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Tracy Prigmore, left, founder of TLTSolutions and She Has a Deal, a hotel-investment pitch competition for women, joins Peggy Berg, founder and president of Castell Project, a non-profit dedicated to accelerating the careers of women in hospitality leadership, at a July 27 reception at Prank’s Bar in Los Angeles to announce the launch of Fortuna’s Table, an online real estate investment platform for women. The programs are among several formed over the past few years to educate and recruit women hotel owners and investors.
“We are at an inflection point. This is not something we are focused on for the here and now. This is the focus on forever and what should be done at all times.” John Lancaster, EVP, franchising and emerging markets, Choice Hotels International
As vice president of sales and development marketing at Wyndham Hotels & Resorts, Bella Silverberg recently has had conversations with women invested in hotels as well as women working in hotel companies owned by others.
What she learned is that people who’ve served in allied roles in the lodging industry are just steps away from becoming owners themselves.
“I feel very fortunate actually over the last especially couple of months to have had many conversations with women who have taken this step from leading operations,” Silverberg said. “They have played such an integral role in the business and now knowing the business so fundamentally they have this opportunity to take that step into hotel ownership.”
Silverberg helped Wyndham create Women Own the Room, a program designed to inspire, encourage and support women interested in becoming hotel owners.
It is one of several programs the industry has seen evolve over the past few years to tap into often-ignored aspiring hotel owners and investors and help them hurdle barriers, including the most daunting – access to capital.
NEW GLASS CEILING: Tracy Prigmore, front, second from right, is founder and CEO at TLTSolutions, a real estate investment company that includes She Has a Deal, a hotel pitch competition for women. Prigmore poses with women who participated in the 2021 pitch competition. Prigmore was inspired to create She Has a Deal after she experienced roadblocks to information and financing while developing her own hotel project. Episode 340 of Lodging Leaders podcast updates the progress of SHaD and other programs focused on recruiting women hotel owners and investors.
Women make up at least 50 percent of the U.S. population. Women are half of the nation’s workforce. Women earn more post-secondary degrees than men. Women-run companies generate higher returns than those managed by men.
But – and it’s a big but – fewer than 1 percent of all money invested in the real estate industry is managed by women-owned firms.
This information is posted on the She Has a Deal website, which promotes the annual hotel-investment pitch competition and explains its mission to recruit, educate and support women interested in owning hotels.
She Has a Deal or SHAD is preparing for its third pitch competition set for April. It will be different from the first two events because it includes teams of women who have worked in the lodging industry and understand a thing or two about how to run a hotel business. SHaD has named this group Today’s Woman.
Most participants in previous SHaD competitions were either college students or recent graduates. These are what SHaD classifies as Early Careerists. Expanding the competition to candidates who have worked in the lodging industry for years is a big step toward letting women know they don’t have watch from the sidelines as their male employers or patriarchs in family enterprises build wealth through hotel investment.
“Our goal with Today’s Woman, which is similar to what we’ve had historically with the Early Careerist, is to provide knowledge and resources to those women so that they can be successful in closing the deal,” Prigmore said.
Early Careerist team members, she said, comprise the pipeline of future hotel deal makers. “We’re not expecting that they would be in a position today to close on a hotel deal because they haven’t had enough work experience or they don’t have the finances or the network in which to raise the capital needed to close on a deal on their own.”
However, members of Today’s Woman are expected to be able to see a deal through to closing.
That’s not saying a deal can be done quickly, Prigmore said. Hospitality professionals still need to accrue knowledge about development and sponsoring a fund before they can attract investors in a hotel project. “We want to catapult them on their journey to success by giving them that additional knowledge, in addition to what they already know, and teaching them the pathway that we’ve created, so they can move forward with confidence,” Prigmore said.
Connect the Dots
Besides the annual pitch competition, SHaD spends the rest of its energy on educating women about what it takes to become a hotel investor. It has its own master class and this past summer, SHaD and Castell Project teamed up to launch Fortuna’s Table, an online program designed to educate novice investors about hotel investment and ownership.
Though increasing the ranks of women hotel owners has been a topic of industry-wide discussion for several years, She Has a Deal has heightened the awareness for industry leaders in search of new paths of hotel development and investment. It’s a slow process, Prigmore admits. And it’s made even slower by industry leaders who are reticent to do business in a different way.
“If we really want to see more women and under-represented minorities owning and developing hotels, we have to address the issue of access to capital,” Prigmore said. To that end, SHaD has “made it a priority to proactively identify sources of capital” for SHaD projects as well as other hotel deals that will come from SHaD.
Providing both debt and equity toward women-led hotel development projects are vital for true change to occur, Prigmore said. “If we don’t address that issue, we will have more educated women, we will have more networked women and other minorities, but if they’re not able to close on the deals and keep moving forward and building their portfolios, then we’re just an education vehicle and a connector. We have to address the equitable nature needed for access to capital.”
JLL, a global real estate investor and manager, reported in August that hotel investors are gearing up to deploy tens of billions in capital in 2022. In the first half of this year, investment activity reached $30 billion, just 4 percent less than investment levels in the first six months of 2019.
Respondents of JLL’s annual Global Hotel Investors Sentiment Survey said they expect to significantly increase their investments into hotel deals the rest of this year and through 2022. North America is among the prime targets.
But Prigmore believes it will be business as usual for most seasoned investors. That means up-and-coming deal makers risk being left out of the buyers’ club. And conventional-minded investors will miss out on new opportunities to build greater wealth.
“If you’re new to the industry, then they’re probably not looking for you,” she said. Most financiers are not comfortable doing business deals with non-traditional sponsors.
SHaD’s goal is to “connect the dots,” Prigmore said, aligning a new demographic of hotel developers with existing financing opportunities.
“We have this group of women who are entering SHaD Pitch 2022 who have extensive experience on the operations and marketing side of the business, who have been helping owners for decades be successful in their investments and endeavors,” she said.
“They’re a phenomenal force that will be tremendously successful if given the opportunity.
“Let’s look at a new roadmap, a new way to bring others into the industry so that they can thrive; so that they can bring others along with them,” Prigmore said. “We can also close some of the gender wealth gap as well as racial wealth gap by allowing other people access to this wealth-building vehicle of hotel investment.”
Owners and Leaders
Peggy Berg, founder and president of Castell Project, said though the non-profit is focused on accelerating women’s careers in hospitality, it also recognizes the value of being a hotel investor. That’s why Berg joined Prigmore in creating Fortuna’s Table.
“We’re a very entrepreneurial industry. And for everyone that comes up the corporate ranks and becomes a member of the C-suite in one of our very large companies, there are literally dozens who start their own companies or come up through family companies or make family companies into larger, more corporate entities.”
Castell supports women on a trajectory to corporate leadership but, Berg said, hotel ownership can also be part of the formula. “We need women in ownership to also have women in leadership.”
Diversifying an investment portfolio by adding commercial real estate assets is not confined to women working in hospitality, Berg said.
“Women across all industries are starting to look at their own balance sheets differently to say, ‘How can I actually have a balance sheet? It’s not just about having a paycheck. It’s about having assets to share with my children and my children’s children. And to provide me with security.’
“It’s not necessarily an easy or a well-documented path,” she said. “For women to become owners, they need knowledge, they need mentorship and they need a kind of community that tells them they’re not crazy and helps keep them moving along their path.”
Even if a SHaD or Fortuna’s Table participant is not certain she wants to be a hotel owner or investor, going through the educational process can arm her with knowledge she can deploy at her place of employment or start her own venture.
“If you understand what the owner and the developer is going through and what they’re thinking and what their hurdles are, you will be better at your job,” Berg said.
Harneet Sandhu owns the newly opened La Quinta Inn & Suites by Wyndham Spokane Downtown in Spokane, Washington. Click here to sign up to receive information and updates on Women Own the Room.
Silverberg with Wyndham echoes both Prigmore and Berg.
“Women are significantly underrepresented in the development field and with diversity, equity and inclusion as key cornerstones of our culture, we as an organization are just so committed to seeing this change. I think it’s important for women. It’s important for the industry,” she said.
“If there’s one thing we really learned through the recovery is that the old playbooks don’t work. We need to think about business differently. We need to do business differently. And female entrepreneurs, they bring different perspectives and experiences to the table, and that ultimately makes us all stronger.”
Wyndham’s Women Own the Room is designed to break through barriers women face when seeking support and information about buying a hotel.
Starting this fall, Women Own the Room will offer a series of programs that share the nuts-and-bolts of hotel development. Topics include why the time is right for women to get involved in hotel development; how to select sites and perform a feasibility study; and how to secure financing for a project.
In developing the program, Silverberg and others at Wyndham sought insight and advice from women steeped in hotel operations and investment.
“We met with a council of influential women in the industry to better understand the common barriers that women face in entering the hotel development field. And there were a few points that popped that really shaped the direction of our program,” Silverberg said.
The first realization is there are few role models for women entering hotel development. “That’s not surprising because culturally, while women have played a role in leading hotel operations, using debt and equity for hotel development is relatively new,” she said. “Therefore, in many ways, there’s a belief that the business is overly complicated. It feels overwhelming. They don’t know where to start.”
The other major point echoes Prigmore’s observation: “Securing capital is a challenge.
“Truth is it’s challenging for everyone in the current environment, but it’s especially challenging for women who have not owned large assets like hotels that use significant debt in the past,” Silverberg said.
Allen also said the company will use its own balance sheet to support women-owned projects and it will launch a program that includes financing and first-year incentives in operating agreements.
Silverberg notes each project is different and Wyndham will not deploy a one-size-fits-all strategy.
“Every individual and every opportunity is unique and so are their needs,” she said. “For many female hoteliers this may be their first experience in hotel development, while others are already industry in the industry and are looking to scale.
“With Women Own the Room, we really try to tailor the support that we provide based on the owner’s experiences and the specific opportunities.”
Wyndham’s Women Own the Room is not operating in a vacuum. It has joined forces with Fortuna’s Table as a sponsor, along with other major hotel companies.
FIRST FRANCHISEE: Cheryl Goldberg, owner of and CFO at IGO Legacy Hotel Group in Elk River, Minnesota, in March opened her Comfort Inn St. Paul East in Oakdale, Minnesota. Goldberg was the first woman to be awarded a franchise contract as part of Choice Hotels International’s mission to expand hotel ownership to women.
Choice Hotels International has not only joined the effort, it is becoming the vanguard in opening up hotel investment to women and other minorities.
As executive vice president of franchising and emerging markets at Choice, John Lancaster has championed the benefits of promoting franchising to women as a way to expand community economic development and wealth creation.
In August, the company announced it expanded its emerging markets initiative to include incentives for women investors.
“We have research and an ascending-leadership program at Choice where we have an opportunity to look at our franchisee of the future and what our future looks like. Overwhelmingly, it comes back from our franchisee-future outlook that women, without question, play a prevalent role.”
In the U.S. women own or co-own 35 percent of all franchised businesses, according to research by Franchise Business Review. Of all franchises opened in 2018 and 2019, 41 percent are women-owned. The number of women-owned franchises has increased by 24 percent over the past decade.
Women turn to franchising to start their own businesses to have more control over their time and money, Lancaster said.
The coronavirus pandemic has dramatically accelerated the trend.
“During the pandemic what happened to the majority of people who were working in specific businesses is they found themselves vulnerable and at the mercy of their employer,” Lancaster said. As a result, their thought process shifted to owning their own ventures where they could be their own boss and have majority control over business strategy and outcomes.
Despite and maybe even because of the pandemic crisis, people working in the industry have seen the value of owning a hotel, an asset that may struggle at times but is usually in a position to recover stronger than before.
“Hotel ownership still has this great opportunity,” Lancaster said, “And, without question, women are in the forefront of moving that as our franchisee of the future.”
As with the other experts interviewed for this report, Lancaster sees a bounty of opportunity in encouraging women employed in hospitality to consider buying or investing in a hotel.
One hotelier community that stands out is Asian American owners, who have long claimed women are the backbone of their family businesses. Lancaster sees these women stepping our more and more into hotel ownership. In doing so, they’re building a new foundation of hotel owners. He mentions Jyoti Sarolia, a third-generation hotelier who began in with a Quality Inn in Temecula, California. Sarolia, co-founder and chief operating officer at Ellis Hospitality, was the first female chair of Choice Hotels Owners Council.
WATCH: AMERICAN DREAM: Jyoti Sarolia, co-founder and principal at Ellis Hospitality, is featured in this video by International Franchise Association as part of its Open for Opportunity campaign.
Choice Hotels has also identified other groups of women who would be good candidates to either own a lodging asset outright or be an investor in one.
He mentions a physician, Dr. Andrea Williams, an ear, nose and throat specialist who owns several practices as well the Jerk Joint restaurant in Charlotte, North Carolina. Williams is developing a dual-branded Main Stay Suites and Sleep Inn in Rock Hill, North Carolina, and a Comfort Suites in Charlotte.
Williams is a member of Choice Hotels Owners African American Alliance, which formed in December.
Check out other Long Live Lodging podcasts about women and hotel investment.
Lancaster said as Choice developed its emerging market franchising program it came to identify several distinct “personas” among women who are current or would-be owners.
First, is “the investor.” Williams would fit into this category, Lancaster said. “She hasn’t really had the opportunity to manage a hotel full time. So she would be what we considered an investor and looking for a management company to run that.”
Next is “the enthusiast,” a small business owner that looks for transitioning from a quick-service restaurant or a car dealership into hotel ownership.
Another category is “female family members.” These are women related to a current franchisee and are looking to expand into a hotel of their own.
And lastly, is “the up and coming.” Lancaster describes them as “young and energetic women who are seeking knowledge on becoming an entrepreneur.”
Lancaster agrees the highest hurdle women entrepreneurs face is access to capital. To that end, Choice Hotels in 2018 hired Yolanda Merriweather as a lending specialist. She walks alongside prospective hotel developers and guides them on how to qualify for SBA financing and conventional bank loans.
But wait, Lancaster said, there’s more.
“Choice actually awards and financially supported since March of this year through June seven women hotels,” he said. “We’re excited about doing that to make sure we don’t just say we want women (owners) and we’re going to check a box.
“This is not checking a box. We are at an inflection point. This is not something we are focused on for the here and now; this is the focus on forever and what should be done at all times.”