CHRISTMAS 2010

As 2010 draws to a close amid the
lights of the holiday season,
I would like to acknowledge and thank our associates/teammates,
team leaders, coaches, board members, vendors, franchise partners,
and friends who have helped make Hotel Equities
light shine so brightly throughout this year.

May the beauty
of the holidays inspire
gratitude for yesterday,
joy for today and
hope for the new year to come.

ARE WE THERE YET?

I remember when our kids were young and when we would go on a road trip the typical and consistent question after 2-3 hours into the drive was, “Are we there yet?” Having been in the worst recession of our lifetime for the past two years, that is an appropriate question regarding the condition of our economy.

Most of the economic prognosticators that I respect are saying that this will be a slow steady climb out and not a “hockey stick” type recovery where we go into a steep, steady and sustainable climb out of the recession.

Here’s some good news. For the first time in over two years, Hotel Equities has achieved two consecutive months of double digit year over year revpar growth. Are we out of the recession? I don’t know for certain but that is certainly a strong indicator that things are improving.

Unemployment rates continue to hover around 10%, consumer confidence levels remain low and housing starts are still extremely sluggish, all primary indicators for our industry. However, it does in fact appear that the worst may be behind us. I sure hope so. I am looking forward to year over year numbers remaining in the black and a positive trend turning into a new period of extended growth.

As we go into a new year as well as a new decade in 2011, my hope is that you don’t stop dreaming and that all your dreams inspire you to new personal triumphs.

No, we are not there yet, but I think we are getting closer.

IN YOUR OPINION, WHAT MAKES A GREAT LEADER?

I think a great leader can be defined as a person who has found their purpose in life, does what they do with great passion and helps as many people as possible while in pursuit of their goals.

I forget who said it, but I heard a great line that goes something like this; “Success isn’t defined by how many times you cross the goal line but instead by how many people you carry with you across the goal line.”

Life is a matter of priorities. We should make people a top priority in our life. How many people you carry with you is the truest factor in determining your success as a leader.

WHAT IS THE BEST ADVICE YOU HAVE EVER GIVEN TO A TEAM MEMBER?

The best advice I think I have ever given to a team member was probably, “If you don’t enjoy what you are doing, go do something else”. I am a firm believer that life is too short for you to not be doing something that you like. I have the great pleasure of teaching a “culture class” to all new associates bi-monthly. One of my favorite things about teaching that 2 hour class is when I get to look them in the eye and suggest they leave if they don’t like what they are doing. You should see the look on some of their faces. It is combination of surprise and shock but in the end I see an expression which seems to say, “that makes sense”.

I obviously don’t do it to run people off from our company, but more out of a sense of caring for their well being and wanting team members who care about their job enough to want to do it well.

I usually make the statement just prior to our mid-class break time. I then get the opportunity to invite them back with a statement like, “I guess you like your job well enough to have come back for part two”.

I love my job and therefore have a keen desire to see others share a similar experience. I think it is healthy for us to be occasionally reminded about the brevity of life along with the realization that our choice of workplace is important to our quality of life. This is particularly true in that we spend most of our waking hours at work.

What are you doing with the rest of your life?

TRICK OR TREAT?

As I write this, we are in the midst our first weekend of October, 2010. Finally the heat of the summer is behind us and those 90+ degree sweltering days with high humidity are a thing of the past. Football is now in full swing and my favorite sport is beginning its post season race next week with eight teams in pursuit of the coveted title of being named World Series Champions of major league baseball.

Also, we will soon be buying candy and getting things ready for Halloween. My wife and I have the pleasure of living in a rather large family friendly neighborhood so, I get a chance to dress up and behave like a kid at least once more this year. Another reason I enjoy Halloween so much is because I get to experience the joy of giving out baseball cards to excited little boys [and sometimes girls]. We give the kids the option of getting candy or playing a dice game. If they choose the dice game, they get to roll three dice and get to win the baseball cards which lie on the corresponding square numbering from 3 to 18 [for those of you who have never played or don’t remember dice games, each dice has six sides and each side is numbered one through six]. Of course I place the most expensive, highly coveted baseball cards on numbers 3 and 18, which are the most difficult number combinations to roll [you have to roll either three 1’s or three 6’s]. Almost every year a small child has gone home with a valued baseball card prize in the $40-$50 price range. I wonder how many of them end up in the trash along with some of the candy that parents have to destroy in order to keep their dentist bills in line with their budget.

As for the hotel business, we continue to struggle with our roll of the dice called the economy. Budgeted revenues and room rate growth have been difficult to achieve even though we have begun to see some slight improvement in weekday occupancy. The pundits say that it will be 2012 before we are able to get our room rates back up to 2008 levels and more likely 2014 or 2015 before we are at CPI adjusted room rate levels of that year.

This has been a long tough road. We each have felt the sting of the worst economic downturn in recorded hotel history. However, as we approach the holidays, let’s each be mindful of our blessings and not dwell on the inconveniences of the belt tightening that we have all had to endure. With unemployment at or near 10% and underemployment close to 9%, that combination means that nearly one out of five people are suffering significant lifestyle changes.

Please remember to tell people that Hotel Equities hosts “Life Lessons over Lunch” each Wednesday at noon at our corporate office in Dunwoody, GA. We provide lunch as well as career networking opportunities for all people who are in between work assignments. The career networking portion begins each week at 10:45am and concludes with a complimentary lunch and the showing of a DVD series lesson featuring Andy Stanley, pastor of Northpoint Community Church in Alpharetta, GA. Andy is an excellent communicator who each week delivers a very relevant spiritual message that is typically a blessing to all who attend.

After the difficulties of the past year or two, I don’t know about you but this Halloween I’m going for the treats, I’m tired of all the tricks.

WHAT'S YOUR FAVORITE ASPECT ABOUT BEING A HEAD COACH?

I get great enjoyment and satisfaction in seeing others do well. As a company we have had nine winners of the Marriott General Manager of the Year award. Most of the winners are not only still with the company, but have advanced their careers and have themselves gone on to become coaches.

Like most people, I get greater joy out of giving a gift than receiving one. One of the most fun parts of my role as Head Coach is when we meet quarterly to celebrate the extraordinary efforts of our managers and associates. To me, they are the true heroes of this company. They go above and beyond to see that our three key stake holders [our guests, our associates and our investors] expectations are being met.

What a thrill it is to be living my dream as Head Coach of this team and to see people growing and reaching their goals as well. It doesn’t get any better in my book.

SHOULD PETE ROSE BE IN THE BASEBALL HALL OF FAME?

Wow! What a controversial question. As a huge baseball fan [Red Sox and Braves……..real die-hard fans have to have both an AL and NL team], I love the purity of the game not the shady side……the sex, drugs and alcohol [and in this case, gambling]. As in just about all sports today, you have to look beyond the human character flaws [and we all have them] and focus on the game itself. There is nothing more exciting in sports than to watch an athlete who has special physical skills and who has an extra level of charisma and energy, compete in a sport which you enjoy watching. Pete Rose was that sort of athlete. In fact, his nickname was “Charlie Hustle”. People would go to games that they otherwise wouldn’t just to watch him play.

He holds the record for the most base hits by a major league player in baseball history [4,256], having broken Ty Cobb’s record of 4,191 hits. Just think of it, only a few great hitters [maybe a handful of players per year] will achieve 200 hits per year. To break the record, Pete Rose had to accomplish that for 20 plus years. He had a lifetime batting average of .303, was Rookie of the Year in 1963, finished in the top 25 in MVP voting 15 times, was the MVP of the National League once, and was an All-Star 17 times during his 24 year career. Wow, what an accomplishment! What a career!

In spite of his unbelievable feats, Pete Rose disgraced the game of baseball by gambling on games in which he had influence on the outcome. Even more importantly [and in light of the fact that we Americans are a very forgiving society, so long as forgiveness is asked for and remorse is shown], he has remained angry and arrogant about his judgment, being banned from baseball for life.

Some of you may be saying, “but what about showing Pete some grace?”. I’m all about grace, in fact I consider myself the benefactor of God’s grace. I read an article recently by Max Lucado who is one of my favorite authors, in which he talked about grace. He made a statement that I think is worth repeating here; “I am never surprised by God’s judgment but stand in awe of his grace”. I wish Pete could read that and grasp the reality of it.

In summary, you cannot deny the outstanding playing ability and on field accomplishments of Pete Rose but, based upon his current attitude towards baseball’s judgment of his actions , I think he should reach the Hall of Fame posthumously.

WHAT WERE YOUR THOUGHTS BEHIND THE DEVELOPMENT OF THE TEAM LEADER PROGRAM?

The Team Leader program was designed and implemented as a means to build leadership depth within Hotel Equities as we grow the company. One of the biggest challenges regarding the growth of a management company is the delicate balance between talent depth and pace of growth. In addition to the pace of growth, other critical factors include geographic location, size, type, and franchise affiliation of the properties that are added to the portfolio.

With this in mind, it was felt that the TL program allowed HE the most cost effective and flexible approach to growth. It has been a policy of HE to promote from within whenever possible and therefore this process allowed talented single unit hotel manager’s an opportunity to experience multi-unit management. I am of the opinion that the transition from single unit to multi unit management is one of the most challenging management paradigm shifts a leader will experience in their hospitality career.

WHAT DO YOU LIKE TO DO IN YOUR SPARE TIME?

My favorite thing to do in my spare time is to spend time with family and friends. I especially enjoy watching my grandchildren play sports. I had one of the most enjoyable weeks I have had in a long time last week while watching one of my grandsons play baseball. My 2nd to the oldest grandson Eli is an exceptional baseball player. He was recently honored by being selected to play on a statewide [South Carolina] All-Star team called the Blue Chip Bulls.

The Bulls just finished a week long tournament here in Atlanta sponsored by the East Cobb baseball program in which 192 teams from all across the country competed. The Bulls finished the tournament with a 3-1-1 record tied for first in their bracket. Unfortunately, the one loss they had was to the team they ended up tied with which meant that the other team got to advance and we didn’t. I was so proud of Eli who was the starting SS and lead-off hitter for the Bulls. He batted .451 for the tournament and played errorless ball in the field. I’m hoping he’ll have his own baseball card one day.

OTHER THAN THE HOSPITALITY INDUSTRY AND YOUR BELOVED RED SOX, WHAT IS YOUR REAL PASSION THAT WE MAY NOT KNOW ABOUT?

Teaching. I think if I was not in the hotel business, I would be teaching in some capacity, probably at the college level and, more than likely, in the hospitality arena. I enjoy utilizing my experience and sharing my passion about the hospitality industry with others. I do a fair amount of teaching presently in my Head Coach capacity – just enough to “scratch my itch” in that area. I love it when I’m able to see audiences respond to information or knowledge that they were not aware of, and I particularly enjoy sharing about the history of the hotel business. It is not only one of the oldest professions, but it’s also one of the most interesting and rewarding. We in the hotel business often talk about the fact that once the business “gets in your blood”, it’s hard to get out. I believe the secret to success is finding something you are passionate about and then finding someone who’s willing to pay you to do it. I hope you enjoy this great business as much as I do.

WHO WOULD PLAY FRED CERRONE IN THE MOVIE ABOUT YOUR LIFE?

Matt Damon – First, because he’s from Boston and is a huge Red Sox fan! Secondly, I have enjoyed a number of his movies, including The Bourne Identity series. Not that I picture myself as a James Bond type, however, I have indeed enjoyed an exciting ride by being involved in the hotel business.

IF YOU HAD A CHANCE TO CHANGE ANY LAW OR CONSTITUTIONAL RIGHT, WHAT WOULD IT BE?

Tort Reform. Because of our litigious society and the prevalence of lawsuits, basically anyone can sue anyone else without worrying about the consequences. I believe that in England, if you sue someone and you lose, you must pay their attorney fees which keeps down the number of frivolous lawsuits. That would be a good change of law that would positively impact our society and make us more prone to want to help each other without the risk of being sued for “doing the right thing.”

WITH THE ECONOMY CHANGING, DO YOU SEE YOURSELF CHANGING HOW YOU MAKE DECISIONS?

The short answer is “yes”. The longer answer is that we are in the midst of the worst economic crisis in the history of our nation. You can’t get around the fact that unemployment is at 10% and, by the way, the real number is probably closer to 20% when you include those who are underemployed. Today, it’s almost impossible to get business loans. The thing that makes this downturn stand out from others that I have experienced in my 40+ years in the business is that all sectors – hotels, office, retail, and apartments (basically the entire real estate sector) have been impacted similarly. I am thankful that the majority of our hotels carry top-tier franchises and that this allows us to weather the storm better than most. You have probably heard the saying, “All boats float during similar tides” and I believe this is true. However, if you have a well-located hotel with a top-notch franchise, you are going to enjoy more buoyancy and, in fact, recover at a faster rate than other hotels affiliated with lesser franchise flags. Our investors are currently under tremendous financial pressure and we must do our best to help them make their debt service payments. Therefore, we have to be sensitive to their needs and the urgency factor therein. Having said that, we as a company have done a great job of preserving jobs for more than 700 people. I personally am focused on growing our business in a manner which will not only save jobs, but provide employment opportunities for others that might not otherwise be able to find gainful employment. The fact that we have identified our three key stakeholders as our guests, associates, and investors has served us well during these difficult times.

GROWING GAINS

This is an exciting time for our company. As we approach our goal of 50 hotels in our portfolio, it is important to remember that we are a company of champions with a storied and distinguished track record.

At Notre Dame, each football player touches a plaque with the inscription “Play like a Champion.” prior to stepping on the field before each game. At HE, we must employ the same dedication and discipline to maintain our edge. I challenge each of you to adopt this type of mentality before stepping onto your workplace in order to continue to perform and be perceived as champions. Our reputation is on the line whenever a guest enters the lobby of a Hotel Equities’ hotel.

We have established an excellent reputation with each of our company’s stakeholders: guests, associates and owners. As we continue in our tradition of excellence, remember, we’re a team and together we can accomplish great things.

WHO IS THE COOLEST PERSON YOU EVER MET AND WHY?

The coolest person I ever met was by a long shot, my grandfather. His name is Alexander [Alex] McKean and he was a janitor at an elementary school for 47 years. He taught me the importance of consistency along with many other things. “Grampy”, as I would call him, was a kind and gentle giant. He knew everyone in his home town of Revere, Massachusetts and everyone knew him or so it seemed to me. As a young boy of 5, my parents became divorced. It was a difficult time for me, not having my Dad living with us and giving me the guidance and direction that a young boy requires in order to “figure out life”.

I used to spend summers with Grampy and he would take me to work at the Pembrook Pines Elementary school in Revere. I would help with odd chores around the school, which was of course closed for the summer except for a few “summer school” classes for those kids that had fallen behind in their studies for one reason or the other. Of course Grampy knew them all by name, both the teachers and the students. I used to wonder how he was able to remember all their names. It would amaze me how their faces would light up when he called their name one by one. All those faces and all those names.

It wasn’t until several years later that I would fully realize the impact he had had on those people.

It was the day of his funeral and as my mother and sister and I drove close to the funeral home. I remember asking my mother about the long line of people that surrounded the funeral home and extended for a block and a half. She said, you’ll see son once we get inside.

I stood amazed in the infamous “receiving line”, as what appeared to be hundreds of people in single file, walked past us, my grandmother, my mother , my sister and me. One after another recounted how much “Alex” had meant to them. Teachers, students, parents, school board members. “He always had a kind word for me” was the most common phrase I heard. Wow, what an impression he made. What a difference he had made in their life. Not only on me, but on nearly everyone he met. A janitor, at an elementary school! He was cool. I miss him to this day.

WHERE IS THE ONE PLACE THAT YOU WOULD LIKE TO VISIT THAT YOU HAVE NOT YET BEEN?

I would love to visit Israel. As I write this, we have recently celebrated Easter and I am mindful of the traditions and reality of my Christian faith. I would love to have the opportunity to travel and visit some of the same places Jesus did. It would be an extra special treat to have a guide who could bring the bible to life as we walk the paths where some of the best stories ever told originated.

This past year I had the pleasure of visiting Italy for the first time which is the birthplace of my paternal grandparents. That experience was very moving for me. We found the small town of Isle de Liri which is about 90 miles south of Rome. We met several townsfolk but were unable to complete the trace of our heritage since most of the towns records were destroyed in a major flood which took place in the early 1900’s. The town name which means the land of two rivers is one of the most quaint spots I have ever visited.

In preparing for the trip we did some ancestry research and learned that my grandparents immigrated to this country in 1904. My grandmother was pregnant with my father during the voyage from Italy and my father was named after the ship they sailed on which was the Frederic de Grosse. So, I guess you could say I was named after a floating hotel.

WHERE DID YOU VACATION AS A CHILD?

We lived in Boston, not too far from the beautiful beaches of Cape Cod, Massachusetts, however we used to vacation in Miami Beach each summer. It would take us 4 days by car to get there and 4 days to get back which left us 6 days at the beach. It was my mother’s favorite place and therefore became the family’s destination of choice each year. Each night as we stopped to rest along the way, it was my job to inspect the motel room alongside my mother, before finally selecting where we were going to spend the night. Specifically it was my job to look under the beds for any foreign creatures. I guess that is where I got my first glimpse of what would eventually become my life long career in the hotel business. In a sense, I guess the OA process was born here.

HAVE YOU EVER WOKEN UP ONE DAY AND WISHED YOU DIDN'T HAVE TO GO TO WORK?

I think I can count on two hands the number of days I have dreaded going to work in my 42 years in the hotel business. Most of those happened when I was sick or under the weather so to speak and yet I pushed myself because I had a deadline to meet or a jam packed day that I thought required my involvement.

I am not naïve here in that I understand how rare it is to have been in one industry virtually my whole life and to have had the good fortune to have enjoyed my work so much. I think it was Earle Nightingale, one of my favorite motivational speakers and authors who said, “The key to success in the workplace is to find something you enjoy doing and then find someone who is willing to pay you to do it”. Now that is good advice in my opinion.

WHAT HISTORICAL EVENT HAD THE BIGGEST IMPACT ON YOUR LIFE AND WHY?

My parents were divorced when I was five years old. Back in the 50’s, this was much less common of an event than it is today. I remember my best friend’s mother saying, “He can’t play with you anymore since I learned that your parents were divorced.” Since I did not live with or near my Dad, I only got to see him every other weekend. I remember it was tough not having a father figure around my house to help me “figure life out”. Fortunately for me, my grandfather stepped up and became a very important role model in my life. In addition, my Little League coach became a very influential person in my life. He taught me the fundamentals of the game of baseball and told me I was going to be “alright”. Later on in my life, I found it very rewarding to coach Little League and teach young boys about the wonderful game of baseball which helped encourage me at a time when I needed it the most. I was always on the lookout for the kids who were living with a single mother and who were in need of a word of encouragement.

HOW DO YOU BALANCE YOUR LIFE EACH DAY?

I think we find balance in our lives in three ways.

The first is to find your purpose in life. We each have strengths and weaknesses. We also each have gifts and talents. To find our purpose we must first determine what our gifts and talents are and then we can, from a position of strength, begin to find our purpose.

The second is to have goals in our lives. I feel that goals are an important part of the lives of most every successful person. I don’t think anyone who has ever been successful did so by mistake or by chance. I believe they set targeted goals which helped them make decisions along the way towards their achievements.

And the third is to set priorities for your life. If you fail to set priorities for your own life, you become susceptible to the priorities of others and you may mistakenly end up somewhere you did not intend to be.

I have found that by finding my purpose, setting goals and having priorities in my life, I am able to help keep my life in balance.

Also, I would be remiss if I did not mention the fact that my faith is an important part of my life. It provides me with balance by recognizing that a higher power is in control and not me [thankfully]. The bible says it best, “Man determines his path, but God directs his path” [ Proverbs 16:9 ]

IF YOU HAD A CHANCE TO START ALL OVER AGAIN, WOULD YOU?

If the question is, would I start in the hotel business all over again, my answer would be absolutely yes. I have thoroughly enjoyed the business and can’t see myself doing anything else. I have had the opportunity to meet all different types of people that I would not have otherwise met. No two days have ever been exactly alike and it has not been boring. I have been afforded the opportunity to grow and utilize my gifts and talents in a manner which has hopefully been of help to others. Someone once said that the key to success and happiness in life is to find something that you enjoy doing and then to find someone who is willing to pay you to do it. In that, I have been both happy and successful.

IF YOU COULD HAVE WORKED NEXT TO ANY GREAT LEADER WHO WOULD THAT LEADER BE?

The one leader I would have liked to have spent time with is Ronald Reagan. All politics aside, he was one person of influence whose leadership has positively impacted more people of this generation than any other living person. His “take down this wall” speech freed hundreds of thousands of people from the suppression of Communism. Additionally, I recently spoke to an Air Force Major who was commander in charge of the squadron which flew in support of Air Force One. He said Reagan would take time to be with the junior officers and enlisted military personnel and was always asking relevant questions about their well being and the well being of their families. He lived out the truism that “people don’t care about how much you know until they know how much you care”.

WHEN YOU WERE GROWING UP, WHAT DID YOU WANT TO DO AS AN ADULT?

While growing up as a young boy my first love was baseball. I dreamt regularly of one day playing for the Boston Red Sox. Although I did get to play two years of semi-professional baseball upon graduating from high school, I soon recognized that my slowness of foot was not going to allow me to be a major leaguer.During high school and also during my first two years of college, I thought I wanted to be a Pharmacist. During that stretch of time, I worked in a drug store in the town I grew up in which was Westwood which is located 25 miles outside of Boston, Massachusetts. Mid-way through my second year of college, the powers-to-be increased the curriculum requirement for Pharmacy school from four years to five. It was then that I determined that I would leave school to fulfill my military obligation by joining the Marine Corps. Upon returning from boot camp at Parris Island, SC. and Camp Lejuene, NC and while awaiting my reserve unit’s orders to be shipped out to Vietnam, I began looking for a job. It was then that I began my hotel career at the Sheraton Boston as a Mail and Information Clerk. The Sheraton Boston was at that time one of the largest hotels in the country at 1012 rooms.