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Business Observer Monday, Jun. 3, 2019 6 months ago

Tampa hotel company mirrors larger Marriott in experience, values

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McKibbon Hospitality shares many traits, values -- and success -- with the world's largest hotel chain.
by: Kevin McQuaid Commercial Real Estate Editor

With its roots in hospitality beginning outside of hotels, familial ownership, a business model and culture that embeds service, Tampa-based McKibbon Hospitality shares many traits and experiences with another well-known lodging operator: Marriott.

Like Marriott International Inc., McKibbon traces its corporate roots back to the 1920s, when it entered the hotel business through an unlikely channel. In Marriott’s case, it was an A&W root beer stand that evolved into a chain of restaurants.

Founder John McKibbon’s family got into the service business running a Piggly Wiggly grocery store in Georgia, before opening a motor lodge on the way to managing and owning 105 hotels with about 10,000 keys today.

Both companies have strong familial ties, passing leadership from one generation to another, and maintain a strong series of “core values” rooted in service to others that shape how each is run.

Marriott’s J.W. Marriott Jr., who succeeded his father, was the company’s CEO for four decades beginning in 1972. Patriarch John B. "Jack" McKibbon Jr., now 95, began his hotel career at age 12. Today, McKibbon is on its fourth generation, with J.B. McKibbon IV joining the company in early 2018.

“We’re very much a ground-up organization,” says Randy Hassen, the president since 2012 of McKibbon’s Hotel Management arm. “And we’ve always been very community focused from the beginning. It’s just part of the culture taught to us here.”

But the similarities to Marriott, the world’s largest hotel chain, don’t stop with heritage or a shared belief system. Whether intentional or not, McKibbon’s business model has largely mirrored that of Marriott’s.

In 1993, Marriott shed ownership of its hotel portfolio by splitting the company into two distinct halves: One an operations-focused manager and the other a holder of real estate assets managed by others that continues to this day with Marriott International and Host Hotels & Resorts (previously known as Host Marriott Corp.)

COURTESY RENDERING -- McKibbon both owns and manages the 22-story AC Hotel and Residence Inn by Marriott in Charlotte, N.C.

McKibbon, which began its hotel life as a franchisee of Holiday Inn hotels in the 1970s before expanding into Marriott, Hilton and Hyatt flags, had also once owned most of its properties.

That was until a decade or so ago, when McKibbon sold off a portfolio of its hotels to Apple Hospitality REIT, Equity Inns Inc. and others to focus on third-party management.

“Each sale has funded the next generation of growth for the company,” says Hassen, a 29-year McKibbon veteran who began working with the company at a Days Inn in Athens, Ga., in 1991 — the year before McKibbon began its long relationship with Marriott when the property was converted to a Courtyard by Marriott.

Hassen declines to reveal McKibbon’s revenue or earnings, though he says the company has grown each year.

In focusing on managing, rather than owning, hotels, McKibbon turned primarily to a familiar partner — Marriott.

Today, of the 87 hotel properties the company manages, roughly 50 carry Marriott flags.

The similarities — and company growth trajectories — haven’t gone unnoticed by Marriott, either.

In 1995 and again in 2017, McKibbon was named Marriott’s “Partner of the Year,” and it has received numerous other honors from the Bethesda, Md.-based operator, including most recently the “Alice S. Marriott Award for Community Service” for work its Aloft staff in Asheville, N.C., has done.

“From the beginning, out cultures matched,” says Glenn Lewis, Marriott’s vice president of franchise operations. “Their culture and values are very similar to ours, which stresses that if you take care of your associates, they, in turn, will take care of the customer, and they will come back to your hotels again and again.

“When they began franchising with us, they wanted to learn as much as possible about our company and how we did things, and they would take our best practices and apply them to their company,” Lewis adds. “They were constantly taking notes benchmarking ways to improve, which continues to this day. I think that says a lot about their organization.”

Owners of McKibbon-managed hotels say those “best practices” have been carried throughout.

“They’ve created synergies that are difficult to replicate,” says Steven Nicholas, a principal in Atlanta-based Noble Investment Group, which has invested more than $3 billion throughout the U.S. in hotels.

“They’re very good at handling problems, in large part because they train their people with a series of processes and checklists and guidance,” Nicholas adds of McKibbon. “They treat our investments as their own in a variety of ways, which means a great deal to us.”

"They treat our investments as their own in a variety of ways, which means a great deal to us.” — Steven Nicholas, principal, Noble Investment Group

Like Marriott, too, McKibbon has grown considerably over the past several years, as transient and business travel alike have exploded in markets across the U.S.

Today, McKibbon employs 3,000, including 50 in Tampa, its headquarters since moving from Gainesville, Ga., in 2003.

To accommodate its growth, in December 2017 McKibbon opened a new 10,000-square-foot headquarters in Tampa, but it has already outgrown the space. Hassen says the company is preparing to expand into an adjacent 2,500 square feet to rectify the crunch it faces.

Much of its growth, not surprisingly, has come from taking on more — and more complex — hotel management assignment, with flags ranging from Hyatt House in Tampa and Orlando to Kimpton in Asheville, N.C., to an AC Hotel, a new and upscale Marriott brand, in Charlotte, N.C.

But in a rare departure from Marriott’s business practice, while McKibbon has focused on third-party management, it hasn’t abandoned hotel ownership entirely.

In Charlotte, N.C., McKibbon both owns and manages the 22-story AC Hotel & Residence Inn Charlotte City Center, and this summer, the company will debut the 18-story Kimpton Hotel Arras in Asheville, N.C.

There, McKibbon is converting a 54-year-old, former office building that had fallen into disrepair into a 128-room hotel with a ground-floor restaurant and condominiums on the building’s top nine floors.

“It’s by far the most ambitious project we’ve ever done,” Hassen says. “It’ll truly be a legacy-type project, one that leaves a signature mark on the community.”

Arras may be McKibbon’s most ambitious project to date, but it might not be the most ambitious the company takes on going forward.

J.B. McKibbon IV says the company will likely take on “higher quality and more complicated projects” in the future.

Hassen agrees.

“We are keenly aware of the need to own some of our own development projects to fuel our future growth,” he says. “And with fuller-service properties, the costs are more up front but there’s also more protection afforded you from other competition.”

COURTESY RENDERING — The Kimpton Hotel Arras, which McKibbon will both own and manage, will debut in Asheville, N.C., this August

Look for McKibbon to push further into markets like Atlanta, parts of Texas and Tampa and St. Petersburg for geographic expansion, and more into higher-end and distinct food and beverage offerings.

“Nothing brings people in the door more than outstanding food and beverage operations,” Hassen says.

And though much could change in the years to come, McKibbon will most certainly hold on to the Marriott-inspired heritage that propelled it forward in past decades.

“If we can hold true to the core values of the company, and keep its history in the forefront of our minds, that’s what will differentiate us,” Hassen says.

 

 

 

 

 

 

 

 

 

 

 

 

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