The Chesapeake Point of View

Under One Roof

Under One Roof

April 20, 2015

Lodging | April 20, 2015

IN 1957, ED SIMS HAD GRAND PLANS to take his freshly printed law degree and jet off to California with his wife, Jeanette. But there was something big keeping these newlyweds in Maryland—family. So Sims came up with a new plan that would bring family and business together under one roof. With financial assistance from his brother-in-law, he put a down payment of $10,000 on the Royal Pine, a 12room motel in College Park, Md. After the motel brought in $32,000 in the first year, they were off and running.

The Sims and their children called Royal Pine home for the next nine years, a period of time over which the Sims embarked on a series of renovations that gradually transformed the tiny motel into a 115-room Best Western that they sold for $3.9 million in 1988. From modest beginnings, the family business had evolved into a respected hotel management firm that currently operates 26 independent and branded hotels. Fifty-eight years have passed since brothers Chris and Kim got their first taste of the hotel industry, cleaning and preparing guest rooms in the Royal Pine, and they’ve never dreamed of leaving. At Greenbelt, Md.-based Chesapeake Hospitality, the brothers continue to build on the strong foundation established by their parents, with Kim as president and Chris as executive vice president. If this year is any indication, Chesapeake is growing fast, with the firm already adding three properties to its management portfolio—the Holiday Inn WilkesBarre-East Mountain in Wilkes-Barre, Pa., the Fenwick Inn in Ocean City, Md., and the Hotel Indigo Baltimore, which is set to open later this year. Chris says the revenue management investments Chesapeake made over the past five years are contributing significantly to the company’s growth.

“Every day our revenue managers are doing deep dives into industry data and making the most profitable channels in lodging work for us,” he says. “They’re acclimated to the data that we know immediately, when we’re approaching a property, where the business is coming from, where it’s going in the marketplace, and if we need to adjust our strategy to make the account more profitable.” This data-driven approach has given Chesapeake a leg up in turning around properties that are underperforming, as well as with properties that could be performing better than they are. “Recently, we’ve found that when we analyze a hotel that seems to be doing well, we can find opportunities to further drive the bottom line and give returns to the ownership group,” Kim says.

The relationship between Chesapeake’s senior management and the ownership group is also a key strength of the business. Chris says that there is a high level of personal engagement between Chesapeake’s ownership
group, members of senior management and the company’s principals. “This communicative relationship definitely sets us apart from other management companies, allowing us to be nimble and address problems head on without using a go-between,” he says. The Sims brothers have worked to create business partnerships that feel like an extension of the family, which in turn improves each owner’s experience with Chesapeake as a management company. Kim says, “The owners know they have a direct line to senior management and principals if they need it, which helps them become more comfortable with our processes.”

For the Sims brothers, carrying on their parents’ legacy means focusing on measured growth. Currently, they have plans to add three to five new hotels to their portfolio each year, perhaps even reaching beyond the East Coast to new markets out west. “We don’t need to be the biggest company,” Kim says. “But we do want to be the best. For us, that means continuing to deliver measurable results for our owners.”