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Third-party Management Company StepStone Hospitality Formed;
Company is a Sister Organization to hotelAVE



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 restaurant expertise.

The company’s three principals are:
 

Tom 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. 
Jim 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.
Michelle 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 Management course. 

“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. 

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Contact:

StepStone Hospitality
333 Westminster St. Suite 3
Providence, R.I. 02903
(401) 865-6901
www.stepstonehospitality.com
 

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Also See: Christine Nevers Named General Manager of the Boutique Hotel Providence, Providence, Rhode Island / June 2006
The Hotel Providence Appoints Pamela Baldwin General Manager, City’s First European-Style Boutique Hotel to Open Late 2004 / September 2004
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