Sandpiper Hospitality All-In on Growing Its Extended-Stay Hotel Portfolio
READ ON COSTAR.COM
By Dana Miller
Hotel News Now
April 1, 2022 | ATLANTA — Sandpiper Hospitality is focused on growing the number of extended-stay hotels in its management portfolio, including by partnering with Wyndham Hotels & Resorts to manage 25 hotels under its new, unnamed extended-stay brand.
Founded in 2012, Richmond, Virginia-based Sandpiper Hospitality has built its foundation around being a top leader in managing extended-stay hotels.
Speaking during a break at the Hunter Hotel Investment Conference, President and CEO Jim Darter described the extended-stay segment as “ripe with opportunities.” Of the 53 hotels that the company manages today, 52 of them are extended stay.
The allure of extended-stay hotels is due in part to the resilience and risk adversity that the segment has demonstrated during the COVID-19 pandemic.
“Over COVID … our hotels really didn’t hurt that much,” Darter said. “The first couple of months were iffy but then it returned. By the time we got to June of 2020, we were beating 2019 numbers already. Since then, it’s been nothing but upside.”
Sandpiper Hospitality’s management portfolio started with extended-stay hotels in the economy segment, then ventured into midscale and is now introducing higher-scale properties.
Darter said Sandpiper Hospitality’s foundation is also built around being an entrepreneurial company, focused on what it can do itself; however, its most fruitful partnerships have been and continue to be with hotel brands.
He said the company exponentially grew between 2018 to 2020 in terms of number of hotels and revenue of its hotels percentage-wise.
“We don’t have thousands of hotels but [we went from] 17 hotels to 53 in the past couple of years, and we’re doing that largely through third-party management [contracts],” he said. “About a third of our portfolio now is third-party managed. We have some amazing clients that sing our praises and we sing their praises.”
Wyndham Hotels & Resorts announced on March 22 its new economy extended-stay brand, operating under the working title “Project ECHO,” with Richmond-based real estate investment trust Sandpiper Lodging Trust taking on construction of 25 of the first 50 new-build projects. The brand plans to have at least one of those open in the next 12 months and has one in review now. Sandpiper Hospitality will operate those 25 hotels, while another group will take on the other half.
Sandpiper Hospitality manages the entire portfolio of its affiliate, Sandpiper Lodging Trust, as well hotels for unaffiliated third parties. Darter said this is his company’s first partnership with Wyndham.
The relationship with Wyndham grew over the past few months.
“We worked very closely on helping them design the brand. They’ve been incredible listeners, collaborating with us from a design standpoint and the operating standards standpoint,” he said.
“We look at it as a brand new relationship not only to develop hotels but for Sandpiper Hospitality to manage more and more Wyndham properties,” he said.
His company currently has four Wyndham-branded hotels that it plans to open for a third-party client in the next few months, including a La Quinta and Hawthorn Suites dual-brand.
Choice Hotels International also has been a valuable partner of Sandpiper Hospitality, he added.
Sandpiper Lodging Trust acquired two WoodSpring Suites extended-stay hotels in February in Orlando, Florida: WoodSpring Suites Orlando Clarcona — Maitland for $6.5 million and the WoodSpring Suites Orlando Clermont — Minneola for $8.5 million, according to CoStar property data. Sandpiper Hospitality manages both.
Darter said Sandpiper Hospitality likes to manage hotels in the Sun Belt region.
“Almost everything that we’re working on with third-party clients is [in] Texas, Florida, the Carolinas and some spots in between. We feel really good about the west coast as well,” he said.
Internal relationships and company culture are also a top priority for Sandpiper Hospitality.
Darter said he noticed that associates at his hotels desired a way to do more within the communities they operate in. As a result, the company launched its “Do More Good” community service platform in 2021.
As part of that program, Sandpiper staff have donated 600 hours of community service work and have put together care packages. Employees at all of the company’s hotels are able to hold events for charities in their area that need help.
“This is a win-win, where our associates win because they take part in something that they care about … and it creates, as well, a little bit more stickiness for our organization — for [staff] to say, ‘I’m part of a company that cares,'” he added.
Influencing Hospitality Students
Sandpiper Hospitality believes in training, mentorship and career development, Darter said, which is why his company became affiliated with Virginia Tech’s hospitality school this past year and launched a student training program.
The company brought on its first student apprentice to take part in a formal training program across the country, spending time at the corporate office as well as its hotels. Launching this program during the pandemic helped to give students options for real-world experience, Darter said.
“We are going to be able to provide [the apprentice] a general manager position one year [after] coming out of hospitality school to run his own hotel,” he said.
The program allows students to find their niche and passion by trying different departments within the hotel, he said. The company has just brought on its second apprentice, who so far is gravitating toward revenue management, he said.