Remington Hospitality President and CEO Sloan Dean is another “accidental hotelier,” one whose love of travel prompted him to choose a position with InterContinental Hotel Group over one with Home Depot early in his career as a financial analyst. “I didn’t know much about the industry besides having a love of travel, but hotels sounded like a lot more fun,” he recalled. He recently shared with LODGING his path in hospitality and thoughts on both new and continuing challenges the industry is facing. He also weighed in on his expectations of the road ahead for the industry as well as his strategies for growing his hospitality management company.
Rise to CEO
Once bitten by the hospitality bug, Dean moved steadily through a series of hospitality positions that he contended provided a solid base for his current one: “I have worked for all kinds of companies within lodging and done it all. I grew up in the revenue management sphere, before moving to mergers and acquisitions and development.” Although he expected to be a “dealmaker” for the rest of his career a decade ago, a call from a headhunter when he was vice president of business development at Interstate Hotels placed him in asset management at Remington’s parent company, Ashford Inc. He spent five years at Ashford, rising from vice president of revenue optimization and underwriting to SVP. Then, just before Ashford acquired Remington in January 2018, he was named president, and in late 2019, president and CEO.
Growth and Goals at Remington
As he enters his eighth year at the helm of Remington, Dean advocates a “slow and steady” growth strategy, taking one contract at a time and consciously avoiding mergers and acquisitions. “We continue to grow at 10 percent to 20 percent a year, a rate I consider far more sustainable and profitable over the long term,” he said. “We are very focused on performing for our current clients, first and foremost.”
Remington manages more than 140 hotels, 26 brands, and 19 independent and boutique properties concentrated in Florida, Georgia, and Texas, and is a top-five franchise operator in North America for both Hilton and Marriott. He stressed the importance of sticking with their niche as operators primarily of full-service and lifestyle hotels.
Dean said a new office in Miami was created specifically to support what is now their sweet spot for growth, the Caribbean and Latin America (CALA) region, which Dean claimed offers higher RevPAR than the United States and is second only to Europe as an outbound destination for Americans. “We now have 14 hotels in development in CALA, and by the end of next year, there will probably be more than 20,” he said.
He noted that being branded with Marriott and Hilton has proven extremely advantageous in this region, because Remington can offer an alternative to owners otherwise restricted to managing their own properties or signing a 30-year management deal with Marriott or Hilton. “We are the only third-party management company in Costa Rica that has a signed contract with a Marriott brand outside the City Express brand,” Dean noted.
A View of the Industry
Dean commented on new and not-so-new challenges being faced by hotel owners. He said interest rates are coming down, “but not fast enough,” and “although demand has recovered to pre-COVID levels, the bottom line has not. Gross profit and net operating margins are constrained by higher expenses; for example, since 2019, the cost of insurance has doubled, and labor has increased by 50 percent.”
Further dogging owners, he said, are debt maturities or refinances in the next two to three years that will likely add up to “a lot of transaction volume that will look like rescue capital situations, particularly with hotels that are not at full equity value that need to replace fixed-rate debt.” Dean also mentioned deferred capital expenditures (CAPEX) as “a secondary factor that compounds the problem, as owners who have deferred renovation face debt maturity on an asset that has not recovered in value.”
Dean doesn’t expect boom times in the industry anytime soon. “I think the pundits have it right: Domestically, revenue should grow on average of 1.5 percent to 2.5 percent over the next couple of years.” However, he added, “This will vary by market; in the sunshine states, revenue should grow between 3 percent and 6 percent, while places like San Francisco, Chicago, and Minneapolis will do worse.”
