Like most lodging companies, Waterford Hotel Group has mostly rebounded from the hotel industry recession that started in the second half of 2008. The Connecticut-based operator of nearly 30 hotels in nine states reacted quickly to minimize damage from the downturn and get its diverse portfolio of properties back on track.

We recently chatted with Waterford President and COO Rob Winchester for a glimpse at the firm’s strategies to rebound from the industry’s hard times. Winchester, who oversees all aspects of ongoing operations for the company, joined Waterford in 1990.

When the downturn hit, how did Waterford react from both a corporate point of view and on the property level?
We adopted a position that nothing was sacred. We went down everything line-by-line. If we believed cutting something would adversely affect guests, we kept it. Other than that, everything was on the table. In some cases, where owners had refinanced or had debt service issues, we needed to get closer to the bone to survive. We instituted a wage freeze that went on for a year and a half, and we reduced our matches on 401k plans. The wage freeze has been lifted now.

What was your approach in sales and marketing?
In a sense it’s an easy area but also a more difficult one. We looked at where we were fishing. If the fish weren’t there we didn’t put resources against those areas. This year we’ve put more resources into sales than last year. We’ve maintained and increased our training programs for our sales team because as we come out of this we want to make sure we’re on the right side of the curve. We also spent money on sales software upgrades so we’re more efficient in our approaches to sales and the reporting back on the sales.

How else did technology have a role in your strategy?
We looked at technology to help us in certain areas, more so in the efficiencies of how we do business. An example is labor analysis. The data exists, and we needed to make sure it is in front of our GMs to help them manage labor accurately. Back in the fourth quarter of 2008 and through ‘09, we reworked our operating model, which resulted in flattening the organizational structure in select service and even more so in full-service hotels.

About a third of Waterford’s 30-property portfolio is in the full-service segment, such as the Mystic Marriott Hotel & Spa in Groton, CT.

The more information GMs can get at their fingertips to help them manage within the month, the less time they have to spend forecasting. They can be more strategic as opposed to being a compiler of data. We have some GMs who are good at Excel, but I don’t rate them on their Excel skills; I rate them on their profitability and market share.

Now that performance has improved, are the brands starting to put the pressure back on properties to do upgrades?
Not yet, for the most part. Many of them have done it the right way, although it is different at each brand. While a six-year refresh standard may not make that much sense in a corporate market, it might make a lot of sense in a leisure market, where you typically have more damage to your assets.

And if your guest service scores are doing fine, there isn’t a lot of reason [the brands] should pressure you. There has been a pretty good balance, although there are some exceptions to that. A couple of brands lost sight of the fact we were in a recession and came out with forced PIPs that made no sense at all. Other brands understood it and have been reasonable. We’ve pushed some stuff so deadlines are coming up in 2012 and we plan to do what’s necessary.

How was the past summer season and how did it compare to your expectations?
We were pleased with the performance of our portfolio of hotels for the summer season. Although they have not yet returned to historic levels, we saw a noted improvement from the same period last year. Our hotels were helped by tourism dollars spent,
and there continues to be a trend of travelers staying closer to home and taking more regional/close-proximity trips for shorter time periods.

What is the outlook for 2012?
The remainder of 2011 looks positive and we will finish ahead of last year. We expect RevPAR in 2012 will be better than 2011, but our [forecasted] range of percent increase will be wider due to present macroeconomic uncertainty.

What’s ahead for Waterford?
We have a 49-room high-end historic inn on a college campus owned by the college that’s under a $14 million-plus renovation. It’s what they call 100-year construction: They’re putting stainless and copper behind the walls and slate on the roof. It makes it interesting and creative for us. One of our third-party owners is building a Courtyard in Pennsylvania. It’s under construction and will open in the beginning of 2012. We put a development project that was on the back burner up close to the front burner. For the past eight to 12 months, we’ve been speaking to a number of equity groups looking to invest in the hotel segment. We’re looking to identify one of those groups to partner with us to take advantage of what is an historical low point.

Everyone agrees there are opportunities, but the supply and demand for transactions is at a funny point now. There is a lot of capital chasing a few deals. We’ll see more transactions and some of the capital used up. So there should be some opportunities to jump in.

Any advice for other operators?
We’re looking to grow and have our hands on every lever in the operating hotels to make sure they’re as efficient as possible. When you’re in a good cycle, the perception is you’re always going to go up; when things are bad you think things will always be bad. It will be back up, and there may be a new normal but it is a cycle. Hold on and maintain your integrity and keep your nose to the grindstone and you’ll get there.

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