Winston Hospitality's development division operates under the direction of Bob Winston.
Strategy and Process
Winston Hospitality's ground up development philosophy is based on an opportunistic strategy of developing hotels in markets that exhibit restrictions on new supply, competitive hotel RevPAR when compared to national averages, and/or RevPAR growth in the preceding two years that exceeds the industry for the same period. Generally, the Company seeks to target markets that are either: (1) emerging, high-growth areas where the Company is able to acquire a competitive advantage through superior visibility and access to demand generators, in addition to enjoying advantageous proximity to retail, entertainment and other support services; or (2) maturing markets where the competitive hotels exhibit economic obsolescence. In either case, the Company pursues opportunities to develop premium brands, typically under the Marriott, Hilton, IHG, and Starwood flags due to their proven ability to earn significant market share.
Throughout the development process, Winston Hospitality achieves superior execution by assembling the right development team and by orchestrating each aspect of the process from conception through asset disposition. The Company draws upon its extensive network of brokers, owners, franchise representatives, managers, investors, lenders, and market consultants to generate development opportunities. Once a site is under control, the Company assembles and coordinates the due diligence team, including legal, engineering, testing, construction estimating/budgeting, management and market consultants. The Company draws upon its historical database for budgeting development costs and operating projections, which are always supported by an independent, third party market analysis. Additionally, design and construction is performed by independent, third party architects, engineers and contractors, as coordinated by the Company. The company then selects and coordinates the efforts of the management team in conjunction with the general contractor through the pre-opening phases of construction. As the development process nears end, the Company deploys its asset management team which directly oversees hotel staffing, marketing plans, operating budgets and capital replacements.
The Company's extensive development process is summarized as follows:
- Identify site
- Negotiate acquisition contract with extended due diligence periods
- Obtain third party feasibility, environmental, geotechnical, title and design studies
- Develop initial 5 year operations budget and construction budget
- Draft preliminary drawings; prepare for and complete entitlement process
- Engage architect and engineers for complete plans and budget
- Arrange franchise license
- Conduct and complete interviewing and bidding process for contractor
- Establish "pert" chart for the scheduling of all building phases
- Commence construction
- Provide extensive construction project management services
- Begin pre-opening process approximately 120 days prior to completing project
- "Punch out" final building and obtain a certificate of occupancy
- Open the hotel for business
Rehabilitation / Repositioning Expertise and Process
Winston Hospitality's rehabilitation and repositioning philosophy is similar to its development strategy. Generally, the Company seeks supply constrained and/or growth markets with the added requirement that total acquisition and renovation/rehabilitation costs should be no more than 85% of estimated replacement cost. The Company's process for acquiring and repositioning or rehabilitating assets is very similar to the development process in terms of sourcing opportunities, assembling and orchestrating the right development team, managing the construction process and asset managing the asset through disposition. Moreover, the Company learned the pitfalls involved in hotel rehabilitation early on and has incorporated systematic changes in its rehabilitation processes to address those risks.