Monthly Archives: October 2016

Hilton Interviews Dave Hogg for Multi-Brand Developer of the Year Award

In October 2016, Kyle Henderson of Hilton Worldwide interviewed Dave Hogg, CEO of Springwood Hospitality, to prepare a press release to announce Springwood Hospitality as the Hilton Worldwide Multi-Brand Developer of the Year 2015.  Below is a transcript of that interview.

We’re sharing it with you because we think it will give you some insight into Springwood’s DNA.  Enjoy the interview!

HILTON:  Tell us a little about what factors have contributed to your success and longevity as an owner of Hilton brands.

DAVE:  Years ago we operated two lesser brands in a market where there was also a Hampton.  All three hotels were similar in design, location, and management.  Back then (a decade ago) everybody in that market shared sales information.   I’ll never forget studying the data and discovering that RevPAR at our Brand A outperformed our own Brand B by about 25%, and RevPAR at the Hampton outperformed our brand A by another 25%.  The difference was the brand.  We’ve since sold both of those hotels, and we’re starting construction of our fourth Hilton product in that market.  With products ranging from a Homewood to a TRU, our Hilton products don’t cannibalize one another, and we have become a force in the local hotel market.

Hilton’s development of the Home2 and TRU brands has enabled us to grow rapidly.  Today all of our under-construction and in-the-pipeline hotels are either Home2 or TRU.  That won’t always be the case, but we are thankful that Hilton’s cutting-edge brand development has enabled us to profitably and aggressively grow a small hotel company.  Our company would never be where it is today without Hilton’s significant contribution.

HILTON: How do you choose your locations/projects?

DAVE:  We focus within a 3-hour drive of our office, so that we can make a meaningful visit to any hotel and still be home for (a late) dinner.  Within that geography, we seek underserved submarkets with high barriers to entry.  When a broker shows us five, equally-desirable sites in the same market, we run away.  All of those sites might hold hotels in just a few years.  The market must be underserved to command our time; otherwise, a new hotel will have no reason to exist.  Our most successful hotels are in markets where it took five or more years to find our first site.

HILTON: What successful strategies do you feel really make a difference when it comes to developing any property?

DAVE:   Partner with the best brand; get the best broker, engineer, architect and general contractor you can find.  We have built relationships with firms – like Hilton – who perform, and we keep going back to them for the next project.  When the chemistry is right and you understand each other’s expectations, you’ve assembled a team that can accomplish amazing things.  Hotel development requires putting a band together; you’re never playing solo.  When every musician is up to the task, the sound is awesome.

HILTON:  What techniques have you used to overcome any challenges over the years?

DAVE:  We operate by what we call the “Springwood Essentials.” The first of these is “Do what is fair and right – always.”  Over the years we have been candid about our business, even when the news was unpleasant; folks have learned that when we tell them something, they can take it to the bank.  If we miss a development deadline or we fall short of a sales projection, we tell the truth and explain the steps we’re taking to fix it.   We do the same and give proper credit when things go really well.  In time, people have learned that’s just our DNA. Today it’s become much easier to get a necessary contract extension or some extra attention from a local municipality, because folks don’t waste energy questioning our motives.  The only reason we need written contracts is that memories fade, and written agreements remind us what we committed to do.

HILTON:  How has Hilton best served you or supported you over the years?

DAVE:  Hilton’s development team has always played their cards face-up with us, so we never waste each other’s time.  They have also made critical introductions for us that have opened up opportunities that our small company would not otherwise have had.  People impute the power of Hilton to us when Hilton’s development team helps us this way.  The outside world knows we’re not Hilton, but they also know we carry the banner of the brand.

Operationally, Hilton’s leading-edge technology, and the exceptional Hhonors program and accompanying app, give our Hilton-branded hotels a significant edge in the guest marketplace.  The worldwide power of the Hilton brand and its corporate marketing team is remarkable.  This power reduces the risk and improves the potential payback for the development of any Hilton-branded product.

HILTON:  Is there anything that, in hindsight, you would do differently?

DAVE:  I have learned the benefit of partnering with the best.  Unfortunately, that insight came decades too late in my career while I chased low price and settled for marginal performance.  Today I pursue excellence at a fair price.  This principle applies to all Springwood team members and to all outside vendors we bring to the team.  We don’t settle.  If you’re writing and producing the play, then make it a work of art you love; only the best performances sell out in advance at premium prices.

HILTON:  What else have you learned that you would most like to share with your peers?

DAVE:  The hotel business is for those who pursue it full-time so they can push the envelope on technology, sales, service, revenue management, and brands.  That’s where the profit is.  The same can be said of the retail or multifamily management businesses, and the real estate brokerage business.  We recently exited all three of those industries to devote 100% of our energy to what we do best: develop and manage hotels with excellence!

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