The Marshall Plan

The hotel industry was built through the ingenuity, fortitude and honesty of families — from Marriott to Tisch and Patel to Shah. The family-based entrepreneurial spirit is a big part of the success of Marshall Management, a 27-year-old, Maryland-based operating company.

“We're a family company, and we operate every hotel as though we own it,” says President Mike Marshall. “We think of ourselves as partners with our owners. I couldn't sleep at night if I didn't think we were doing everything possible to make the properties successful.”

2006 was a particularly good year for Marshall Management, as the company added 11 management contracts, including four in the last quarter. The latest additions included a full-service independent in Norton, VA; a closed property in Manning, SC; and two Quality Inns in Atlantic City, NJ.

Marshall has different strategies to add value to each of its new managed properties. At the Inn at Norton, the only full-service hotel in a 50-mile radius, the company is evaluating what renovations and branding will be needed. The hotel in South Carolina has a good location near an I-95 exit but has been closed for nearly two years. Marshall will reposition the property, help choose a brand for it and get the hotel ready to reopen. In Atlantic City, the properties have the same owners, and Marshall has used the time since takeover to implement cost controls, conduct training and institute marketing programs.

As reflected in its total portfolio, the properties Marshall added last year included resort, upper upscale hotels and mid-market properties without food and beverage. It also supervised construction of three new hotels, including one in which it is a joint-venture partner.

The company is currently involved in four other new-build properties in which it manages the construction process and pre-opening efforts and then operates the hotel after opening. From time to time, Marshall takes equity stakes in the properties it helps develop.

“We'll probably be involved in a lot of new-build projects in the next couple of years,” says Marshall, “but we still do a lot of distressed properties, the kind of job in which we get a call from an owner asking if we can be at the hotel tomorrow. These kinds of assignments bring out the creativity in our executive and management teams.”

The company also offers a hybrid service that falls short of full management. As Marshall says, “There is a new breed of owner who understands the importance of management but who doesn't want to give up day-to-day decision-making at their properties.”

For these owners, the firm offers a fixed-fee select service in which it provides a menu of support, including accounting, profit and loss statement analysis and other back-of-house assistance, as well as help with sales and marketing, yield management and Internet marketing.

“There are a lot of owners — mostly multi-discipline real estate entrepreneurs — who read and hear how well the industry is performing but still have problems at their lodging properties,” says Marshall. “They turn to us because while they understand that hotels are a real estate play, they also know the need for professional management to maximize the value of their assets.”

Since Mike's father, Charles, founded the company in 1980, it has operated under every major hotel flag and in most segments of the business, a fact which Marshall believes gives the company a major competitive edge.

“Operating under multiple brands enables us to merge the best practices of all the chains into one operating philosophy and set of strategies,” he says. “Yet being relatively small and hands-on gives us advantages over larger management organizations. A property managed by a large company is only as good as the regional director who oversees the hotel. There are so many layers in a big company that the regional person may not even be in tune with the corporate culture. We have one corporate culture that extends throughout the company and into all of the hotels we manage.”

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