DENVER—If a flower needs fertile soil to grow, Magnolia Hotels sprouted against the odds when its seed was planted in a then-desolate Denver two decades ago.
The city was a shadow of its current self back then, explained Leigh Hitz, president and CEO of Stout Street Hospitality, the corporate entity that owns and manages the Magnolia brand.
“There was nothing downtown. Coors Field (home of the Colorado Rockies) wasn’t open. There was nothing,” she said from Stout Street’s corporate offices, which are located in the Magnolia Hotel Denver. “This was kind of pioneering to do this.”
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Leigh Hitz Stout Street Hospitality |
The pioneer behind the risky endeavor was Steve Holtze, whose family still privately owns the company. In 1993, he acquired the 85-year-old former bank building in what is now Denver’s thriving central business district and invested millions of dollars and two years in a historical adaptation to make it the 246-room hotel that stands today.
The investment quickly paid off, and Holtze tried his luck yet again—this time in Dallas.
More than 15 years later, Magnolia counts five hotels with approximately 1,200 keys. The group looks to add another property in the Midwest by year end, while Stout Street is leveraging its proven track record to expand its third-party management base.
Getting their hands dirty
The company is small by design, Hitz said. Stout Street’s “lean-and-mean” corporate team comprises about a dozen experienced hoteliers, many of whom boast long tenures with the company (ranging from 15 to 20-plus years) and, before that, former GM experience.
“I really hire veteran GMs,” she said. “They have all been GMs for 20 years. You aren’t explaining to them how to do an inventory. They know all this stuff. They’ve been through this.”
Each is well-versed in the trials and tribulations involved with running a hotel, and they’re not afraid to get their hands dirty within the portfolio.
“We probably micromanage a whole lot of reports,” Hitz said with a laugh, but that helps keep things running smoothly.
The management team knows exactly where each dollar at each property is spent, how many roomnights have been booked and where, and what potential challenges exist on the horizon.
As the company grows, Hitz doesn’t fear the company will lose control.
“We have enough communication and enough meetings to check in,” she said. “And we also try to not duplicate a lot of efforts.”
The team also completes quarterly reviews of each property from top to bottom to ensure things are churning along. The process helps monitor each asset’s physical condition, operational components such as food-and-beverage, and, perhaps most importantly, the company’s 450 or so employees.
“We try to get as much information as we can from everybody in the field in how things are going. ‘What do you need? How are things working? Are the vacuums any good this year?’” Hitz said.
Contrasting the ‘humdrum’
Magnolia markets itself as providing a distinct contrast to the “humdrum” of large nationwide chains.
“We’re kind of the go-to choice for independent, boutique hotels in these cities,” Hitz said.
The group focuses on second- and third-tier cities with plenty of airlift.
“Our client base is typicality in that area,” she said. “We are really focused probably on the 12 or 13 major second-tier cities and then we’ll venture out to the New York, San Francisco.”
The properties feature chic interiors that mirror the locale. At the Magnolia Hotel Houston, for example, sections of the lobby walls are adorned in leather—an ode to the region’s cattle-raising roots.
But for every difference there are the similarities. Each Magnolia hotel is in a central business district, for example. And the majority of hotels are historical renovations.
Another common thread is value for money. Included in a standard room rate is complimentary breakfast, an evening reception, cookies and milk in late evening, meetings space and high-speed Internet access in all guestrooms and public spaces.
The latter can prove challenging to provide, as guests’ expectations keep growing. But Hitz is game for the task, ready to roll up her sleeves and continue to keep ahead of pace.
“You’ve got to stay way ahead.”