NEW YORK—Denihan Hospitality Group announced on 14 April a restructuring that will split the New York-based hotel management and ownership company into two business units: one to focus on management and operations of its 14-hotel portfolio and one to pursue expansion through investments and third-party management contracts.
“Since 2006, when my brother and I bought the company, we’ve gone from six hotels to now owning or managing 14 hotels in four different cities and reporting to five different owners besides ourselves, so we decided the best thing to do was create two distinct businesses,” said Brooke Denihan Barrett, who is now CEO of Denihan Hospitality, the management arm of the business. Her brother, Patrick Denihan, is CEO of Denihan Investments.
As part of the restructuring, Denihan Hospitality President David Duncan will step aside and become an advisor to the company to help with the transition and to work on other projects.
“David worked for us for the past 10 years, first as CFO and then into the president’s role,” Barrett said. “Now that we have two CEOs, we don’t need a president. David has been involved in several initiatives and will continue to do so for at least the next several months.”
Barrett said the process that led to the decision to split the company started about a year ago.
“We’ve been taking a deep dive into how our business has been functioning over time and looking at how it is perceived in the marketplace by our customers and our financial performance,” she said. “And because it is a family business, we needed to look at succession planning and where we’re headed in the future.”
Denihan is a 50-year-old company specializing in boutique properties operating under The James and Affinia Hotels brands, as well as several independent properties. Eleven of the hotels are in New York with one each in Chicago, Miami and Washington, D.C.
Barrett said the restructuring is designed to bring more focus to the two sides of the business. While each unit will have personnel dedicated to its mission, they will share back-of-the-house services.
“There are different skill sets involved in the two functions,” she said. “One is more on the hospitality and people side, and one is more on being able to find those off-market deals everyone is looking for.”
In March, Denihan announced a joint venture with CIM Group to develop The James Los Angeles, a 286-room property in West Hollywood, California. The hotel, which is scheduled to open in 2016, is Denihan’s first on the West Coast.
Barrett said the company plans to step up its growth strategy on both the management and investment sides of the business.
“We like the hub-and-spoke approach (to growth) and that will include the West Coast,” she said. “Since we have a property opening there in two years, it makes perfect sense that we would add additional hotels out there.”