Tuesday November 22nd, 2011 - 5:03PM
When hospitality veteran Jim Abrahamson walked away from his prestigious post as president of the Americas for IHG this summer to join third-party management specialist Interstate Hotels & Resorts, Inc., it raised more than a few eyebrows in the industry. Many, including yours truly, wondered why an accomplished brand veteran—whose experience includes tenures at Hilton Worldwide and Hyatt Hotels Corp.—would leave IHG after some two-and-a-half years, and on the heels of what was, by all accounts, a successful repositioning of the iconic Holiday Inn brand.
Upon taking over Interstate as president and COO, Abrahamson talked about the enormous poten- tial for growth for a firm flush with capital, as well as the ability to leverage his long-standing relationships with former franchise partners. But let’s face it, such sound bites are commonplace from incoming executives. What’s less common is when they actually deliver.
However, based on the early re- turns, you’d have to say Abrahamson is well on his way to doing just what hesaidandthensome.Earlierthis month, Interstate inked what was perhaps the deal of the year when it joined forces with Noble Investment Group to create a separate management platform called Noble-Interstate Management Group strictly to operate Noble’s 60-plus properties.
With this move, the management behemoth—which already earned the top spot in the HOTEL BUSI- NESS® ranking of top 100 Management Companies in 2011 and several years prior—increased its portfolio of properties to nearly 400 in one fell swoop. Not only that, a nine-hotel deal, several of which coincidentally will fly the Holiday Inn and Holiday Inn Express flags. (Interstate is IHG’s largest franchisee as well, not as coincidentally.) According to Interstate’s long-time chairman and CEO Tom Hewitt— who brought Abrahamson aboard and is transitioning his role as CEO to him—the deal is significant not as much for the nine properties but for the commitment it represents to growing in Europe. For example, the company in July announced plans to manage six hotels in Russia.
Of course, well before Abrahamson arrived, Interstate established a strong presence in China through its partnership with Jin Jiang Hotels. (The company is a 50/50 joint venture between Thayer Lodging Group and Jin Jiang International Holdings Co. Ltd.) While the company has established a dominant presence in the U.S., it is clearly focused on international opportunities as its next bastion of growth.
When he took over, Abrahamson told HOTEL BUSINESS® that the company expected some of its growth to be a direct result of the consolidation of smaller third- party companies. He added that it was becoming a tough business for smaller companies to compete in and no one would argue. Based on those criteria, it would appear that Interstate is in a pretty good position and Abrahamson’s latest career move seems to make all the sense in the worldnow.