Read the full article - Benchmark Hospitality International

COMPANY SETS HIGHER MEASURE FOR SUCCESS
AS LEADERSHIP PASSES FROM FATHER TO SON
MANAGEMENT COMPANY REPORT | TOP 100 RANKING
EXCERPT FROM HOTEL BUSINESS VOL. 23 NO. 6 APRIL 7, 2014
C R E AT I N G
A
NEW
BENCHMARK
Benchmark
Hospitality
poised for
further growth
as leadership
passes from
father to son.
BY STEFANI C. O’CONNOR
If change is the engine that often
keeps a successful business chugging
along, Benchmark Hospitality
International® is apparently aboard the
bullet train.
Having kept a largely low profile
within the industry since it was founded
by Burt Cabañas in 1980, Benchmark
this year is looking to raise the bar,
continuing to build on a decade of
growth that has seen The Woodlands,
Texas-based management company
advance to 40 properties across
two distinct property portfolios:
Benchmark Hotels & Resorts® and
Personal Luxury Hotels & Resorts®, as
well as several additional corporate
conference centers.
Such success has been able to
drive internal change as well, with
multi-million-dollar investments into
technology, sales systems, training
and staff.
The biggest change, however, came
this past January when the engineer
of the entire enterprise decided it was
time for someone else to drive the
train. Opting to take on the sole role of
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chairman, Burt Cabañas named his son,
Alex, president/CEO of Benchmark.
While some might assume that would
be the long hoped-for game plan, the
elder Cabañas indicated such wasn’t
the case.
“I think what’s important is that we
are a privately held company, not a
family company, and when you separate
that in your mind, hope doesn’t really
enter into it. It is now absolutely
fantastic that my son has gained the
capabilities and the knowledge to be
able to be the CEO of the company, but
we never planned it,” said the chairman.
Before taking on the new post,
Alex worked for Benchmark for eight
years, most recently as president of
business development and finance,
and previously worked with Boston
Consulting Group in Massachusetts.
“Once he became part of our
organization, it became clear that
his skill level, having been to Harvard
Business School and through Boston
Consulting, was something the company
really needed at this point in its growth.
Then it became a hope — a quiet hope —
that he would eventually be able to step
into the position,” said the elder Cabañas.
What both men agreed on, however,
was that the premise needed to be
fulfilled and the fit a right one.
“I wasn’t intending to be in this
business at all,” said Alex. Still, he knew
he wanted to lead an organization—
“I raise my hand often to lead”—but
admitted if it was determined he was
not the right fit for Benchmark, “I would
be totally fine with that because I never
wanted my candidacy to, in any way,
put the company at risk because of any
perception that was created by the family
legacy … it just all came together but Burt
had to be the one to say: ‘It’s time.’”
Citing a recent assessment by his
father, Alex characterized Benchmark
as experiencing the “greatest single era
of accomplishment in general for the
company. And that’s from the man who
started it.”
“I think what’s important is that we are a privately held company,
not a family company. It is now absolutely fantastic that my son
has gained the capabilities and the knowledge to be able to be the
CEO of the company, but we never planned it.”
BURT CABAÑAS • Benchmark Hospitality International®
During the past five years, the
success check marks have been many.
“We’ve doubled the size in that period
of time, launched our two brands, we
bought another company (Seattle,
Washinton-based MTM Luxury Lodging,
which helped launch the Personal
Luxury portfolio with four hotels and
eight that Benchmark added), invested
between $4 million and $5 million into
the company, and been very deliberate
with very specific objectives and
strategic goals each year … and every
discipline in the company, with two
exceptions, has new leadership,” he
said. “It’s a monumental context in the
history of our company to think about
all those things that have happened
in a short period of time. Meanwhile,
the industry is evolving very fast to
support our business model in terms
of what consumers are looking for,
how distribution has changed and how
branding in general has changed.”
Benchmark also invested in the
creation of a Global Revenue Support
Center that supports off-peak and
overflow reservations services
company-wide at what it says are lower
costs and higher conversion ratios than
third-party providers.
The management company’s
properties have delivered annual
revenues of more than $505 million,
and among current goals is to get to
$1 billion in the next 10 years.
Key to that is expanding its portfolios,
which complement each other in what
they deliver for the company.
“Our Personal Luxury properties are
smaller, they’re 50 to 150 rooms, clearly
positioned as luxury properties as the
market would define them, competing
against the best in the market that
they’re in … from a pricing standpoint
they’re also at the top of their market,”
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said the CEO. “Our Benchmark resorts
and hotels are larger—smallest at 150
rooms, largest at 500 rooms—and
they are more group-oriented for the
most part—not all—in that 40% to 70%
of the business is group driven with
the Benchmark Conference Center®
designation associated with them.”
Benchmark also incorporates the
Personal Luxury positioning in a few of
its larger properties, such as with the
cottages and villas at Turtle Bay Resort
in Hawaii. Benchmark has a third piece,
Benchmark Conference Centers®, a
combination of day conference centers,
such as Tokyo Conference Center
Shinagawa, and private and semi-private
conference centers and hotels for major
corporations, such as the Lockheed
Martin Center for Leadership Excellence
in Bethesda, Maryland.
Benchmark has long been associated
with the conference side of lodging and
Burt was instrumental in founding the
now global International Association of
Conference Centers (IACC) and remains
active with the organization.
Alex said the variety of properties has
broadened the scope through which
investors and developers see Benchmark.
“The diversity has been great for our
growth. And, at the end of the day, it’s
for us, it’s for our 6,000 employees. It’s
giving them opportunities to do unique
things and leveraging the intellectual
property that we’ve built.”
He noted Personal Luxury properties
are poised to come on board in Florida
and Chicago with a resort and conference
center set in West Virginia and a number
“Our unique culture of
collaboration is intensely
oriented toward innovation
and performance.
Fundamentally, that has
driven our relative success.”
TED DAVIS • Chief Marketing and Sales Officer
Benchmark Hospitality International®
LEFT TO RIGHT: Greg Champion; Burt
Cabañas; Brad Hayden; Alex Cabañas;
and Ted Davis
of corporate and university ground-up
development opportunities. “So, it’s
really a balance,” he said.
Benchmark Hotels & Resorts® has
international properties, something
Cabañas wants to see happen with
the Personal Luxury collection. “We
are looking for international expansion
for Personal Luxury and we have two
projects, one in St. John’s [USVI] and
one in Great Exuma. One is signed
up and the other is very close and
we’ve been approached with some
opportunities in the Bahamas. But
we’re very selective as well. Growing
our business overseas takes the right
person and the right team because
we’re really leveraging people in those
circumstances,” he said. “The last thing I
would ever want to do in an international
market is to over-promise and underdeliver in a very human-based business.”
The younger Cabañas’ concern for
human perception is something ingrained
and an extension of his father’s founding
philosophy of treating his employees well,
something that has earned Benchmark
accolades as a top company for which to
work by outside organizations.
The company’s culture, which
encourages team members to “Be
The Difference” and empowers them
to go “above and beyond” to serve
guests and property owners, is key to
the guest experience at Benchmark
properties. The philosophy permeates
the company from the line employees
to the C-Suite.
Ensuring the culture aligns with
company objectives holds true as
well for the executive team, which
includes EVP/COO Greg Champion,
Chief Marketing and Sales Officer Ted
Davis and CFO Brad Hayden, who,
with their teams, meet 12 times a year
over a two-day period with Cabañas
as a supplement to the daily emails,
texts and calls. “The strategy team is
focused on the overall growth of the
organization and broader initiatives we
have. Our operating team focuses on
implementation: How do we support
the property, make their lives easier?
How do we implement opportunities,
systems and ideas with them?” said the
CEO. “And our general managers are a
part of that operating team so there’s
constant feedback between the field
and ourselves.”
“As a leadership group, we are
committed to staying true to our
defined objectives and our value system
and we talk about this nearly every
day,” said Davis. “Our unique culture
of collaboration is intensely oriented
toward innovation and performance.
Fundamentally, that has driven our
relative success.”
Champion agreed. “We are a
company that does an exceptional job
of balancing goals between our two
most important assets—owners and
employees. All of our strategies revolve
around improving that performance
consistently.”
For example, noted Hayden,
“Within finance and technology, we
are focusing on our analytical tools
and platforms, to provide real-time,
actionable information, to the hands of
our general managers and their teams,
as well as to the regional support
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teams, at the home office. From
software and systems to better manage
our customer relationship management,
systems to schedule the right number
of associates, for the proper levels of
business volume and tools and vendor
partners, to simplify and streamline our
supply procurement,” he said.
“I think the goals of our owners and
the company match up extremely well,”
said Champion, noting the top three
areas of concern include: “Rate. We
have made great strides in the past 18
months; however, we need to continue
to push the limits of rate without fear;
Cost creep: As the economy continues
to improve, we need to remain mindful
of the cost initiatives that took us
through the last downturn; and capital
improvements: There is a justified level
of confidence that has owners spending
aggressively to improve their assets and
drive market share and profitability.”
“Our culture is inspired by the notion
of making a positive difference in our
employees’, owners’ and customers’
lives, and that is profoundly important
to us,” said Davis.
The new CEO also concerns himself at
the granular level. “Guest experience, in
general, is a huge focus area for me. That
even includes when guests email me, I
am right there responding personally and
engaging in that,” he said. However, with
the elder Cabañas remaining involved
in the organization, the CEO said he has
been “clear with everybody that if they
believe Burt can be more impactful in any
given situation or issue, walk right by my
office and go see him. My ego will be just
fine and my schedule will still be full.”
Alex takes internal direction from
what he calls his “Five Fs”: faith,
family, friends, fitness and financial.
“Those have been my five discipline
categories since college. I set goals in
each of those, and they are in order of
importance for me,” he said, adding
one of the life lessons he learned from
his father is to have balance within
personal and business endeavors.
FATHER AND SON TEAM: Burt (left) and Alex Cabañas
“There’s an institutional culture, a badge of honor associated
with Benchmark that has lived and breathed for 33 years and
was very influenced by its founder and will still be—and, of
course, will be influenced by its CEO and a group of leaders. ”
ALEX CABAÑAS • President/CEO Benchmark Hospitality International®
“He always said balance your life. My
addition to that over the years has
been to have a balance of focus, not
necessarily a balance of time.”
While he’s had a lot of visibility within
the company over the past eight years,
in now beginning to put his mark on
it, the executive has been traveling to
properties where he’s had dinner with
the executive teams, reviewed employee
satisfaction survey results and held
small roundtables with employees to
engage them at the line level. “Getting
the broader message out is helpful, but
I’m much more interested in engaging
people at a personal level. It’s the
simplest of things that make people feel
great, but that’s who we are,” he said.
“There’s an institutional culture,
a badge of honor associated with
BenchmarkHospitality.com
Benchmark that has lived and breathed
for 33 years and, yes, was very
influenced by its founder and will still
be—and, of course, will be influenced
by its CEO and a group of leaders. But,
at the end of the day, I want everyone
to own it, I want everyone to have the
courage to speak up when something
happens that’s not in line with it and I
want every leader to have the humility
to listen when something happens that’s
not in line with it because if we do that,
as we go from 36 to 60 properties, we
won’t lose our culture along the way;
everybody’s hands will be holding tight
around it and we will have a lot more
strength as a group believing in and
protecting that culture than we will if
they expect the home office to be the
caretaker,” the CEO concluded.
For over three decades, we’ve done business one way...
In the best interest of property ownership.
Next to our employee family, the relationships with our owners are the most valuable asset within
our company. We are driven by our entrepreneurial approach to hotel and resort management.
With the recent unveiling of Benchmark Resorts & Hotels, Personal Luxury Resorts & Hotels, and the
prestigious Benchmark Conference Center collections, we continue to innovate and establish new
levels of performance to which others aspire.