OVERLAND PARK, Kansas—Lew Wiens likes to be in the middle of things. That’s why his office is at True North Hotel Group’s Kansas headquarters.
“We’re right smack in the middle of the country,” said Wiens, the company’s chairman and CEO. “We’re in a spot where we can go different directions.”
And for a company that focuses not just on managing hotels but developing them, the ability to go in different directions is key, he said.
True North has 24 managed properties in 14 states and eight more under development. In a way, the latter is an extension of the former, Wiens said.
“Our business model is to develop from wholesale, and some day when the operations are fine-tuned, sell the properties at retail,” Wiens said. “That’s been our model for years.”
Wiens said the company’s strengths are based on the ability to wear both hats as a hotel developer and operator.
“Having a real estate side and an operating side makes us understand both positions,” Wiens said.
He said the company also has some of the strengths of both small and large companies.
“Through our history, we have sold some properties to (real estate investment trusts), and that has made us big boys as far as Wall Street reporting requirements,” Wiens said. “That makes us a better manager and brings good credentials and operating techniques. And being in the middle of the country, I like to think we have the good value systems that come out of the Midwest. That’s a very good foundation to build a company.”
The company’s beginnings can be traced back to the origins of the Residence Inn brand.
After starting as a home developer in the 1970s, Wiens said he followed the Monopoly business model and traded in his houses for hotels. By the mid-1980s, Wiens was one of the first franchisees for the Residence Inn brand and quickly developed a relationship with Mike Dubroff, another early franchisee, through their work with the brand. The two decided to start True North in the late 1990s.
Eventually Dubroff had to step down from the business for health reasons, but the foundation of what the two built continues to exist and grow.
It’s all in the partnerships
The company focuses on branded properties, particularly with Marriott International and Hilton Worldwide Holdings brands. Wiens said their strategy for growth has always been built around creating partnerships, and many of their owned and operated properties are joint ventures.
“I’ve always felt that instead of owning all of three hotels, you’re better off owning parts of 20,” Wiens said. “As far as your risk factor, and if you’re going to build a management company, you can size your company much better if you have multiple projects. … So if we have development partners, we can do more and have more growth.”
Wiens said that gets to the core of what works in the hotel industry.
“It’s about relationships,” he said. “That’s how we’ve grown.”
He said he sees the company’s biggest opportunities for growth in tertiary markets and markets that have recovered more slowly from the last recession. He identified Phoenix, specifically, as a space that could be open to growth.
As a long-time Marriott franchisee, Wiens said he was caught off guard by the news of the company’s planned acquisition of Starwood Hotels & Resorts Worldwide, which was announced 16 November. But Weins said if he’s learned one thing in his 30-plus years in the industry, it is to expect change.
“It’s been a good ride to see this all happening,” Wiens said. “You just have to keep your own strategies changing along with the changing hotel world.”