Project Overview
2002 – 2010
The Hilton Scranton & Conference Center had a history of long-stalled beginnings, but ultimately, with a clear strategic vision and through collaborative efforts with the property management team, this non-performing hotel transitioned in to an income generating investment. Construction of the 175-room Hilton Scranton began in 1999, and was subsequently stalled in 2001 due to financing issues. The financing was resurrected in 2002 and CHMW was engaged by the project’s lender, to serve as an integral part of the project revival team. During the construction phase, CHMW provided asset development services to assist with overseeing the hotel’s completion and coordination between the general contractor, original operator, franchisor and the represented lending group. The hotel was completed and opened for business in August 2003, but was significantly challenged by various market and operational issues, such as a severe lack of parking and a failing operating team. The lender eventually assumed full ownership through a consensual foreclosure necessitated by poor performance. CHMW developed an interim strategy, including taking on the day-to-day oversight of the management team, relative to certain accounting functions, capital decisions and operational strategies. Critical to this strategy was identifying a professional management company with demonstrated experience in managing and marketing a conference facility. CHMW identified viable management candidates, made recommendations and played an active role in the selection process. Once in place, CHMW and the new management team worked to establish performance targets that were tied to investment goals, developed measures to flex expenses as business volume ebbed and flowed to maximize profitability and focused on a market positioning strategy to optimize business mix and increase operating cash flow. These strategies, in tandem with other value enhancement initiatives, such as negotiating favorable parking terms and pursuing a retroactive real estate abatement, provided a platform of stability needed to transition the Hilton Scranton from a nonperforming asset to a viable operation, achieving cash flows consistent with investment objectives.
Successes
Redirected sales and marketing strategy and deployment to optimize market positioning and group sales.
Operational Asset Management
- Advised on new management company selection, as well as supported ownership during management agreement negotiations resulting in improved terms.
- Transitioned new management company and Executive Committee, and implemented effective cost control initiatives.
- Drove marketing strategy, focusing efforts on conference groups, tripling bookings for 2006.
- Facilitated favorable parking terms and retroactive real estate tax abatement totaling an annual impact of $450,000 annually.
- Increased EBITDA from $0 to $1 million over a 12-month period.
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