Davidson launches new operating division focused on resorts

Sheraton Kauai

Atlanta-based hospitality management company Davidson Hotels & Resorts has launched a new operating division focused on managing resorts. Davidson Resorts will specialize in “complex, high-touch assets” with a portfolio of large-scale properties with multiple food-and-beverage outlets, retail, leisure activities like golf, spa, ski, water sports and more. Steve Contos has been appointed executive vice president of Davidson Resorts. 

“We've always kept our focus on those full-service assets that take a little more refined skill and we've built our entire corporate team around that,” said Thom Geshay, president of Davidson Hotels & Resorts, citing the company’s 2016 launch of its Pivot division as a precursor to this new development. But as Pivot grew, the company found that operating large-scale hotels with a lot of elements required a distinct skill set. “You really [have to] have the skill and background to maximize that spend from those guests and really create an experience that drives the top line but also understanding how to create value in the asset by growing the bottom line,” Geshay said, noting that more than 50 percent of the company’s revenues come from guest spend on food and beverages, spas and other ancillary items. 

Dividing the company’s 61 hotels (comprising 16,912 guestrooms) into different divisions—Davidson, Pivot and now Resorts—will help make sure each asset is able to deliver the needed experience, Geshay added. “We're not trying to operate hundreds and hundreds and hundreds of hotels,” he said. “We're not lumping all our properties from select-service to full-service into one portfolio. We're creating highly customized divisions specialized in the attributes necessary to be successful in that space.”

Growth Plans

Davidson Resorts will launch with 11 existing properties, including the Grand Hotel on Mackinac Island, Mich.; the Margaritaville Hollywood Beach Resort in Hollywood, Fla.; the Don CeSar in St. Pete Beach, Fla.; the Paradise Point Resort & Spa in San Diego, Calif.; and the recently renovated Sheraton Kauai Coconut Beach Resort in Hawaii. The resort division also includes additional properties in Orlando; Palm Springs, Calif.; and Colorado. The division comprises 3,446 guestrooms.

The division's growth strategy primarily will focus on domestic additions while exploring International markets like Mexico and the Caribbean, and the company expects stabilized annual resort revenue could reach nearly $1 billion over the next five years. Pre-COVID, Geshay said, the properties already in the Resorts portfolio were bringing in approximately $350 million in total revenues. “The investment community needs to see that we've committed to the space and that we have the resources to be best-in-class there,” he said. “When we deliver those results, that provides growth.”  

“There's really nowhere we cannot go,” Geshay said. “Every market is open, but not every market’s a resort-type property and not every asset needs the type of focus that you would [need] for a resort.”  The company will be looking at “premier destinations” for the division’s growth, he said, but could not share specifics on where the next properties would be. 

Lessons Learned

The pandemic, Geshay said, has taught the industry “a lot” about consumer behavior, particularly with the relative resilience of leisure-focused hotels compared to urban and business-focused properties. “People have become more aware of their surroundings, and so it's very important for those of us in the hospitality business to be over-sensitive to the fact that we have to create an environment where people feel safe,” he said. “That's something that we're going to have to stay focused on, and I think there's going to be a lasting impact [from] that.” 

Geshay also expects corporate and group travel to bounce back soon, and wants to position the new division to attract product launches, incentive travel and large-scale group events. “Things like that were a big part of our investment stream prior to COVID,” he said. “That will come back as well, but but we're looking at those a little differently.” The resorts will need to be able to host hybrid in-person and digital events, he explained, and the process will need to be seamless. 

These lessons, in turn, will help drive growth not just for the Resorts division, but for Davidson as a whole. “Davidson will go where our investors take us,” he said. “The partners that we invest with and operate for our portfolio will grow in the markets that are important to them. But, really, it's a wide open canvas as far as that goes.”