PHOENIX—Management company MJS Hotels is planning to help revive the struggling Phoenix hotel market with its recently announced growth strategy, in which it will focus mainly on turning around failing properties in the Valley of the Sun.
|
Si Sloman |
Si Sloman, principal at MJS Hotels, said the company’s experience with hotels in the area will be beneficial. During the past two years, he and his management team have turned around seven hotels in the Arizona market.
“We can deploy our resources very quickly because we are in the Phoenix area,” he said.
MJS has one of its three offices in Scottsdale, Arizona. The other two are in Danbury, Connecticut, and West Palm Beach, Florida.
MJS has 35 hotels in 16 states in its portfolio. Of those properties, 20 are owned and 15 are managed.
Sloman believes the company will be successful in Phoenix because there is nowhere for the market to go but up after such significant declines in revenue per available room.
“Phoenix started to see a decline in 2008 in (revenue per available room) before the other markets did. In 2009, Phoenix continued to see a RevPAR decline of over 25% while the top 25 markets were declining at 18-19%,” Sloman said.
The market started seeing some improvement in 2010 and 2011, but it is still not showing as much progress as the other top 25 markets. Through August year to date, Phoenix posted a 7.1% increase in occupancy to 60.5%, a 2.3% gain in average daily rate to US$105.70, and a 9.5% jump in RevPAR to US$63.95, according to data from STR, parent company of HotelNewsNow.com.
Strategy Ad Will Appear Here
The company’s turnaround programs are about two things, Sloman said. The first is a strong focus on the basics: “We believe that for a hotel to perform effectively, the fundamentals have to be in place. We focus on the business fundamentals with a great degree of intensity.”
The second most important component of the company’s turnaround strategy is an Internet customer capture program, which is designed to increase the presence of MJS’s hotels online through enhanced content and marketing. The company is in the process of developing and integrating the program into its hotels’ sales and marketing plans.
There is a significant difference between reaching people over the Internet as opposed to just using the phone, Sloman said. During the first three months of the capture program beta test, the company’s hotels saw an average of 17% growth in RevPAR.
“It’s really a unique time in our industry right now. We have to think differently about our business if we plan to not only survive but thrive in this environment. We’ve put together a program that addresses the typical things you would address in a hotel operation, but we’ve tried to think outside the box to reach our Internet customers,” Sloman said.