Pacrim now thinks laterally

Pacrim’s Glenn Squires

HALIFAX—Glenn Squires, CEO of Pacrim Hospitality, says the recession has been a “mixed bag” for his company, since they have properties spread across Canada in every province except Manitoba. Eastern Canada is doing quite well, and even in Alberta hotels are still doing well although their numbers are off compared to a couple of years ago.

In terms of business, Pacrim’s goals in this recession are to move market share, maintain or improve levels of customer satisfaction, try as best they can to maintain capital projects and be careful about costs.

“But,” says Squires, “there are some good opportunities out there” in small communities, working with First Nations, looking at projects with Middle Eastern groups who want to invest in Canada, and starting Pacrim’s first two or three projects in Mexico.

Opportunity in small centres

By small communities, Squires means really small – communities from 500 to 10,000 people.  Pacrim has developed two models to service these communities, the country inn model and the small hotel model.  The country inns can be as small as 18 rooms, while small motels will typically be 35 to 40 rooms. Once the demand gets beyond that size, Pacrim looks at brands such as Super 8, Holiday Inn Express and Hampton Inns.

“In rural areas, the inventory is starting to get old, and there aren’t opportunities for brands in those markets.  We have established a model to provide to inventory for communities with a workable [situation].”  In Atlantic Canada smaller markets might include places like Liverpool, NS, Florenceville, NB and Bonavista, NL.

“From a leisure perspective, many people start their vacation by staying in one of our hotels in Halifax, but they’re looking for the rural Nova Scotia experience,” says Squires. This means the company has a vested interest in improving the quality of rural properties, he adds. If there’s erosion in the quality of those rural hotels, it affects Pacrim’s market. And the area has already seen an erosion of the American market.

“We believe we’ve got to focus on domestic and other international travel,” he adds, pointing out that rural or ‘soft adventure’ is where Pacrim foresees growth.

Ventures with First Nations

Pacrim has worked with First Nations groups on a number of projects across the country, including the Super 8 in Yellowknife, where it worked with the Innu, managing the hotel until it was bought by Pacrim’s public arm, Holloway REIT.  Similarly, Pacrim worked with the Mikisew on the Super 8 Fort McMurray, AB property, and with the Millbrook First Nation on the Super 8 in Truro, NS.

Typically, Pacrim will develop hotels and when they have “matured,” the company will offer them to the REIT first. That means Holloway REIT effectively has a proprietary pipeline of hotels. If Pacrim develops them first, that makes for a smooth transition, since due diligence costs are lower and the REIT would have to pay acquisition costs. “The development strategy is that through Pacrim there is an ongoing group of hotels for the REIT to buy.  Pacrim develops the majority of the hotels they decide to buy.

“These have all been very good projects for us,” Squires adds.

Projects with Kuwait

Pacrim is the only hotel group he knows of that has worked with companies from the Middle East on projects that are built based on Sharia law. The first project, built in conjunction with a group from Kuwait, was the Hampton Inn in Saint John, NB. The Kuwaitis stipulated that the hotel would not serve alcohol or pork, and would not have X-rated movies.  Their lending practices are also different from those in Canada.

Pacrim currently expects to start their first two or three properties in Mexico, and feels there are significant opportunities in Latin America.  “We are working with Intercontinental Hotels Group, plus local investors and developers in Mexico, specifically Merida and Tehuacan,” Squires says.

“There are unique opportunities.  Maybe two or three years ago we may not have looked at some of these things.”

Pacrim’s expansion will be predominantly from Ontario east. “We have 25 hotels in Alberta and BC, and with the oil and gas situation, we feel the opportunities for diversification are better in the East,” says Squires. “Atlantic Canada is no boom, no bust, other than Montreal.  These are more stable markets in the interim. We know the area well—we have 20 hotels there.”
 
But Pacrim only has eight hotels in Quebec and five in Ontario. “We’re underexposed in those areas,” he states.

The company has no near-term plans to expand in Saskatchewan despite its hot economy.  “The construction costs are too high,” Squires says.

Measurable targets

A company that believes in measurable results, Pacrim focuses on five things: market share, measured by Smith Travel Research; product quality assurance measured using brand ratings such as the Holiday Inn OSAT guest satisfaction system, plus Canada Select, CAA/AAA and health and fire department inspections; employee satisfaction measured using an in-house model developed by Gallup; and sales productivity measurements for each of their sales people.

“We know the current status for each hotel—how it stands vis a vis the brand and the competition. We set targets for each hotel, and if it meets or beats its targets, financial results follow.  There are targets for everyone from me to the room attendants.  If there is a customer satisfaction problem in housekeeping, we can work together to improve the hotel’s overall score.  The key is that it gets everyone in the organization focused on what’s important vis a vis what’s successful.

“We don’t necessarily want to be the best hotel in the market, but we want to be the best in its segment.”

The company currently has a 99-room Holiday Inn Express under construction in Deer Lake, NL.

It has grown from just four hotels in 2000 to the current tally of 60.

Originally from St. John’s, NL, Squires worked with Atlific Inns and Fortis Properties before joining Pacrim.

Hotels across Canada win multiple awards

Kudos for Radisson Halifax

The Radisson Suite Hotel Halifax, located in the city’s downtown core, has earned two international awards for guest service excellence from Radisson Hotels and Resorts, The Americas. The property, owned by Holloway Lodging Real Estate Investment Trust (REIT) and managed by Pacrim Hospitality Services Inc. was named as a Gold Level, President’s Award winner and as the recipient of a “Yes I Can” Award from the brand for 2008.

L to r, John Valetta, president, Super 8 Worldwide; Ian McAuley, Superior Lodging Corporation; Lorna Knoll, Pacrim Hospitality Services Inc., and Super 8 ambassador Richard Petty with the Super 8 Langley award.

Pacrim Super 8s honoured

Three Super 8 hotels in the management portfolio of Pacrim Hospitality Services Inc were presented with Super 8 Worldwide Awards of Excellence at the international brand conference in February in Orlando, Florida.

Tracie Maynert and Eleanor Heidelberg, team members at Super 8 Langley, British Columbia were recognized with a Golden Pineapple Award for their consistent achievements in leading the hotel’s support of community fund-raising events.

Heather Fiala, affectionately known by guests as “The Breakfast Lady” at Super 8 Barrie, Ontario also accepted a Golden Pineapple Award for her outstanding guest service and attention as the Breakfast Bar manager. Her personal touch with guests has been identified by many as an important reason for their loyalty to the hotel.

The team at Super 8 Calgary-Shawnessy, which over the past several years has raised as much as $100,000 for cancer research, was recognized with a Spirit of Super 8 Award. The hotel hosts Calgary Stampede events, such as a Pancake Breakfast, annually.

During the awards presentations Pacrim Hospitality Services Inc (PHSI) and CEO Glenn Squires received the Dennis Brown Memorial Award recognizing achievements in developing a significant number of Super 8 properties across Canada “from the ground up” from John Valetta.  Established in 1990 the award is made in memory of the co-founder of Super 8 Worldwide.  There are 30 Canadian Super 8 hotels in the portfolio of Pacrim Hospitality Services Inc.