From Hotelier Magazine December 2009, Written by Rosanna Caira
COMPANY OF THE YEAR
From humble beginnings, Atlific Hotels celebrates its golden anniversary by growing its portfolio and expanding its reach
Since Atlific Hotels opened the doors to its first property 50 years ago, the lodging landscape has changed dramatically. Back in 1959 the fledgling Holiday Inn brand didn’t even exist in Canada. Atlific was the first operator to bring the now iconic brand north of the 49th parallel, opening the Airport Châteaubriand in Montreal and spearheading future growth.
Years later, when Atlific, helmed by Dennis Kral, wanted to diversify its holdings, it looked further afield to the foodservice industry and became the franchisor of Wendy’s Restaurants of Canada. While the association with Wendy’s no longer exists, and the Kral family sold the company to Florida-based Ocean Properties Ltd. in 1997, Atlific has reached the pinnacle of success through a strong hands-on approach executed with little fanfare. Today, it boasts 43 hotels and 6,834 rooms representing 12 brands from coast to coast.
Whether it’s assuming new management contracts for independents such as the Capri Hotel, Trade and Convention Centre in Red Deer, Alta., or building exciting new projects like Le Westin Montréal from the ground up, Atlific is an innovator in hospitality management. When Marriott Hotels and IHG wanted to introduce new flags in Canada (Residence Inn by Marriott; Indigo by IHG) both companies turned to Atlific to do it.
Through its sound operational practices, an ability to strategically secure new contracts by fostering strong relationships and a solid commitment to HR principles, the future looks bright, too.
Sound Operational Practices
Clearly, the brands relate to Atlific. “The more properties we add to our portfolio, the more they’re attracted to us,” says Robert Chartrand, Atlific’s 54-year-old executive vice-president and CFO. “We have a hands-on approach and we don’t have unnecessary layers.
We don’t have to go to committees to make a decision. We can help on a dime.”
The affable Chartrand also believes Atlific’s accounting systems are second to none, and he’s extremely proud of its revenue management department. “Our director of IT has been with the company for 42 years. He has a strong understanding of accounting and that’s why our systems are so good,” explains Chartrand, who’s been with the company for 26 years himself. Atlific was an early developer of a centralized management technology that allows properties within the portfolio to track and maintain everything from payroll to profits on one centralized system. It gives managers the ability to process financial data at the hotel level and allows them to access financial statements on a daily basis so they can track performance in real time.
“We provide more services than the dollar clients pay us,” says Philippe Gadbois, senior vice-president. At 58, Gadbois, brings extensive brand experience to the table, having spent more than 25 years with Hilton Hotels before arriving at Atlific three years ago, via a stint at Realstar. “Most management companies don’t provide centralized accounting. We also do e-commerce and we don’t charge for it. It’s our way of adding value.”
Strategic Vision and Leadership
Fuelling the company’s success is a respected and committed executive team that’s constantly seeking new opportunities. And unlike larger hotel companies, which are comprised of a multitude of layers, dealings with Atlific are fluid and seamless. “Brand representatives speak to me, Robert Leoppky (vice-president, Western Canada), Raymond St. Pierre (vice-president, Eastern Canada) or Philippe Gadbois,” says Chartrand.
When the company appointed five local area directors across the country last year, it did so to ensure that strategic leadership and support was close to each property. “It’s not a glorified title,” Chartrand explains. The area directors ensure Atlific has a greater understanding of the specific market and context in which each hotel there operates. They also allow for closer relationships with hotel owners. “It’s a way to leverage the know-how and information that comes from the top.”
At the heart of what makes Atlific so successful is its recognition of the importance of good relationships. “We’ve developed strong long-term relationships with our third-party owners,” says Chartrand, referencing the Gillin family in Ottawa, which has trusted the management of four of its hotels to Atlific — the Residence Inn by Marriott Ottawa, the Lord Elgin and Indigo in Ottawa, and the new Residence Inn in Kingston, Ont., set to open in 2010. Similarly, when the owner of the Holiday Inn Vancouver decided to open a Four Points by Sheraton in Gatineau-Ottawa, he turned to Atlific to do it.
A great relationship with its parent company has also helped spur growth. Ocean has had strong relationships with Marriott and Starwood properties in the U.S. for years, helping Atlific secure several new contracts in the Great White North as well.
“Atlific has experience in Canada with coast-to-coast distribution,” says Scott Duff, senior director, Development, at Starwood. “So whether you’re talking about resorts, tertiary markets or secondary cities, they have a wide spectrum of brands, from the upper end to economy.” Starwood currently has three hotel projects managed by Atlific: a planned conversion to the Red Deer Sheraton, the Four Points by Sheraton Gatineau-Ottawa and Le Westin Montréal. “They understand what a brand’s sacred issues are,” Duff continues. “We don’t have to waste time, and that’s made our dealings a lot more expedient.”
The People Principle
As a key player in the hospitality industry for half a century, Atlific has always recognized the value of motivated, happy employees. In fact, it’s affectionately viewed by many as one of the pioneers of hospitality training in the industry. “If you look at Canada’s hotel landscape, a lot of senior people have gone through Atlific,” says Gadbois. Many of the company’s 47 employees — divided between its head office in Montreal and regional offices in Toronto and Vancouver — have been with the company for years. “Average seniority at the corporate office is 15 years,” Gadbois says.
That history is important, but Atlific doesn’t rest on its laurels. In 2008, the company created the Key Personnel Development Plan initiative to encourage growth and development for each manager within the company. Since implementing the program, the company’s top GMs have transitioned into area directors with key roles in the strategic future of the organization. “It recognizes GMs for their years of service,” says Gadbois, “and it adds to growth without adding to overhead.” The company also recently launched its “Hire Right” program. “It’s all about leveraging — if you involve people, you’ll get more out of them,” says Chartrand.
Not surprisingly, that focus on training and developing has produced enviable results. In 2008, the Victoria Marriott Inner Harbour was awarded Marriott’s North America Hotel of the Year for overall performance and guest satisfaction. And Deerhurst Resort in Muskoka, Ont., was chosen as the site for the 2010 G8 World Summit.
While many hotel companies have struggled through a challenging year, Atlific is pleased with its recent achievements. Forecasted sales in 2009 are expected to hit $310 million. In the past two years, sales have grown 20 per cent. And during the past three years, 16 additional properties have joined the portfolio, including three in 2009: the Capri Hotel, Trade and Convention Centre in Red Deer, Alta.; Le Westin Montréal and the Four Points by Sheraton Gatineau-Ottawa, adding another 872 rooms to the system. In 2010, a Residence Inn in Kingston will also open its doors.
“This year will not go down as being great for our business,” says Gadbois, noting that in some markets Atlific has fared better than its competition. “The fact that we have no flagship property in downtown Toronto or Vancouver has helped us. But we also operate a hotel in Moose Jaw, and it’s operated at over 80 per cent occupancy this year,” he says, pointing to the dramatic differences acrosss the country. Still, ADR ranges from $100 to $300 with RevPAR coming in between $70 and $80.
After four years in development, Atlific finally opened the much anticipated Le Westin Montréal this past May, a unique property representing the largest project in its 50-year history. “It was a tremendous amount of work,” says Chartrand, explaining the long gestation period of the hotel. The company won the public tender against a number of other prospective developers. “I had to meet with different committees in the city, as well as architects and designers to help put the project together just so we would win the bid,” explains Chartrand. “We were dealing with an asset that was city-owned and they saw in our approach the best deal to reinvigorate this part of the city by bringing a hotel, some office and commercial space and a spa,” says Chartrand, referring to the mixed-use complex that emerged.
In what was one of the biggest construction projects to hit the city in years, Atlific transformed the three historic towers that once housed the Gazette newspaper and incorporated a new hotel tower to create a stunning piece of architecture boasting 454 guest rooms and 40,000 square feet of meeting space. Unfortunately, when Atlific inked the deal in 2005, Chartrand had no idea the hotel would open in the midst of a global economic crisis. “It’s unfortunate,” he says, “but it’s unfortunate for the industry at large.” Still, ADR at the hotel is just under $200 and occupancy is hovering around 50 per cent (on a partial year). “Next year we should be closer to market average,” says Gadbois.
Despite the difficulties, Chartrand is extremely proud of the project. “It’s given us an opportunity to relaunch the Westin brand in Montreal, and the energy that was put into it for the past four years is simply amazing.”
Projects like Le Westin Montréal help build Atlific’s profile, but the company’s work in the community gives it a sense of purpose. Through the years, Atlific has worked with local charities determined by the hotels themselves. Each of the 43 properties supports at least one local charity with many supporting up to 10. The initiatives have resulted in contributions to more than 100 charitable organizations, producing lasting results. In 2008, for example, the Holiday Inn Hotel & Suites Vancouver Downtown won the Hotel
Association of Canada’s Hall of Fame Award of Excellence for Humanitarianism. Among the highlights of its program was the creation of the Indigenous Scholarship program, which helps First Nations youth achieve educational goals.
While many hotel operators will be happy to see 2009 draw to a close, Atlific can look back with quiet satisfaction at its solid positioning during its milestone 50th year. “It would have been nice to reach 50 properties in our 50th year,” says Gadbois, “but we believe that’s achievable in 2010. The opportunity for us to pick up distressed products is there. So it’s important for us to get the message out that, ‘If you’re not performing at the level you’re hoping for, why don’t you ask us to come on board?’ After all, we’re pretty good at what we do.”