O.H. Hospitality Secures New Investors for
2004 Expansion Plans; Timely, Accurate Financial Data Creates
Foundation for New Builds
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December 19, 2003 - When Kent Oliver and George Hovland, co-founders
O.H. Hospitality, started their company they wanted to develop hotels in
key �crossover� destinations desirable to both meeting planners and vacationing
families. Their goal was to operate in markets where the two
segments met, and leverage the markets to multiply room nights and occupancy
while softening each segment �s fluctuations. In 1997 they found
the perfect area at the western tip of Lake Superior in Duluth, Minnesota.
Known as �The San Francisco of the Northeast,� adjacent to one of the most
beautiful harbors in the country, Duluth, Minnesota, has more leisure attractions
per capita than any other similar metropolitan area, with the bonus of
being home to hundreds of businesses nearby.
Thanks to a string of solid business decisions O.H. Hospitality has
grown over 100 percent per year since its incorporation. It now operates
seven properties carrying a variety of flags with four more in development,
including one on the Florida coast. �We created a formula that is
working for our company and its investors; we are expanding our business
into new markets and experimenting with concepts we never tried before,�
said George Hovland, O.H. Hospitality�s Managing Member for the past six
years. �This spring we break ground in Minneapolis on a 200-room
full-service Radisson, with a waterpark, attached to the Earl Brown Conference
Center. The Minneapolis-St. Paul area is a great metro business market
that also pulls vacationing families from a large surrounding region.
We see it as an excellent investment opportunity.� Bringing different
investor groups together for new projects and staffing properties with
first-class professional management teams is a core competency for O.H.
Hospitality.
Internet Business Practices Aid Investors
In the past three years O.H. Hospitality learned valuable lessons at
the hands of market forces and the economy, but the company�s expansion
never slowed. �Our industry is constantly changing and we are evolving
with the environment. What we are seeing now is a trend toward Internet
business practices, both in hospitality marketing and in financial services
and investor communication,� said O.H.�s George Hovland. �To accommodate
guests� increasing Internet usage we developed a new website that provides
online booking and enhances the appeal of each property by focusing on
the nearby attractions. We also moved our accounting, financial analysis,
and investor reporting processes online as a foundation for future growth.
We are uploading property operating information to headquarters daily with
an Internet-based application called Webvue from Aptech Computer Systems,
Inc., and we centralized accounting for all our hotels on Aptech�s Profitvue
enterprise back office application. The savings in FedEx fees alone
will be $10,000 to $12,000 per year, but the real benefit is our investors�
ability to access their property financial performance numbers online anytime
from any location. Our company wanted to gain more control of its
financial product and we are applying technology as a force multiplier.�
Until recently O.H. Hospitality was outsourcing its accounting work,
but by generating and centralizing its own operating statistics, occupancy,
ADR and other performance measures in-house each day for its properties,
O.H. Hospitality is able to build P&Ls for each hotel and its investors
real-time. Hovland continued, �Now that we have automated and
control our own central accounting process we can look at each property�s
profit and loss statement anytime we want. We can evaluate where
they are expense-wise, and based on this we can recommend courses of action
to our managers. In the past we had to wait two to three weeks after
month-end close to get P&Ls to our investors; our new system shows
us revenue and expense performance at will because property information
is uploaded to us nightly.�
Performance Measurement Reporting Attracts Investors
O.H. Hospitality provides performance-based evaluations for all its
properties to drive up profitability through revenue generation and expense
reduction. �Our company�s objective is increasing return on investment
to meet our investors� expectations,� said George Hovland. �To live
up to those expectations, attract new partners, and prepare for expansion
it was essential we develop an Internet strategy that allows us to put
financial performance measures in our investors� hands on a timely basis,
not just once a month. Investors have a right to know how their assets
are performing; our new financial systems can provide that information
for any number of properties. We also use fiscal performance as one
means of evaluating our managers� abilities. Managers should be rewarded
constantly for a job well done, and that takes an acute awareness of what
is going on with the property�s finances. We reward our managers
on performance with profit sharing packages when goals are met. Performance-based
evaluation should be part of everyone�s management style.�
Each of O.H. Hospitality�s properties is different, and each has a separate
mix of investors. For several years the company used its own internal
chart of accounts that did not follow the customary accounting practices
for hospitality but worked for the company�s unique structure. With
their new accounting systems, one of the first things O.H. did was create
a chart of accounts for its properties that is consistent with hospitality
industry accounting standards. �All our hotels have separate joint
venture ownership, with the unifying financial factor being Kent Oliver,
a co-founder of the company and partner in all of our properties,� said
Hovland. �Kent built partnerships that include bankers, real estate
developers, and private individuals. As we grew we knew we would
have to upgrade our accounting and financial reporting to keep our investors
happy and allow us to add properties. The Web-based accounting solutions
we are adding will streamline our operation and give us the ability to
attract new ownership groups and assets as we move forward.�
Focused corporate management practices and market positioning are foundational
to O.H. Hospitality�s success and expansion. The Duluth-Superior
area has a huge leisure market from June through October because of its
urban attractions and the area�s abundant natural resources and outdoor
sports. The company built its flagship hotel, the 107-room
Hawthorn Suites, within the walls of the historic Marshall Wells warehouse
in Duluth, at one time one of the largest hardware distribution centers
in the US. The property�s conference rooms and indoor pool have contributed
to making it a favorite with corporate travelers. Among its other
hotels O.H. Hospitality also owns and operates Barkers Island Inn and Conference
Center on the shores of Lake Superior, and The Suites at Waterfront Plaza,
also located within the Marshall Wells warehouse, which includes a business
center and conference rooms to serve its growing corporate segment.
About O.H. Hospitality
O.H. Hospitality, LLC. is a mid-sized regional hotel management company
located in Duluth Minnesota. Established in 1997 by Kent. A. Oliver
and George Hovland III, O.H. Hospitality, LLC. has over 75-years of experience
in motel development and operations and 30-years of commercial development
expertise. O.H. Hospitality operates motels in both Minnesota and
Wisconsin including limited service, full-service, franchised and independent
motels. Both national and international franchise companies have
recognized O.H. Hospitality motels, and its managers, for numerous awards.
Some of which including Quality of Excellence Award by Holiday Inn Express
& Suites (Intercontinental Hotel Group), Most Improved Hotel and Sales
Growth Awards by Country Inn & Suites (Carlson Company) Quality of
Excellence Awards by Hawthorn Suites (U.S. Franchise Services), and General
Manager of the Year by Hawthorn Suites (U.S. Franchise Services).
Aptech
Computer Systems, Inc. is known for valuing human relationships and evolving
technology offerings as the market dictates, a commitment that has earned
the company 100% customer loyalty of its 700 users over the last three
decades.
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