Hispanic Hotel Owners Build a Voice
Our vision is to be the preeminent organization representing the business interests of Latinos in the hospitality industry. What is holding Hispanics back is knowledge of the industry; with corporate sponsorship, we can achieve the level of basic education needed by those Hispanic entrepreneurs who want to take advantage of the opportunities out there.”
The speaker is Angela Gonzalez-Rowe and the organization is the Hispanic Hotel Owners Association (HHOA). I recently attended the Hotel Investment Series 101 seminar sponsored by HHOA at the JW Marriott in Miami. Less than a year from inception, the organization has more than 200 members and Gonzalez-Rowe expects 500 by year end.
Gonzalez-Rowe told me of her experiences that set the former associate publisher and editor in chief of Hispanic Meetings & Travel magazine on the path to organization executive. “I attended an ALIS conference and even as a member of the hospitality/travel media, I was at a loss trying to decipher the buzzwords and the acronyms. Given the lack of Hispanic investor participation in hospitality properties, I wanted to provide the forum for such an education and the community for Hispanic hospitality entrepreneurs.”
Hotel Investment 101 was the first in a series of three fundamental educational offerings by the organization. The seminar in Miami covered the basic considerations in evaluating investment opportunities in the hotel industry:
- Overview of the U.S. lodging industry
- Investment strategies
- Development vs. acquisition
- Market, site and brand selection
- Capital sources and financing.
To attend the investor series, attendees had to represent companies that meet certain investment level requirements and have at least 51-percent Hispanic ownership.
John Keeling, senior vice president of PKF Consulting, presented an industry overview on current conditions and PKF's forecasts for the near term. Despite problems in some sectors, most notably the housing market, and despite slowed growth of the economy, Keeling emphasized that the “economy is still growing.” Furthermore, the current state of the hospitality segment is very strong with good prospects in the foreseeable future.
The industry's path since Sept. 11, 2001 was initially tough, and in relative dollars, some benchmarks are now just reaching 2000 levels. However, the industry and financial markets discovered some positives about hotel operations that bode well for the future. As opposed to other commercial investment types, noted Keeling, hotels can be market-responsive in one day: leases are on a daily basis as compared to five to 10 years for an office building or even one year for residential rentals. These are valuable lessons for newcomers to the industry to understand.
Another topic was the equilibrium of the industry. Supply and demand are in balance, and it is PKF's position that “oscillations”, e.g., first quarter 2007's drop in occupancy, are “just blips. They are often an indication of peak performance when the value or motion of a quantity is in continual change.” The central theme of the PKF report was that of a strong hotel market.
Another hallmark of HHOA's strategy is to use successful Hispanic entrepreneurs who have developed and/or purchased hotels as mentors to industry newcomers. Among those in membership and mentoring roles is Carlos Rodriguez, principal and executive vice president of Driftwood Hospitality, a Jupiter, FL-based firm with more than 7,500 rooms in North America and Costa Rica. Rodriguez left a Wall Street career to operate a family-owned hotel in Costa Rica. In 1997 he founded Cardel with one hotel; by 2001 the company had five award-winning full- and limited-service properties in Florida and a full-service beach resort in Costa Rica. A lending relationship with Lehman Brothers led him to David Buddemeyer and Driftwood, which he joined in 2003.
I also met with Alvero Cabrera, who amassed a chain of more than 250 Burger King restaurants throughout the country. In 2004, Cabrera's Heartland Foods became the largest minority franchise operator in the Burger King system. He maintains positions with the National Hispanic Franchise Association, National Franchise Association and the Florida Caribbean Franchise Association. After selling the company, Cabrera entered the hospitality field, staffing CIG Hospitality with hotel professionals; the firm has interest in both developing and acquiring franchised hotel properties.
According to an HHOA study, Latin America is at the forefront of international expansion of the hotel industry, with nearly 30,000 Hispanics having the financial resources to invest in hotel ownership. The strong industry interest in attracting Hispanic investors is evidenced by the corporate sponsorships of the group, as well as those that sponsored the Miami seminar. Those sponsorships included Wyndham Hotels & Resorts, Janus Hotels and Resorts, Carlton Hotels Worldwide, JP Turner Company, Orange REIT, Inc. and Florida International University.
HHOA plans targeted public relations campaigns to high-net-worth Hispanic individuals in various industries — automotive construction, engineering, and architecture — as well as those like Cabrera with backgrounds in franchising. The combination of soliciting membership among those interested in pursuing the opportunities and those with the wherewithal and experience to help achieve those goals is an ambitious but very timely goal.
According to the Census Bureau, Hispanic-owned businesses in the United States are growing three times faster than the national average for all firms and generate more than $200 billion in annual revenues. The bureau's recent Survey of Business Owners shows that the number of Hispanic-owned businesses in the United States grew 31 percent between 1997 and 2002 (the most recent year for which data is available) to nearly 1.6 million.
“These findings show us that the emergence of Hispanic-owned business mirrors the growth of the Hispanic population in the United States,” said Gonzalez-Rowe. “As U.S. Hispanics further establish their business presence in this country, their success will filter back to their countries of origin. This will strengthen the economic links between the U.S. Hispanic market and the rest of the hemisphere, creating a strong entrepreneurial group and a wider base of intellectual capital in the Western Hemisphere.”
According to Gonzalez-Rowe, “The three pillars of the organization and its mission are to increase opportunities for Hispanics to own, develop and operate hotels; advance Hispanic-owned suppliers serving the hotel industry; and increase management advancement opportunities within the lodging industry.”
The educational series will be offered regionally in Miami, southern California, Chicago, New York and Puerto Rico and is one of the steps in an outreach program to increase membership in HHOA and to achieve that mission by building awareness of the opportunities that exist.
Also, HHOA plans its inaugural convention for December 2007.
Stephen Taylor, CHA, is managing director for Horwath Hospitality & Leisure's West Palm Beach office offering brokerage and consulting. He has written on real estate, branding, operations and technology. Reach him at email@example.com or 561-575-6590 or visit his website at www.taylorhorwath.com.
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