After beginning his professional life as a marketing executive in the movie industry, Alex Kirkwood has made the unconventional transition to hospitality and built a company with a portfolio of ‘five-star’ properties that he hopes will continue to get positive reviews.
Kirkwood--who is founder and president of Kirkwood Collection--has now assembled five family-owned and operated boutique hotels throughout California, including the most recent addition, the Garden Street Inn in San Luis Obispo.
Kirkwood pointed out he was introduced to the lodging arena during his tenure at 20th Century Fox by some movie producers who had been successful in real estate and owned a hotel in Mexico. “So I learned a lot from them on the business and how intriguing it is,” he said.
Kirkwood started with an investment in 2013 in what would become The Palm Springs Hotel following a two-year renovation. Kirkwood and his family also invested in a couple of vacation rental properties in Rancho Mirage and Palm Springs as he identified the “convergence of hospitality and vacation rentals” as a significant trend. Kirkwood Collection grew from one hotel to four in just two years.
The company president acknowledged he is looking to eventually make Kirkwood Collection a household name in the boutique lodging sector and is marketing the company as such.
“When you think of boutique hotels in the U.S. no brand comes to mind and we want to come to mind; that’s our goal. When you think small boutique hotels in great markets that’s us,” he said.
Kirkwood detailed the company’s scope of services for what he hopes will be an expanding investor base in the coming years. “We try to provide the end-to-end service for the asset class because it is so unique. You’d never want a multi-family operator to run a hotel and you’d never want a multi-family asset manager to asset manage a hotel; they’re just totally different...We provide every service from acquisition to development, management and operations, marketing and eventually disposition or refinance. We kind of want to do it all and control it all,” he commented.
Kirkwood further noted the company “specializes in small properties, such as 10- to 30-key hotels.” Its other properties include Hideaway Santa Barbara, which debuted this past summer, as well as the Blue Sands Inn in Santa Barbara and 97 Lake Shore in Rancho Mirage.
With a portfolio rooted in conversions and adaptive reuses of historic buildings, Kirkwood emphasized the importance of differentiating. “If you look at each property in the portfolio they’re really unique and I never want to get away from that. I never want to see two Kirkwood properties and have them look the same. Our key recurring guest is a traveler who wants a boutique, locally infused experience and doesn’t feel that there’s a cookie-cutter box they’re staying in,” he noted.
Kirkwood, who did acknowledge some common elements among the properties, elaborated on the company’s approach to design. “We have kind of a design standard that we want to meet, but it is not a brand standard that you might be familiar with from a [traditional] flag. We don’t want to impose a singular view on a historic asset from Santa Barbara versus a historic asset in San Luis Obispo. The buildings help drive where we go and the history and architecture helps inform the interior design and what we want to do,” he explained.
The Garden Street Inn is a renovation of the historic Garden Street Inn hotel in Sal Luis Obispo. The 13-room boutique property--which is located within central-coast wine country--is an 8,000 sq.-ft. 1887 Italianate/Queen Anne Victorian Mansion. It will be redesigned by the company’s growing in-house design team led by Michelle McClory. The renovation will begin in 2020 with a reopening date of early 2021.
Kirkwood touted the potential of the hotel.
“We hope this will be kind of the crown jewel of the portfolio due to its historic nature and the opportunities with the architecture. It’s a phenomenal property in a great location,” he said.
In terms of future expansion, Kirkwood has said he would like to open three to four properties a year. He expects coastal locations like Seattle and Oregon to be next primarily as a result of his “broker relationships.” Kirkwood also noted the company will eventually look east for expansion describing markets like “Charleston, SC, and the outskirts of Washington, DC,” as being ideal locations for the brand.
He elaborated on the company’s criteria for expansion. “We typically focus on markets that are vacation destinations so if there’s a huge strong business travel component without much leisure we wouldn’t fit well there. We’re not trying to build a business hotel brand,” he said, adding of future properties, “they’ll probably stay pretty coastal. I like the high barrier to entry and having water on one side and mountains on the other.”
Kirkwood noted the company’s existing locations have performed well in terms of profitability and described its somewhat atypical approach to revenue management.
“We really drive occupancy, which is contrary to a more typical larger operator where they have hugely variable operating costs. We push occupancy, which helps us drive RevPAR [revenue per available room] in a market. We’re operating every property between 88 and 92 percent occupancy. Seasonality doesn’t matter. I will yield rate to accommodate that occupancy so we can keep our staffing pretty consistent. That’s kind of a unique driver for us. Our ADR [average daily rate] is the variable, not occupancy,” he noted.
Finally, Kirkwood reflected on the transition for him and the growth momentum the company has garnered in a relatively short period of time.
“When I left 20th Century Fox at the end of 2015 it was a real personality transition for me so that came with its challenges. But really taking what I learned from selling a two-hour experience in a movie theater to a two-night, weekend stay at a hotel; they’re not so different. It’s probably one of the reasons we’ve been able to grow so quickly is the ability to drive interest and occupancy to properties that historically didn’t have them,” he said.