WASHINGTON, D.C.—The baseball cap returns to the closet, hung next to the skis, which won’t come out for another month or so. For Jerry Petitt, it’s officially hotel season.
Petitt has just closed out another season as chairman and CEO of the Coastal Plain League, a 15-team, wooden-bat summer league featuring college players from throughout the nation. Now his attention turns toward another great passion—owning and operating hotels. With industry fundamentals on the upswing, he and partner Tony Rothwell say it’s the right time to officially get back in the game.
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Jerry Petitt |
Petitt and Rothwell announced their newest venture, Creative Hotel Associates Management, in mid-September. The company manages three properties and just signed a consulting contract with another. Petitt said they are trying to sign more management and consulting contracts, and he is actively talking with lenders and equity partners with the hopes of investing in some assets. “I feel good about what’s happening within the industry,” he said. “Certainly from an occupancy standpoint we’re going to have a better year, and I think the next year will be even better. This downturn certainly lasted longer than anyone expected. Although the economists came out and said it was over a year ago, it really hadn’t come back until this summer.”
The consummate hotelier
Petitt is no stranger to the hotel business, and Creative Hotel Associates is no flash-in-the-pan management company. Before venturing out to collegiate baseball and buying a ski lodge in Colorado, Petitt held C-level positions with Best Western International and Choice Hotels International. He spent seven years with Best Western, ascending to COO before leaving to join Quality Inns (which later evolved into Choice), where he spent 15 years and ended up as president.
Petitt helped grow Choice from 330 hotels to 3,500 hotels, but eventually got the itch to try something different. He and a few other Choice co-workers branched off to create Creative Hotel Associates, an owner and operator of brands from Marriott Hotels and Resort, Hilton Worldwide and Choice.
“I spent a number of years on the franchise side,” Petitt said, “and I decided at that point that I wanted to try the other side of the table.”
Petitt said having been on the franchisor side of the business helped him succeed for a number of years as a franchisee.
“We knew what products were successful. We knew where to build and what kind of property to build,” he said. “We had access to experienced GMs and other people in the industry. We were able to build up an operating company very quickly.”
Cashing out
During the next nine years, CHA built some properties and bought a few others. At one point the company was operating 19 hotels in three geographic areas: the Northeast, Florida and in the Rocky Mountains. But nobody stays in the hotel industry long enough without learning of its cyclical nature, and around 2007 Petitt and his business partners, including a major California-based investor, got the urge to cash out.
“We decided the time was right to get out. Over a year-long period we sold all the properties,” Petitt said. “Little did we know we got out about three months before the bottom fell out. Timing is always nice.”
Petitt admitted that CHA’s decision to sell its assets right before a downturn was more luck than accurate forecasting. Although no one could have predicted such a severe recession, Petitt said he did feel the long run of positive profits couldn’t last forever.
“That turn was going to come,” he said. “We decided not to be greedy, not to hold on for a few more dollars. We decided to take our profits and wait for a better day.”
Looking ahead
The decision to sell assets at peak values afforded Petitt several luxuries, such as buying a ski lodge 2,500 feet above sea level in upstate Colorado. Also, he and Rothwell, a former marketing executive at Choice, decided to spin CHA into strictly a management company and the two maintained management contracts with three properties that CHA sold. They “laid low” until the downturn passed.
“We decided to wait a bit and maintain our office and our base until the downturn evolved,” Petitt said.
Now, with the ski and baseball seasons temporarily dormant, combined with resurgence in travel, Petitt said he feels like it’s the perfect time to ramp up his hotel efforts. Last month he opened up CHA in a consulting capacity as well and signed on the Inn at Aspen.
Wearing a number of hats throughout his career will provide an edge over the competition, he said.
“I always kind of enjoyed having disparate interests that can work together but can also act alone,” he said. “The key in every business is figuring out how to generate customers and figuring out how to