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3 Denver hotels share lessons learned as they hit major milestones

Dave Farmer Uncategorized

Originally appeared in Denver Business Journal in May, 2019


In Denver’s quickly growing hotel market, where some 7,000 new rooms have opened over the past two-and-a-half years, it’s no longer good enough to just offer a quality lodging facility to attract and retain guests.

As three prominent hotels in and around downtown Denver — each of whom has gained national attention — reach milestone anniversaries this year, their operators each have stories to tell about how they have swerved, adapted and put forth their unique properties to get there. And their leaders all sat down with the Denver Business Journal over the past three weeks to offer some insight into their success.

Hotel Teatro — 20 years

In a city now teeming with boutique hotels, Hotel Teatro was the original — the former Denver Tramway Co. headquarters turned into an independently owned 110-room facility that quickly grew into a lodging spot for celebrities playing concerts or getting their time on stage in the Denver Center for the Performing Arts that sits across the street. At the white-tablecloth restaurant, Chef Kevin Taylor served up high-end meals, and locals and out-of-towners alike were drawn to this unbranded experience in the heart of a booming city.

But as independent boutiques became closer to the norm than an outlier in the Denver market over the past five years especially — think The Crawford, The Maven, Halcyon – A Hotel at Cherry Creek — leaders at the Teatro knew they couldn’t rest on their original laurels or unique situation. Taylor closed his eponymous restaurant five years ago and the Teatro brought its food service in-house, opening The Nickel, a high-end restaurant known for experimental seasonal dishes and barrel-aged spirits. In early 2018, San Francisco-based owners Dinapoli Capital Partners funded a $2.5 million renovation that added amenities like 50-inch TVs in the largest makeover in hotel history.

Still, the Teatro has no loyalty-rewards program affiliation, and its event space is much smaller than many other downtown hotels, leaving it at a disadvantage for attracting group events. It doesn’t have the marketing budget of competitors and, at 85 employees, is one of the smaller-staffed hotels in the Denver area.

General manager David Coonan, who took over day-to-day operations four years ago, has used the small size and the lack of corporate oversight policies to stay nimble and to experiment with draws that many name brands couldn’t turn around so quickly. For example, when his food-and-beverage staff began seeing the rising popularity of CBD, a non-intoxicating compound extracted from cannabis, it quickly developed two alcoholic-drink recipes using CBD for The Nickel and saw them become wildly popular as the first such drinks available in the downtown bar scene.

“There was no chance we could have done that” if owned by a publicly traded company, said Coonan, who spent 22 years with Hyatt Hotels Corp. (NYSE: H) before coming to the Teatro. “If there’s a trend in the market, we can get out ahead of it. … We have that freedom to operate here completely independently.”

And while the sales team continues to pitch the historic nature of the hotel when they attend national conferences — it’s on the National Register of Historic Places — they also seek out targeted smaller group business, selling organizations on the individual attention offered by the staff. Education and legal groups continue to frequent the space, and at a time when occupancy is on the decline at most downtown hotels because of the increase in rooms available, the occupancy percentage at the Teatro is actually on pace for growth this year.

“We have to work hard at it every day,” Coonan said. “But just being a really engaged hotel is what gives us our advantage.”

Renaissance Denver Downtown City Center Hotel — 5 years

While Stonebridge Companies’ plan to open a Renaissance hotel downtown in 2014 wasn’t even unique to Denver, its decision to convert the 98-year-old Colorado National Bank building into travel lodging drew all sorts of gawking attention. For several years, general manager Michael Damion said, the unique structure — lined with the historic work of muralist Allen Tupper True depicting Native American life at the turn of the 20th century — generated traffic almost by itself, whether from guests seeking a true Denver experience or tourists wanting to stop inside for a drink and meal.

But even as the hotel’s revenue, profits and market share has grown every year of its existence — its revenue per available room (RevPAR) has been escalating at a steady pace of 2 to 2.5% and projects to continue doing so for the next few years — the leadership team knew they had to do something to keep the experience fresh. So, in addition to diving into some renovations before the usual seven-year window hit (they just added 55-inch TVs to all 230 guest rooms this month, Damion noted), they sought ways to accentuate far more than the overnight-stay experience.

Michael Gayle — the hotel’s “lead navigator” or concierge — offers guided tours of the property, both for drop-in visitors and as part of deals that guests can purchase along with drink and food packages. The extensive lobby that features the murals now hosts weekly entertainment, a monthly artist series and a monthly “Learning Chef” event where cooks from the hotel’s restaurant, Range, demonstrate their modern-western techniques.

And, as such, the Renaissance becomes more than just a hotel, offering non-monetary incentives for leisure travelers to choose it over nearby unique lifestyle hotels or to book it for a business trip.

To spread the word about such amenities, Damion has hired on a public-relations firm that provides the hotel an active presence on social media. And it’s developed relationships with local businesses and even the Denver Center for the Performing Arts to bring in the lunch and dinner crowds — Range has no problem pulling in 100 to 120 covers for a mid-week lunch — and emphasize its service aspect.

Damion, who spent many years in the Washington D.C. market, is not hedging on his hotel’s growth potential, even as the downtown market becomes fuller and national economists warn of a looming recession. He believes cultivating a unique place will help it weather any storms ahead, just as it has for the past half-decade.

“This market is exploding, and it’s becoming a first-tier city,” he said. “We don’t really see that stopping for the next couple of years.”

The Ramble Hotel — 1 year

In time, people may say it was a no-brainer that developer Ryan Diggins open a 50-room boutique hotel on the edge of the River North Art District neighborhood that had exploded with restaurants and breweries but never been home to a full-service lodging facility as of May 2018. But at the time he decided to move forward with The Ramble Hotel at 1280 25th St., he faced so many skeptics that the atmosphere practically dictated that he run the upscale hotel himself, so that he could put into place the details he believed would make the hotel stand out.

A big part of that came in the design of the building, allowing for it to reflect the urban-chic sensibilities of the neighborhood without being so spartan that people felt they were staying in one of the converted warehouses that surrounded it. While he thought the independent facility would be leisure-heavy because of this — and it nears 100 percent occupancy on most weekends — he’s found a surprisingly robust mix of business clients that have taken to the technology and feel of The Ramble.

He also refused to drop room rates in order to attract guests in the early going, believing that he would not be able to create the long-term reputation of the hotel if he engaged in the same “race to the bottom” in which he sees other downtown-area hotels participating when their occupancy rates appear poised to dip. The average daily rate has remained around $259 even during leaner weekdays, and by the end of the second month of operations, revenues had stabilized to the point where management felt comfortable with the model.

Diggins also bet heavily the food and beverage amenities in the small hotel not only would be needed to add non-guest revenues to its bottom line but that they could be done in such a way that The Ramble would attract both local and national attention.

After convincing legendary New York bar Death & Co. to open just its second location in its facility, he invested in a press tour of New York City, generating articles about the hotel that have helped to bring in significant numbers out-of-state guests. And then he turned around and waited several months for the opening of Super Mega Bien, a pan-Latin dim-sum eatery from attention-attracting chef Dana Rodriguez that has solidified a local crowd while also giving visitors to the area a location that is attached to the hotel at a time he estimates that two-thirds of the incoming traffic to Denver is based around eating or drinking somewhere in particular.

“I have no doubt that’s what’s driving our weekends. People want to come and check this out. The hotel is just a part of the whole thing in Denver,” Diggins said. “When you walk through the doors, there is a sanctuary of escapism.”

Finally, rather than looking to grow partnerships or license the name of the hotel, Diggins has spent the first 12 months of its existence focusing on keeping the facility running at top shape. He paid attention to the website to make sure it is working, limited events at the facility (including its Vauxhall event space) in order to let the catering team get up to speed in the first few months and made sure the service and maintenance functions of the hotel worked perfectly before taking on new areas of growth.

As a result, The Ramble made it to U.S. News’ annual Denver rankings during its maiden voyage. And it’s primed for even more success in the years ahead — even as it keeps its focus local, despite calls to expand.

“All over, there’s people now approaching us. But until we can say we’re the best hotel in Colorado, why would I go learn another city?” he asked. “For now, we just want to water the garden that’s here. There’s no need to go plant elsewhere.”

By: Ed Sealover – Reporter, Denver Business Journal