|Richard Kessler is a dynamo. He worked with Cecil Day to
build and sell Days Inn and is well underway in building a new themed hotel
empire. He is looking for top people, capital and locations. With eight
Grand Theme Hotels, he is expanding to the West Coast, New York and other
So in 1993, I decided themed boutique hotels would be my new quest. At the end of my term as CEO at Days Inn, I had experimented with creative themed lodging, and - completely separate and apart from the Days Inn product - we designed and built an "old Savannah"-themed, 134-room boutique hotel full of antiques, fireplaces and old paintings. Our success with it convinced me in 1993 that there was a growing discontent with expensive vanilla "commodity" hotels. In the upscale market, customers wanted something new, creative, different, personal and entertaining.
Butler: So that is when you started
the Castle in Orlando?
Butler: Richard, you are one of a few visionaries who have focused on boutique hotels. (Kimpton and Schrager also come to mind in the boutique genre). What is your approach on this niche?
Kessler: Yes, Kimpton also began experimenting in this niche in the 80's as I did. They seem to focus more on smaller, urban projects with more renovation of existing buildings. Ian Schrager has focused in the high intensity urban locations (New York City in particular) and creates a very contemporary style of boutique hotels focused on the "young and beautiful" or "hip" market.
Our approach in Grand Theme Hotels is different. Each of our hotels
has a theme. We adapt each theme to the particular location and market.
We develop entertainment themes for the upper-end tourist markets, and
boutique and Grand Bohemian themes mainly for the upscale business market.
We look to replicate our success to date with good locations, excellent product design, consistent high quality service, creativity and attention to detail. I have built a very capable team of "Grand Performers" that carries our projects from concept through operations.
Butler: You engineer your own successes with creativity and relentless attention to high quality. What are the challenges you face?
Kessler: There are two major challenges in this industry - finding the best people and finding capital. Experienced developers can always find excellent opportunities. That is not the problem.
Building and developing a team of the best people is probably the most difficult, particularly if you have high operating standards as we do. But close behind that challenge is finding adequate capital to control the real estate.
In our current structure, we are real estate investors. Our typical deal size ranges from $10 million for a 100-room, 3-star boutique to $50 million for the 250-room Grand Bohemian. With 20% to 30% equity (and more) required for each project, a private company like ours consumes equity very quickly in our expansion mode. We are presently working through our investment bankers to secure investment partners to invest with us in our expanded development and acquisition program.
Butler: What lies ahead?
Kessler: I am always looking to the future to find new ways to satisfy my interests and creative drive. I must admit I have an intense passion for what I do. The organization, development and operational skills needed tax even a 30-year veteran like myself. Creating unusual and profitable concepts is the most enjoyable aspect of my work. Working with architects and designers to make an idea come alive is a very exciting experience. As I look to the future, hopefully my son and daughter, who will graduate from Cornell University Hotel School this year, will one day play an important role in continuing to meet the travelers' needs in highly creative and unique ways. One day soon, I want to develop in California and New York, and later, theme resorts and then international hotels. America is a great place for opportunity, and I look forward to a continued exploration of new ideas to meet the travelers' needs and create happiness.
Butler: You also have a reputation as something of an art collector. How did this get started and where does it all end ... opening an art gallery?
Kessler: Yes, I've been a collector since childhood, but I began serious collecting of furniture, art, clocks, sculpture, glass, etc. in my mid 20's. It has served as a great learning experience and an opportunity to meet some very interesting people. In general, some of my most intriguing acquaintances and friends are artists. Their creativity certainly has encouraged me in my development of unique hotels.
Since I have collected sufficient art (my wife would say "excessive") for our home, the hotels are my venue for continuing my collecting and putting the beautiful collection to a practical use that I can share with our hotel guests. It also allows me to sponsor some very good regional artists. The hotels are my art galleries!
The Global Hospitality Group(r) is a registered servicemark of Jeffer, Mangels, Butler & Marmaro LLP
Jeffer, Mangels, Butler & Marmaro LLP
web site: http://www.jmbm.com
Email Jim Butler at [email protected]
Jim Butler at the Firm
Jeffer, Mangels, Butler & Marmaro LLP
2121 Avenue of the Stars
Los Angeles, CA 90067
The premier hospitality practice
in a full-service law firm
|Also See:||Stephen Rushmore's Industry Trends / Top Markets, Predictions & Opportunities / Jan 2001|
|Outlook 2001: A Roundtable Discussion The Global Hospitality Advisor / Jan 2001|
|Perspectives on Hotel Financing in 2001; Jim Butler, JMBM's Global Hospitality Group Chairman, Interviews Two Active Players in Hotel Finance / Jan 2001|
|Robert J. Morse: Millenniumís New President / Interview with GHG Chairman Jim Butler / Nov 2000|
|Special Reports / Jeffer, Mangels, Butler & Marmaro LLP|