HEI began as a small hotel investment and management company in the late 1980’s and has evolved into an industry-recognized and highly-respected Owner/Operator. HEI’s fully integrated Owner/Operator approach creates a powerful investment platform, driven by excellence in operating results that yields substantial real estate value creation. There are several ways to measure the success of a hotel management company; HEI is a leader in the following five critical areas:
Expense Margin. HEI’s detailed, productivity-based approach to expense budgeting and operations compliance combined with proprietary tools and training has resulted in our hotels achieving superior operating margins in the industry. A 1% change in Expense Margin over a 5-year hold period (at 65% leverage) results in a 250 basis point improvement in IRR. Beginning with the underwriting process, where HEI has found (on average) 380 basis points of Expense Margin improvement opportunity. The operating team frequently exceeds the underwritten expense savings, a testament to this continuous improvement.
Market Share. A 1% change in Market Share over a 5-year hold period (at 65% leverage) results in a 100 basis point improvement in IRR. HEI leverages its depth of experience across the four major brand families combined with detailed customer segmentation analysis to identify Market Share growth opportunities during underwriting.
Associate Satisfaction Scores. HEI has consistently achieved industry-leading associate (employee) satisfaction scores, well above the peer set of comparable hotel companies. Associate satisfaction is a cornerstone of HEI’s approach to operating hotels and is a critical component to help drive the aforementioned Expense Margin and Market Share gains. To ensure full alignment of focus across the portfolio, a portion of each hotel general manager’s incentive plan is based on achieving associate satisfaction scores that are much higher than industry average.
Guest Satisfaction Scores. Critical to strong Expense Margin and Market Share growth is achieving “appropriate” guest satisfaction scores. Through extensive associate training and targeted capital improvements, HEI routinely exceeds guest expectations while maximizing Expense Margin savings. The strength of HEI’s guest satisfaction scores creates value by driving favorable franchise fee terms from strong brand relationships.
Industry Reputation. Over the last decade HEI has become one of the largest Full-Service independent lodging operators in the US. During this time the firm has strengthened existing relationships and forged new ones. As evidenced by HEI’s current operating relationships with LaSalle Hotel Properties, Chesapeake Lodging Trust, Pebblebrook Hotel Trust, Cornerstone Real Estate Advisors and Starwood Capital Group among others.