Valencia Group Prospers In Tough Economy

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Recent interview with Valencia Group's Vice President of Operations offers information on past year's successes and defining a place in hospitality industry in 2012 and beyond.

Kretschmer says, "We’ve learned that if you take care of your guests, believe in your product and respect and reward your team, your culture stays intact – and that pays off with customer loyalty"

As one of only a handful of upscale hotel management and development companies based out of Houston and Texas, the Valencia Group has shown time and again that big things can come in small packages. During an economic downturn that has proven challenging at best for larger and more established businesses, Valencia Group has shined with thoughtfully executed and managed projects, plus a stellar track record that has maintained the confidence of investors and benefitted its own bottom line.

As Valencia Group enters its 10th year in business, Executive Vice President – Operations, Roy A. Kretschmer, reflects on Valencia Group’s management approach that has yielded Revenue per Available Room indices substantially above competitive sets and operating profit margins consistently at the top of the industry. The following are insights from Kretschmer in his own words.

Weathering the Storm
Thanks in large part to a very efficient cost structure, Valencia Group properties avoided cash calls and bankruptcies and actually increased market share during the downturn. While the industry witnessed numerous service and product downgrades, Valencia Group insisted on maintaining standards and holding onto staff. While not immune to the effects of the economy, in some instances, the company was able to double the penetration index of their competitors. Kretschmer says "We’ve learned that if you take care of your guests, believe in your product and respect and reward your team, your culture stays intact – and that pays off with customer loyalty".

The Chain Gang
With a portfolio of independent hotels, Valencia Group is able to flex pricing as necessary. This is contrary to some chain hotel operations, which must take into account rate ceilings set by a business model or customer pricing expectations related to brand. While Valencia Group properties are independent, they do harness opportunities that cross promote hotels to take advantage of a large database of repeat customers.

When Four are Better than Five
Valencia Group positions hotels at the very top of the four star category, purposely eschewing five star territory, which can often be more beneficial to a management fee than owner profits. By developing a culture of empowered service, the hotel company have achieved a superior delivery of guest satisfaction without a lot of the expensive and labor-intensive elements that can burden luxury hotels. Additionally, the cost to develop and operate a five star property can frequently exclude key secondary markets, where a high quality hotel would be welcomed.

To Boutique or Not to Boutique
Another defining attribute of the Valencia Group concept is broad market appeal. Although an exaggerated hip quotient might work in large markets, the associated attitude and form over function model has a limited shelf life, while eliminating a large base of repeat and long-term customers, some of whom might find the surroundings literally and figuratively uncomfortable.

Designed to Sell
Valencia Group's goal is to embrace strong design that is both contemporary and timeless. There are no prototypes. Each property makes a statement about its location and incorporates a sense of discovery – without becoming clichéd. Additionally, all properties begin their life cycle as “state of the art”, and quickly adopt technologies will truly enhance the guest experience without being gimmicky. An example is the TeleAdapt Media Hub; Hotel Sorella was the first North American hotel to offer this well-received product in guestrooms.

A Future Inspired by the Past
As the son of a hotel operator, Valencia Group President, Doyle Graham Jr., grew up in the hospitality industry during a time when many hotels served as community landmarks, and top properties honed their independence and unique charms. Valencia Group strives to recreate this golden era and has succeeded in creating hotels that are not only popular with out of town visitors, but that have also become gathering places for locals.

Texas Two Step
Both Hotel Valencia Riverwalk in San Antonio and Hotel Sorella CITYCENTRE in Houston continue to be market leaders with a reputation for top performance. Valencia Group is not regionally limited to Texas and California, where we own and operate Hotel Valencia Santana Row in San Jose. It just so happens that this is where their hotels are currently located, and both states provide an array of future growth opportunities. Kretschmer says "We are also looking to develop Valencia Group hotels in major gateway cities such as Miami, Boston, Chicago, New York and Washington, DC and secondary markets with higher barriers to entry, proven demand and consistent market performance".

Proudest Moments
When Roy Kretschmer was asked of his proudest moments, he says "I am constantly impressed by the dedication of our associates – the strong values they bring to our team and the ownership they bring to their roles. It is understandably exciting to see associates continuing to advance by turning jobs into outstanding careers. This dedication is evident in our incredibly low turnover rates and the numerous awards and accolades our hotels are bestowed each year".

About Valencia Group
Valencia Group, a Houston-based company, provides management, development, branding, and repositioning services for full-service, boutique, independent hotels owned by Valencia as well as third parties. As with Hotel Valencia Santana Row in San Jose, California, Hotel Sorella CITYCENTRE in Houston and Hotel Valencia Riverwalk in San Antonio, most Valencia-sponsored hotels are set in the cultural heart of each city. Valencia Group’s newest hotel concept is a 21st century re-interpretation of the nostalgic motor court. The flagship will be Lone Star Court, an authentic Americana roadside hotel, that will open in Austin’s Domain in early 2013. Valencia Group hotels fuse globally-inspired modern design with Mediterranean influences, becoming popular destinations for guests and visitors alike. Valencia Group continues to forge its position as a mixed-use anchor with projects where the right balance of residential, restaurant, retail and office coalesce to create full-spectrum accretive value in great urban settings. Known for exceptional service and style, Valencia Group properties have received international recognition by magazines such as Condé Nast and Travel + Leisure, and by discerning travelers seeking a memorable experience. For more information, please visit http://www.valenciagroup.com.

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Amy Trench
Valencia Group
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