PROVIDENCE, R.I., April 9, 2009 — An elite group
of senior hotel and restaurant officials with more than 90 combined years
of operating and asset management experience today announced the formation
of a new third-party management company to operate upscale boutique and
branded hotels and resorts. Called StepStone Hospitality, the company
is a sister organization to Hotel Asset Value Enhancement, Inc. (hotelAVE),
one of the nation’s largest hotel real estate advisory firms specializing
in hospitality asset management and due diligence.
StepStone will focus on hotels of up to 400 rooms,
with an emphasis on urban and premium suburban boutique and branded properties
located in the eastern half of the United States. StepStone currently
operates The Hotel Providence, a luxury, Four Diamond, boutique hotel in
the heart of Rhode Island’s state capital and has had management oversight
of luxury to three-star properties in Boston and New York. The company
distinguishes itself from other third-party management companies with a
strong emphasis on strategy and asset management and unparalleled, in-depth
The company’s three principals are:
Russo - CEO & President. Tom's management experience encompasses
restaurants, lodging and consumer goods. He brings strategic leadership
expertise to the company, always able to gain the support and trust of
the appointed field management and their focus on extracting profit from
sales realized. Tom’s enviable career started with Howard Johnson's, moving
steadily over 20 years to President of Restaurants and Hotels. Moving on
to Ponderosa as president, he oversaw over 800 restaurants in the U.S.,
Puerto Rico and Canada. In 1989 Tom was named Chairman and CEO of Hanson
Industries Housewares Group, a conglomerate with over 200 companies in
the U.S. and abroad. 1994-97, Tom’s titles were Chairman, CEO and President
of Miami Subs. Then, to 2003, he served as CEO of American Hospitality
Concepts, Inc., privately held and owned by Boston Ventures Fund V and
Tom. The company operated and franchised 145 casual dining restaurants
in 24 states and Canada. Tom has a Bachelor of Science degree from Fordham
University. He also received a Dr. of Business Administration in Foodservice
Management Honoris Causa from Johnson and Wales University.
McGrath, Chief Operations Officer. For over 25 years, Jim’s success
has been associated with nearly 250 hotels and resorts. He has maximized
profits with all industry assets types, including 4-star resorts, large
urban convention and boutique hotels, upscale suburban properties and select-service
and extended-stay assets. Included have been both independent and major
brand hotels - including Marriott, Hilton, Starwood, Intercontinental and
Wyndham. Several of his managed portfolios saw $500 million in annual revenues.
He has overseen renovations at over 100 hotels, totaling $1 billion in
investments. Prior to joining StepStone, Jim was Officer/V.P. of Hotel
Operations for Lodgian, responsible for 50 hotels. He has successfully
served in senior level executive positions with Interstate Hotels, Meyer
Jabara Hotels and Oceans Resorts. Jim was also owner-operator of his own
property for several years. His remarkable career began with Bristol Hotels
& Resorts, lasting 16 years and including Vice President of Hotel Operations
for 65 properties. He is a graduate of the School of Hotel Administration
at Cornell University.
Russo, partner and founder & President, Hotel Asset Value Enhancement,
Inc. hotelAVE is one of the largest hotel real estate advisory firms in
the U.S., specializing in asset management and due diligence, with a client
portfolio valued at over $1.5 billion. Michelle’s focus is on devising
and implementing strategic business plans, management contract negotiations,
and directing repositioning. Having managed a $500 million hotel portfolio
for John Hancock Mutual Life Insurance, she improved profitability and
repositioned the portfolio to achieve 20% cash-on-cash returns. Michelle
is a member of the ULI Hotel Council and was a five-year board member and
two-term President of the Hospitality Asset Managers Association (HAMA).
She had also spent 10 years conducting real estate appraisals and feasibility
studies for over 500 U.S. hotels and garnered capital markets’ experience
as a stock analyst. Michelle has appeared as an industry expert on CNN
and CNBC. Her widely followed, “Top 15 Urban Markets Report,” was published
in The Real Estate Financial Journal and Real Estate Review. Michelle is
a graduate of Cornell University's School of Hotel Administration, is a
frequent guest lecturer and was Professor of the school's Hospitality Asset
“We created StepStone to respond to specific requests
from a number of institutional and private investors who wanted strong,
hands-on operations by senior leadership, world-class strategic asset management
and food and beverage expertise to generate the highest possible hotel
investment returns in all phases of the economy,” said Thomas Russo.
“The missing ingredient in most third-party management is a strategic mind-set.
In addition to on-site management, which focuses solely on day-to-day operations,
every StepStone-managed property has a highly experienced regional support
team that focuses on strategy. That team oversees only a limited
number of hotels, and each team has an asset manager who is a true owner’s
representative. That person is responsible for benchmarking and constantly
seeking new ways to further enhance the operation and returns.” The
company has the ability to co-invest with owners, as well as bring multiple
tranches of equity to projects.
StepStone is one of only a handful of management
companies with in-depth expertise in the successful operations of restaurants,
including concepting, menu design, operating systems and chef selection.
Restaurants operated by the principals, both in-hotel and free-standing,
have won numerous individual unit and chain-level awards for excellence.
The company’s Aspire Restaurant at The Hotel Providence currently reigns
as Best Bar Restaurant in Rhode Island.
The company’s operating culture treats restaurants
as discrete profit centers rather than a hotel amenity. “Restaurants,
historically, are treated as a loss-leader by most hoteliers,” Tom Russo
said. “We take the opposite view and believe a hotel restaurant should
stand on its own as a meaningful profit center. Most hotel operators
don’t concentrate on restaurant basics, like creative marketing or closely
monitoring the food costs for each meal period. Margins are obviously
not as high in hotel restaurants as they are in the rooms division, but
with quality management, they can earn a meaningful return on investment.
We provide that management.”
As a full-service hotel management company, StepStone
will offer a complete range of services such as brand relations, technology,
legal, risk management, purchasing, accounting, sales and marketing, revenue
management, human resources and capital expenditures.
“This is a pivotal time for hotel owners,” McGrath
said. “This year will be the toughest in decades, with forecasters
projecting a double digit decline in revenue. During uncertain times,
hotel owners and investors seek seasoned operators to oversee their assets,
managers who have the right combination of strategy and tactics to generate
revenue while controlling costs and increasing market share. Our
in-depth operational expertise with a strong emphasis on strategic asset
management gives us a meaningful competitive advantage.”
Headquartered in Providence, Rhode Island, StepStone
Hospitality is an independent, third-party hotel and restaurant management
company with an emphasis on urban and premium suburban, full-service, three-
and four-star hotels, as well as resorts and premium-branded focused-service
hotels. The company also has in-depth expertise in independent restaurant
management, ranging from fine dining to casual dining. Additional
information about the company may be found at www.stepstonehospitality.com.