PHOENIX, Arizona—Being a contrarian works for Concord Hospitality Enterprises.
Raleigh, North Carolina-based Concord isn’t too worried about where the economy is today or tomorrow. Instead Mark Laport, the company’s co-founder, president and CEO, likes to look a little further down the road. That’s why it recently broke ground on a hotel for the 16th time during 2008. The 16 hotels represent 2,132 guestrooms.
“Our expectations are that the economy will come back, and we’ll have the freshest product in market when it does,” Laport said during an interview with HNN during The Lodging Conference 2008.
All of the hotels under construction will eventually fly one of Marriott International’s flag, except one 132-room Hilton Garden Inn located in Arlington, Texas. All of the properties are expected to open by the end of 2009. In addition to Arlington, Concord has hotels under construction in Pittsburgh, Pennsylvania; Raleigh; Hamilton, Ohio; two in Plano, Texas; Reading, Pennsylvania; Cumberland, Maryland; Webster, Texas; Durham, North Carolina; two in San Antonio, Texas; Houston, Texas; Meadowlands, New Jersey; and Birmingham, Alabama.
Concord, a management and development company, has a partnership stake in every deal. It has 50 hotels comprising more than 6,000 guestrooms in its current portfolio. Laport said the company reached a strategic fork in the road last year.
“We made a statement a year ago in a big way when we sold a US$440-million portfolio with 20 Marriott hotels, and we took back the management of all those hotels,” Laport said. “We bifurcated our strategy. Fee income is not a bad thing. As long as we can add third-party management deals that are of the same quality as our own hotels, we will take them on.”
Houston, Texas-based Moody National Cos. acquired the hotels from Concord. At about the same time last year, Concord announced plans to build $500 million in new hotels as part of its goal to double its portfolio size to 100 owned and managed hotels by 2010.
“It took us 20 years to do our first 50 hotels, and it’ll take us three years to do our next 50,” Laport said.
No growing pains
To help accomplish that goal, Concord hired Nick Kellock, formerly of Marriott International’s corporate office, to be chief operating officer, and Grant Sabroff, formerly of Boykin Lodging, to be senior VP of business development.
Laport said during a time when employee costs are going through the roof, having a robust pipeline is good for morale, and that helps the pocketbook as well.
“When you’re growing at the rate we are, best-of-class employees in every market want to be part of it,” he said. “That might mean a little more investment at the start, but the returns come quickly. We have people that are much more coaches and mentors than simply front-line employees. That means a lot when it comes to training.”
Laport said Concord’s reputation has benefited as it nears the 3,000-employee threshold.
“We have not used an employment agency since the early ’90s,” he said.
Its future plans include adding products from the families of Global Hyatt Corporation and Starwood Hotels & Resorts Worldwide as well as more from the Hilton Hotels Corporation portfolio.
“We’ve become very adept at knowing all the buttons to push at Marriott to take advantage of the great marketing and great brands they have,” Laport said. “We’re want to expand that knowledge base.
“In markets where we’re already doing well, and we know we’d like to expand, it’s a natural for us to bring in other brands,” he added. “If we don’t do it, somebody else will get it done.”
Laport said the current construction process is all over the map in terms of pricing. His company is building from Texas to Florida to Canada, and the construction-cost situation is different in nearly every market.
“Edmonton (Alberta) has been tough with construction costs rising 2 percent per month,” he said. “There it is (US) $240 a square foot to build. We just finished one in Pittsburgh (Pennsylvania) for (US) $115 a square foot.”
Construction costs in South Florida have leveled. Laport cited the cost of concrete as a big factor, saying it is decreasing monthly by double-digit percentage rates.
So, the company will continue to build regardless of the success of the government bailout of the financial system.
“The esprit décor in our company is there’s always talk bout what’s next,” he said. “At the end of the day, it’s just a ton of fun to be able to do all that where people enjoy their workplace and there’s quality.