that. … We’ve continued to have relationships with owners we’ve had for many years.”
Luersen noted a lot of the bigger hotel companies recently have shown interest into establishing more of a presence in that unique resort space, but he remains confident that CoralTree can pull it off better.
“What I can say is we’ve been in this space for 45 years (through Lowe), and we can create distinctive experiences designed for adventurous travelers in communities worth visiting,” he said. “Global brands acquiring portfolios will have to adapt to that business model, and that will take some time.”
Lessons learned from the past
CoralTree is currently in the “sweet spot” of having all the energy and enthusiasm of a startup paired with the institutional experience and memory of a long-established company, Luersen said.
He noted not only is there the experience of executives from Lowe and Destination to draw on, but the company will hold on to best practices learned from the Commune Hotels and Resorts veterans who worked at Two Roads as well.
“Commune put a unique focus and energy around its brands and lifestyle properties,” he said. “And its culture was also very energetic, which helped drive individual experiences at hotels.”
Luersen said the company’s corporate culture also had valuable things to hold on to.
“Commune had a real focus on diversity, so we’ve tried to take that experience and focus both from a people standpoint and bringing on a diversity of experiences,” he said, adding that bringing in team members with varied cultural backgrounds resonates with guests.
Looking for targeted growth
Luersen said CoralTree will be “thoughtful and selective” in growing and striking new deals, the first of which he expects to announce in March. For the time being, the company will focus on growing in the continental United States, although he foresees opportunities to grow in Mexico and Puerto Rico in the not-too-distant future.
“We have no goal today to go international,” he said. “The roots of Destination go back to building an independent property in Aspen, and that’s the type of place we’ll continue to be.”
He said the company also will be selective in whom it works with, wanting to find properties and ownership groups that “fit within the culture and values of our company.”
“Picking a number (of properties) to hit is less important to us than finding unique properties and forging great relationships with owners,” he said.