The Firm has a long history of acquiring existing, cash-flowing properties. SMC began as an acquirer of undervalued highway properties around the South. Most of SMC’s acquisitions require a renovation or some type of management upgrade. These situations can vary by opportunity but typically involve a hands-on approach and execution of a detailed business plan. The Firm’s opportunistic approach typically allows for a medium-to-long holding period.
SMC Hotels has been building and developing hotels for three decades, with the Smith family itself having a history of doing so dating back to the 1930s. The Firm will opportunistically evaluate opportunities to develop, while only doing so where a clear business case exists (as opposed to building just to build). With developments SMC evaluates opportunities at a higher return threshold than acquisitions given the higher risk profile of development projects.
In certain cases, the Firm will manage third-party owned hotel properties. Only in cases where SMC feels it can add value will it take on such assignments. SMC’s existing infrastructure and platform is already set up for such projects, with the Firm operating with GAAP accounting and leveraging technology to effectively manage properties. Additionally, if the situation warrants, SMC will invest its own equity in a new third-party opportunity.
SMC practices modern revenue management techniques and processes on all its acquisition and development projects. In certain situations, the Firm will revenue manage non-owned and non-third-party managed properties. Today there are dozens of booking channels and online websites, and it requires focus and knowledge to ensure these different channels are at their highest and best price. In order to manage such an array of booking sources, SMC uses modern technology and processes.
Distressed Hotel Management
In certain situations, SMC will operate hotel properties in distress. Hotels like many other industries operate in cycles, with a strong correlation existing between overall economic growth and hotel business profitability. The principals of SMC have operated every type of hotel in every type of economic environment. Operating a hotel in distress is very different than operating under normal circumstances. An industry that normally requires master of precise details and focus requires even more focus on expenses and strategy during troubling times.
Check out this time-lapse build of one of our properties!
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