In January 2020, Ensemble Real Estate Solutions & Investments began a new endeavor.
While Ensemble has developed hotels since its inception, the firm decided nearly three years ago to create its own hospitality management division, an initiative meant to give the organization more leverage to support its employees. Managing its own hotels, senior vice president of hotel operations Kristi Allen explained, would allow Ensemble to set its own policies regarding health benefits and employee engagement, rather than relying on a third party.
“When you’re an investor or an owner, we just discovered that no one manages your property as well as you do,” Allen said. “You care about it the most, you make decisions primarily for the good of the property.”
Of course, the timing would prove fateful.
While Ensemble had “big plans” in 2020 to build its infrastructure and release programs within its new management division, the year instead turned into a fight for survival for hotels, Allen said.
“A couple of our hotels were temporarily closed and business dropped off dramatically,” she said, “so the focus turned from building up our management division to really just struggling to take care of our employees and hold on to the hotels and make it through this pandemic.”
Rebounding from COVID
However, Ensemble’s position with largely leisure-based hotels rather than corporate- or group-oriented properties, helped it weather the storm. Leisure properties tended to be a stronger segment throughout the pandemic due to remote workers seeking locations with outdoor amenities such as the beach.
Now, over the last few months, Ensemble has begun to rebuild its customer base and move into a growth phase, according to Allen.
This past summer saw higher numbers of leisure travelers, she added, compared to the past couple of years, specifically in California.
As summer ended and people returned to the office, corporate travel such as meetings and conventions have also picked up and returned to pre-pandemic levels for the first time, both in Long Beach and throughout California’s Ensemble properties, Allen said.
Of Ensemble Hospitality’s seven hotels in California, four have exceeded 2019 revenue levels in 2022, according to the company.
Focus on hospitality management
Despite the hurdles of the pandemic, Ensemble’s hospitality management sector has still developed; since establishing its management division, Ensemble began a scholarship program at Hotel Maya that’s administered by the Long Beach Community Foundation and has since expanded to encompass employees, their children and grandchildren at three additional Ensemble hotels.
“We make sure that part of our mission is to take care of the communities in which our hotels reside,” Allen said. “So making sure our hotels participate in community giving, community events, whereas when you’re not the management company, you don’t have as much power, as much say in that kind of thing.”
Due to outstanding management agreements and a variety of other factors such as location, Ensemble does not manage all of its hotel properties, but it currently manages eight of its 13 hotels, Allen said.
Of its two Long Beach-based hotels, Hotel Maya is managed by Ensemble, and Residence Inn is managed by Marriott, Allen said.
Any new builds or additions to Ensemble’s portfolio will primarily be self-managed by the hotel management division as well, and Ensemble has several new projects in the works that will be joining Ensemble’s portfolio in the next couple of years, Allen said.
Ensemble just broke ground on its Santa Cruz property, La Bahia Hotel and Spa, and it’s scheduled to open its doors to guests in fall 2024. Additional hospitality projects are also in its development stages, Allen said.
The firm has also expanded its staffing to help facilitate this growth. At the end of August, Ensemble announced three new hires in its hospitality management division: Samuel Grant, corporate hotel finance director, Pam Ryan, corporate director of hotel operations, and Silvia Villegas, employee experience manager.
The addition of three new positions will allow Ensemble to strengthen its corporate infrastructure and will support the organization’s growth, according to a company statement.
Allen looks forward to continuing “to grow into an established management company that takes care of our employees and our guests,” she said. “We’re excited to have this new division and to be growing.”
A long history
Over the past 40 years, Ensemble has invested, developed and managed over $2 billion in real estate across the United States, including $500 million in Long Beach as of 2021, where the company has been based since 1996.
Although Ensemble’s portfolio includes hotels, commercial spaces and multifamily projects, Ensemble’s roots are in hospitality—its first acquisition back in 1980, a Santa Monica-based property, was an independently owned hotel, which then transformed into the Holiday Inn Bayview Plaza.
In 2005, Ensemble’s hospitality sector expanded with its acquisition of Long Beach’s Coast Hotel, which was then renovated into the Hotel Maya, a DoubleTree by Hilton.
“We’re based in Long Beach and we have this beautiful hotel here in Long Beach, and we just started growing from there in the hospitality division,” Allen said.
Allen credits Ed Proenza, who was in Allen’s role prior to her, with encouraging the growth of Ensemble’s hospitality sector.
While Ensemble reviews hundreds of deals, the company rarely actively seeks out new properties, and generally is presented projects by former partners or other companies, Allen said.
“We review each deal on its own merits—whether it makes sense for us, are they economies of scale, are there value adds we can bring to the table for that specific project,” Allen said.
While due to permitting processes, it can be more difficult to develop a hotel in California compared to in other states, the majority of Ensemble’s hotels are located in California, the company’s home base, Allen said.
Ensemble’s hotel portfolio also includes hotels in Arizona, New York, Pennsylvania, and New Jersey.
“California is always going to be a destination, it’ll never fall off of the top destinations in the U.S.,” Allen said. “We do like to build California properties because they’re always popular.”