An ancient Chinese saying advises that you “borrow a road”to reach your objective. If someone else has access to your customer, thenborrow his road to share this access.
Thayer Lodging has successfully run numerous real estatefunds focused on owning hotels. They have raised over a $1 billion in equityand every fund has been profitable. “Some individual investments have lostmoney,” Lee says. “But every fund has made money.” They have produced animpressive and consistent return on investment by real estate standards.
All of this activity for Thayer Lodging gives Lee and Fred aunique opportunity to pursue opportunities few others can.
For example, they began offering online reservations formany of its hotels before others were doing so. The activity grew unexpectedlyquickly. One of Thayer Lodging’s hotels in New Orleans was producing over 50percent of its reservations online. Lee and Fred saw there was an unmet need toenable such online reservations for all hotels.
So they spun out a new company called TIG Global whichdesigns and builds hotel web sites and drives people to the site throughaffinity marketing and other online tools. Today TIG Global represents about1,100 hotels and has 130 people in Washington, D.C. and another 60 individualsin India working with it.
Lee and Fred also launched a fascinating new “corporatemeetings” business. Since I speak at a lot of conferences around the world, Ican appreciate how the wrong hotel partner can complicate such events.
As Leesays, “If you hold a meeting for five days at a traditional hotel, thebill comes in a ‘banker’s box’ because you get a different piece of paper foreach fax, pay an extra charge for orange juice, pay $500 to rent the LCDprojector, etc.” Hotels run meeting services like restaurants run bars.Since you are there for the dinner, they figure you don’t mind giving them anexorbitant margin on the drinks.
To address this, Lee and Fred created EMCVenues. This is a meeting venue, insidea hotel, designed from scratch with the business meeting planner in mind. Youpay a flat fee for usage of many things. You get access to orange juice, allyou can drink, without having to keep track of and pay for each bottle. Thehigh tech interior makes video conferencing, presentations, and sound systemseasy to use. No need to book a lot of hardware ahead of time or for atechnician to wheel in a load of black boxes.
Lee and Fred have also gotten involved in a fascinatingcompany called PURE, which uses various technologies to reduce the allergens ina hotel room. They thought the service would be most demanded by high-endhotels, but later found that lower-end hotel users were more willing to forkover the premium to get a “pure” room.
By owning a diverse mix of hotels, Fred and Lee have unusualinsight into their consumers’ wants and needs, which they use to consistentlybetter their products. It is part of what makes Thayer Lodging so successful,and it is what makes its founders Lee and Fred into such remarkable outthinkers.
There is so much moreI would like to say about this fascinating company, innovating in one of theoldest industries. But, as usual, the opportunities outweigh the time. Askyourself the questions below to see how you can explore similar tactics.
- What road am I on?
- Is there a road I can borrow (e.g., to reach my customer)?
- Is there someone who would value borrowing my road?