LOS ANGELES—John Pharr has learned a thing or two after 40 years in the hotel industry. Perhaps most important among them? Adapt or die.
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John Pharr |
The axiom weaves its way through the history at Strand Development Company LLC, of which Pharr is president. The Myrtle Beach, South Carolina-based company began as an owner-operator of Holiday Inns, but has since morphed into a pure third-party manager.
And in recent years, the group’s portfolio of approximately 70 hotels has seen an increasing number of lender-controlled assets—upward of 15%.
“It’s a good source of business that we got into three years ago,” Pharr said during last month’s Americas Lodging Investment Summit at L.A. LIVE in Los Angeles. “… We’re very flexible. We’ve had to reinvent ourselves for survival purposes.”
The focus came as a result of Strand’s long and strong relationships in the banking community, Pharr said. As more of the company’s lending partners began taking back distressed assets, there became a need for a third-party to come in to help with management. Pharr jumped on the opportunity, developing a template and familiarizing his team with licensing procedures in all 50 states.
“That’s one of our strengths,” he said. “When we talk to lenders, they say, ‘You need 30, 60 days notice?’ I say, ‘That’s great, but if you tell us Friday, we can be there Monday.’”
Strand has managed up to 25 hotels in receivership since, Pharr said.
Problem solvers
Managing hotels in turnaround situations has become a Strand specialty, the president said.
“We’re problem solvers,” he said. “When owners come to us, they always have a problem.”
Those challenges can include increasing revenue to company expansion to resolving a brand conflict to managing a hotel in receivership. Sometimes the problems are long-gestating, and other times they spring up on a moment’s notice. In any case, the goal is typically the same.
“Our goal is to make your hotel more profitable so we can drive an exit strategy down the road,” Pharr said.
Expansion plans
With that end in mind, Strand also focuses on marketing hotels for sale by working closely with industry brokers.
The company’s sweet spot is the mid-market—brands such as Hampton Inn, Fairfield Inn & Suites by Marriott, Hilton Garden Inn, Residence Inn by Marriott, and Comfort Inn and Suites. And while its footprint to this point has focused primarily east of the Mississippi, Pharr and his team are looking to expand.
“We want to get bigger. We’ve achieved a certain level, a certain footprint east of the Mississippi. We think we can do a lot more. We’ve got the infrastructure to do it,” he said.
During the past 24 months, the company has extended its management reach beyond the Carolinas, adding hotels in Virginia, West Virginia, Pennsylvania, Maryland, Georgia, Tennessee, Alabama, Mississippi, Louisiana and Michigan to its growing management portfolio.
Pharr said the goal is to grow by 20% to 30% annually.
Finding and adapting to new opportunities will continue to play a major part in that expansion, he added.
“To always look for new opportunities is part of our culture,” Pharr said. “… You can’t sit back and hope people will call you.”