SAN FRANCISCO—Third-party-management company Engage Hospitality has a new president and CEO in David Chin, but the company remains firmly committed to its San Francisco-born-and-bred boutique hotel roots.
Chin took the reins in May when company founder Yvonne Lembi-Detert stepped down, but he’s not new to 5-year-old Engage Hospitality. He was a co-founder along with Lembi-Detert when they launched the company in 2012 to grow the third-party management platform of the existing Personality Hotels, the family-owned and operated portfolio of independent hotels that still is part of Engage Hospitality today.
Today, Chin is in charge of an 11-hotel portfolio that it purely third-party manages. Four hotels are part of chains (a Country Hearth Inn, two Holiday Inn Express hotels and a Comfort Inn). The remaining seven are all independent boutique hotels, five of which are marketed under the Personality Hotels umbrella brand.
Independent roots
Engage Hospitality was a product of the recession, Chin explained.
“We were in the middle of layoffs (at Personality Hotels) and (management) wanted more cuts and I said, ‘We can’t really cut off our nose to spite our face,’” Chin said. “So I went to Yvonne and suggested we start a third-party management company. It was a recession and there were a lot of owners who could use our help.”
At the time, he said the company’s intentions were to gain third-party-management clients “to maintain our infrastructure and help other hoteliers who were going through the same thing,” Chin said.
And that’s how Engage Hospitality came about. At first it managed the family-owned Personality Hotels portfolio while it grew its relationships with other owners.
“We really wanted to expand into branded hotels, too, and diversify beyond just the Personality hotels,” he said.
As Engage Hospitality grew its client base, Chin said a big company cornerstone always was its commitment to making business better for its owners, most of whom are private owners, with some equity players in the mix as well.
Chin himself is well-versed in San Francisco’s boutique hotel scene. He started his career in the industry as a front-desk clerk at The Tuscan. His intended career in psychiatry went by the wayside when he chose to remain in hospitality. He worked with Kimpton Hotels & Restaurants for seven years and later on the franchising side with InterContinental Hotels Group, then as a GM in San Francisco.
Next steps
“We have to see how efficient we can be and how we can continue to bring more value to our owners and investors; that’s our No. 1 priority now through this transition,” Chin said.
Moving forward, Chin is focused on growing the footprint of the boutique lifestyle Personality brand, which now includes Kensington Park Hotel and Buena Vista Motor Inn in San Francisco; Mariposa Inn & Suites in Monterey, California; Flamingo Resort & Spa in Santa Rosa, California; and The Millwood Inn & Suites in Millbrae, California.
“I do get project inquiries for places like Virginia and Texas, but as a boutique hospitality firm, I want to expand our stronghold here in California before we think about moving out,” he said.
Branded hotels still are a part of that stronghold, he said. The next step beyond traditional brands might come with soft-brand opportunities. “We might begin to look at certain brands that complement us,” he said. “For example, there are soft-branded hotels out there now that could fit into our Personality Hotels group.”
What about going the buyout route?
Chin said that’s not the plan right now.
“That’s a little pie-in-the-sky thinking right now,” he said with a chuckle. “Our focus now is to solidify our infrastructure and take care of our current clients and expand that way. We want to stay independent; it means we can go anywhere and do anything.”
The boutique revolution
Chin said it’s an exciting time to be involved in the boutique hotel segment, though it’s not without its challenges.
“It’s amazing that we’ve had people like Bill Kimpton and Yvonne Lembi-Detert and Chip Conley who really envisioned what lifestyle boutique hotels can really be,” he said. “Now people want to get into this segment.”
Distribution is one area Chin has seen much change, and it’s a space that will continue to evolve, he said.
“When I think about when IHG purchased Kimpton, it was a big deal because Kimpton could still be an independent boutique company but also have a (central reservations system) as large as IHG’s,” he said. “Eventually, the separation and lines between things like traditional brands and soft brands are going to be grayer because at the end of the day it’ll be about the most efficient distribution channels.”
Building CRS and distribution partnerships is a big part of Chin’s focus. He’s constantly reviewing the company’s distribution partners not only to find solutions that work today, but also ones that will remain viable in the long run.
“You have to go out there with open eyes, knowing what’s available to you,” he said about distribution via online travel agents in particular. “At the end of the day a lot of hoteliers get discouraged by how much OTA business they have, but you have to control it yourself. When business is good, you capitalize on average daily rate and pricing, but at the end of the day you still need those OTA relationships.”
Looking to the future, Chin said he’d like to see the company’s portfolio double in size over the next two years to reach 20 properties. He also said a long-term goal is diversifying its third-party platform into hotel investment.
And given the company’s roots coming from a recession, the next downturn is never far from Chin’s mind.
“The most valuable lesson we learned from that period was how to work lean,” he said. “We are efficient, and we’ll be well-prepped going into the next recession.”
And of course, service is always top priority. “We constantly train for service standards, above all else,” he said. “When the next downturn comes, we’ll be ready for it.”