Newport Hospitality Group (NHG) is a management company that has existed since 1990. Growing primarily from managing distressed properties to prime select and full service hotels, co-founder Mike Pleninger has a lot to say about resuscitating hospitality businesses and sustaining profitability. So, let’s dive in and see what we can learn.

What is the state of the business today?
Today, NHG manages 30 properties totaling just over 3,000 rooms with two more under construction and four in the planning stage. We manage most major brands: Hilton, Marriott, IHG, Hyatt, Choice and Wyndham, both select-service and full-service.

You’ve told me that performance in 2013 and 2014 has been outstanding.
NHG RevPARs from 2011 through 2013 were up 23.4% versus 14.2% for our competitive markets. The year 2014 is up 7.9% YTD through June. Our markets have done well also, up by 6.0%. We attribute this success to four main disciplines :

• A strong direct sales effort. Most of us came up through the sales ranks, before the brands generated as much loyalty as they do presently. Someone told me early on, “Hotel occupancy is directly related to the number of outside sales calls.” I still believe that, and our company endorses it.
• A deep commitment to training. We’ve had a training department since 1995, when we had ten hotels. We currently have two people that visit most properties twice a year conducting customer service training and front office sales training.
• Emphasis on guest satisfaction. We strongly believe that the higher the guest satisfaction scores, the higher the revenues and profits. We think this applies to all brands and market segments. We are particularly proud of our TripAdvisor scores: 20 NHG hotels rank in the top 15 % of their markets, 12 are in the top three and 6 are number 1.
• Consistent management. We have been able to develop an atmosphere where our top sales and management talent remain challenged and are able to grow along with us. Of the 70 general managers, directors of sales and corporate office staff, 35 have been with us five years or more, 17 have been with us over a decade and 11 have been with us over 15 years.

What goes into the process of chain/flag selection?
It depends on the market and, quite frankly, what flags are available and what saturation levels may have been reached. Franchise selection is critical. Several years ago, I heard a speaker paraphrase Yogi Berra, saying, “75 % of the success of a hotel is due to its location. The other half is due to the franchise.” You could say the same thing about management companies.

How important is social media to you as a management group?
We have been using Revinate for several years. It makes monitoring fairly painless. We use the user-generated reviews to assist with quality control and to award associates mentioned positively. It is also an excellent prospecting tool for our sales team. Our teams have actually contacted unhappy groups and guests who had been staying at competing properties and had them move their business to us. Thank goodness we have young folks who understand and live all this.

What economies of scale have you achieved through your current size?
Our centralized accounting certainly benefits from economies of scale. I wouldn’t say that the other management functions do. What size does provide is the ability to offer more resources for marketing and management disciplines.

Are there market opportunities for owners in any particular segment that can be exploited now or in the near future?
There are a large number of market opportunities, but they are niche and location specific. I personally think the extended stay segment as a whole is still underdeveloped, but gaining ground. Of the four hotels we have in the planning stage, two of them are extended stay. With all of the various brands being offered by the major franchisors, too much development is my real concern.

(Article by Larry Mogelonsky, published in eHotelier on March 31, 2015)