While Davidson Hospitality Group has long been an established player among hotel managers in the U.S., officials with the company say they're just now looking to establish a full-fledged foothold in Europe.
Those efforts began in earnest a couple of years ago, and Davidson recently made a big jump with the addition of the Ragdale Hall Spa, a 13-acre, 93-room property in the U.K. countryside northeast of Leicester.
Mark Wang, Davidson's London-based senior vice president of acquisitions and development, said that property isn't technically the company's first in Europe, but it's the beginning of a new era for the hotel operator.
Davidson's first European property was the KSL Capital-owned Cameron House in Scotland, and Wang said the original plan for Davidson's European expansion was to manage hotels acquired by KSL.
Talks on an European expansion went as far back as 2016, Wang said, but Davidson leadership wasn't fully confident in the move until late 2019, but those plans were disrupted by the COVID-19 pandemic.
When Davidson was sold by KSL to Nautic Partners in late 2024, the growth strategy shifted from a focus on assets owned by KSL, and Davidson was faced with a need to seek out different ownership groups to work with.
Davidson now employs a small team in the U.K. and plans to focus on managing upper-upscale and luxury hotels.
In addition to its geographic benefits, the Ragdale fits the mold of a Davidson property because of its uniqueness, Wang said.
"People ask us what we like to do, and frankly, it's the more complicated the better because we can showcase our capabilities with more complicated assets," he said.
Despite having a relatively small room count, the Ragdale has a lot of moving pieces with four restaurants and bars, an 11,400-square-foot spa, six pools, three fitness studios, two tennis courts and three retail outlets.
Wang is hopeful the Ragdale will prove to be a useful example of Davidson's operating prowess in the region. But he acknowledged it can be difficult to move into new geographies where a hotel operator has a lack of reputation and hospitality industry relationships.
Not coincidentally, the Ragdale is owned by Fortress Investment Group, a New York-based company that also owns some U.S. hotels operated by Davidson and a fair number of resorts in the Caribbean, another region the company is looking to grow.
Those relationships will be a key going forward, Wang said.
"It takes time and takes a lot of effort to build those relationships," Wang said. "Luckily for us, we do operate for a lot of the institutional groups in the U.S. that have an international presence, so that certainly helped with initial introductions."
The common pattern for U.S. third-party hotel managers is traditionally to seek out some sort of merger or acquisition to help build out a European platform — a move made by companies such as Pyramid Global Hospitality and Highgate.
Traditionally, Davidson has put a strong focus on organic growth, but the eagerness to grow in Europe might lead to a divergence from that strategy, Wang said.
"We've got some of our U.S. competitors over here, as well, but outside of them, there's not all that many pan-European groups," he said. "So in terms of strategy, we kind of need to figure out, do we look for that? Do we look for some [mergers and acquisitions] in order to grow ourselves in certain regions? Do we look for M&A for a potential pan-European group, or do we continue to grow organically? And I think the reality is it's probably a combination."
Typically the process of finding a operator for a hotel is more formal when working with European groups compared to the U.S., and European hotel owners often look for regional experience, Wang said.
"Whether it's with advisers or brokers, the reality is we participate in [management selection processes], and I think everything that we present is well-received," he said. "They like the level of thought; they like the level of conviction; they like the business plan; they like everything. So we always make it into the best and final round, but at the best and final round, we're coming up against the challenge of, 'Oh, what else do you operate in Europe?' It's great that you can showcase the Grand Hotel, or the Don CeSar resort, or the 600-room Embassy Suites in Nashville, depending on what the asset is. There's a challenge of not enough experience in Europe, and we oftentimes have a little bit of difficulty getting across that hump."
While Wang noted Davidson is looking to grow across the region, he said the initial focus is likely to be on the most popular European destinations.
"It's pretty similar to what we're doing in the U.S., which is tier-one, tier-two cities, as well as leisure and resort markets," he said. "That hasn't changed. But if you want to talk about specific markets or countries where that's prevalent and where deal flow is active, it's probably Spain, Portugal, Italy, Netherlands, to a certain extent."
When asked where he'd like Davidson to be on its European hotel management growth trajectory in a year, Wang said he'd love to see "a fully established platform" by that point.
"Whether that's 10 or 20 or 30 hotels, obviously that's a lot for a year and that's just my personal desire," he said. "Growing organically, the chances of us getting to 10 or 20 through just management agreements is probably unlikely. So you can probably read between the lines where I think M&A is a critical piece of the puzzle here."