How Raines Finds More Profit Inside Existing Hotels

Glenn: [00:00:01] Hey, everybody. It’s your hospitality friend Glenn still here at the lodging conference. Why? Because I found my friend Kerry Ranson, President Operations/ Partner of Raines. But first, I want to thank our friends over at Unifocus workforce management Redefined. Thank you. Check them out at unifocus.com. All right, so you guys have a lot of different interests. But I thought for today, we talked a little bit about what’s going on in the world of third party management, because I feel like with a lot of properties doing conversions, there’s probably a lot of opportunities with folks like you to help build your business.

Kerry: [00:00:30] Yeah, for us, it’s a big focus. It’s a focus from the standpoint of we look at it from we are owners. So we have that approach of an owner’s mindset from how we look at revenue expense, controls, the asset value long term from the development perspective. And for us, it is a huge strategy, but not for the sake of growing. For us, it’s look, right now we’ve got the infrastructure and our layout from North Carolina down to Florida and over to Dallas with people in the field that we can be selective. And for us, that’s right. Partners. Yeah. Right. Partners that are, you know, understanding of what we’re trying to bring from a view of asset value and building the asset value for them. And so for us, it’s a big focus that we feel is, to your point, a huge opportunity, a huge opportunity with what could be right now, a tough environment to do ground up stuff in. But perhaps the ability to purchasing and up branding through, you know, re rebrand of an asset or even taking an existing old asset and then doing an adaptive reuse.

Glenn: [00:01:38] I love adaptive reuse projects. For example, we’ve talked about the lantern project before, which is absolutely gorgeous and plays right into that. And these folks really do a lot of those types of properties. Let’s go to the Foundry.

Kerry: [00:01:50] The know the Lantern.

Glenn: [00:01:52] Know the one, know the one that’s in.

Kerry: [00:01:54] Asheville, our, our foundry.

Glenn: [00:01:56] That’s right. It is called.

Kerry: [00:01:57] Foundry.

Glenn: [00:01:57] Yeah. So these are the types of properties that they’re doing. So I, I encourage you to find other interviews where we’ve talked about that, But back to that third party management thing, we’re here at the lodging conference. Are there are a lot of owners out there looking to make changes now. Is it on target with what we see every year or because of the fundamentals we see out there? Are there more people thinking about making changes?

Kerry: [00:02:20] Well, I think you’re seeing that and I think you’re seeing it because of right now, like our philosophy this year has really been bridging the gap because there is this gap. There’s this gap of a revenue stream that perhaps we’re not getting fair share in markets. Or the bigger piece of it is really the squeeze that’s happening in the middle of the page with expenses. And so we’ve been working diligently on our side to go, how do we bridge that gap of if we get the revenue, how do we actually land it from the standpoint of we got it, but does it actually flow to the bottom line? And so to your to your question, I think there are owners out there looking and going. My debt to increased interest has increased. And so from that standpoint, I’m not making as much money and I cannot continue to. Yeah. Hey, great. Appreciate the fact that you’re driving revenue, but none of it’s flowing the bottom line. Yeah. And so I do think there is a lot of owners that we’re starting to see out there saying, maybe it’s time for me to look at something different, because I think there are perhaps a lot of management companies that it is. It’s about growth. And for us doesn’t need to be about growth. And we’re sitting there trying to protect what is asset value. And so we can bring that lens in to say, how do we make this long term to be sustainable in an environment where, hey, that’s gone from 3% up to six, 7%?

Glenn: [00:03:36] Well, there’s something to be said also about fresh eyes coming in, because I think we have a tendency not to see something right in front of us, even if it’s plainly obvious, because we just kind of see through it. Right? Right. So you bring in folks like you and they could, like, you could really reevaluate everything from bottom to the top of everything, kind of find all of the opportunities.

Kerry: [00:03:53] Well, and that’s the whole journey, like the life cycle of an asset where we’re sitting there, you know, bringing from the ops to the owner you know, our big focus with our guys is, look, we’re not just going to produce a financial statement. Check in at the end of the month. At the end of the month is what happened. If it wasn’t right, what do we do to fix it? What are successes? But more importantly is where’s the value of the assets stand and what are we doing to get it to the next level? And how do we partner with you to go find other opportunities that could be worth more for you and your portfolio?

Glenn: [00:04:28] That’s cool. What about customers? What are they thinking about right now? And what are you doing at all of your hotels to try to connect with them better?

Kerry: [00:04:37] From a guest standpoint, from a guest standpoint, I mean, I think you look at things like our lantern, and I think it’s the experience component that a guest is looking for that’s something different. And so those are the pieces I think we’ve used from our lifestyle brands that we’re trying to also put into our regular run of the mill Hilton garden.

Glenn: [00:04:57] I’m glad you’re saying that, because my next question to you is, how do you then take some of those moments and put them into a different type of product that wasn’t designed necessarily for that experience?

Kerry: [00:05:08] But but why can’t we? Why can’t we sit there and program in a Hilton Garden inn in a bar that normally is dead, to bring in little fun things like a trivia night or a one man band? And those are the things that I think we picked up and realized that places like the Lantern and the foundry and even Waynesville, our golf course, where it’s like, how do we keep our guests here? And those are the things that we started looking at saying, it’s not that expensive. And if I can go and end up building revenue streams in the bar and the restaurant with that, then it helps us. And so those are things that we’ve been doing to try and do those things to keep those consumers actually there. So from the standpoint of actually programming different events and whatnot on what would be busy nights, we’re not going to go and run entertainment on a Sunday night.

Glenn: [00:05:57] Right, right. There’s no reason for that. But you’re leaving out one point that I already know. You’re thinking about also bringing in people from the community. You say trivia night, that’s not only going to be people in the hotel.

Kerry: [00:06:07] No, that’s. Well, and that’s the other piece to your point, is when you’re bringing in that in a one man band type piece is they have followers. That’s right. Right. So then I am I’m getting walk in guests and consumers that don’t frequent the hotel as often. And so there’s things like that. There’s also things from a standpoint of sports groups coming in. So as the sports groups are coming in, in the past, while we may have stocked the bar or had extra people to do it, we never promoted what would be specials. Like maybe I’m I know there’s parents coming in for soccer. Well, we might do champagne specials, endless mimosas or bucket beers. And so those are pieces through Kitsu that we’re sending out before they’re coming in saying, hey, this is what’s happening. As well as stocking our pantries with liquor and alcohol and stopping them from leaving to go and buy from a store and coming in my lobby and drinking. And I’m not we’re not making any revenue from it.

Glenn: [00:07:00] No. Correct. And as long as you’re not jacking up the price too much, people are going to pay a little bit extra for that convenience because they just got off the road with a car full of kids.

Kerry: [00:07:08] Exactly right. That’s exactly right. That’s exactly.

Glenn: [00:07:10] Right. Anything else you need to know about what’s going on at Raines?

Kerry: [00:07:13] Yeah. Look, I mean, I think for us, it’s just a true focus on trying to find the right partners that, you know, we can grow with in our area. And from a regional perspective, and bringing in the kind of an owner’s mindset of taking us and them down a journey of asset life cycle. And, you know, I think to your point on Lance, and we’re excited about what that brings and the difference that it’s making with, you know, our high functioning special needs team members. I mean, that’s been such a special project for us. So we’re excited about it. We’ve got about five projects coming out of the ground. Ground up stuff that’s that’ll be open probably mid year next year. Cool. So at this point, running about, you know, 60 assets in the South.

Glenn: [00:07:56] So excellent. You know what. When some of those assets open I got to get down there. We’ll do some property.

Kerry: [00:08:00] You know we love having you.

Glenn: [00:08:01] I know that would be the best. All right. Thanks so much for watching. Again, check out my friends over at New Focus. He’s Kerry. I’m Glenn. Please like, share, subscribe and we’ll see you next time. Awesome.

Kerry: [00:08:12] Good seeing you, brother.