COLUMBUS, OH—Many factors go into the financial wheeling and dealing of the hospitality sector. One of the most important is finding the right partner.
Held here at Eleven restaurant, in conjunction with Rockbridge RTRX, which has raised millions of dollars for cancer research, the Hotel Business Executive Roundtable “Investing in the Future: The Art of the Deal” allowed 10 industry executives to share their varying opinions on the topic. The roundtable was hosted and sponsored by Rockbridge.
“It does help when you have a partner who understands an industry,” said Rick Takach, chairman/CEO of Vesta Hospitality. “It makes a big difference. I have had partners that really didn’t understand the industry and they really wanted to learn, and it makes it very difficult. Somebody that understands the industry, somebody that has integrity, somebody that you can trust, somebody who is non-litigious because you really get to see what people are like when things get tight. So, you better have a good relationship.”
Jennifer Dakin, SVP at Wells Fargo Hospitality Finance Group, said that her company has three factors when considering a partner. “Our motto is: ‘People, Credit, Real Estate.’ You really want to do business with people who you can look across the table and strike a deal with and know that they are going to follow through on what they say they are going to do,” she said. “Then we also look at the credit quality of these people and make sure that they are adequately capitalized to handle whatever obligations that they are entering into. Then you are obviously looking at the real estate and the quality of the real estate and making sure that it’s sustainable.”
For Jim Merkel, CEO of Rockbridge, knowing who your partners are and how they behave really matters during the tough times. “Putting together the right team, the right partnership where you can look each other in the eye—you don’t have to agree on everything, but that you are going to try and do the right thing and be transparent and have high integrity—because we are all trying to do good business for our investors. We all have investors in our companies… We are trying to create sustainability. You have to consistently do good deals in order to grow and build your company. Looking around the table, everyone here has done that very successfully over the long term, and I think in large part because they care about who they do business with and what they do when they sign their name onto it.”
Look for more insights from panelists, including their thoughts on the labor shortage, brands and other issues affecting dealmaking in the Sept. 7 issue of Hotel Business.