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A2Z In The News In Business Observer

John Zaccari had a resume filled with hotel management experience in New York. But he got into the Florida Gulf Coast hospitality industry back in 1989 simply by answering the phone.

“I was a professional umpire in the Grapefruit League and was checking into a hotel in Sarasota,” he recalls. “The phone was ringing and ringing and there was no one there to answer it. Having a hotel background, I reached over the desk to answer the phone, and it happened to be the general manager of the hotel wondering where his staff was.”

Impressed with Zaccari’s take-charge attitude, the GM worked out a deal for Zaccari to stay at the hotel at a discounted rate in exchange for taking on some shifts. It was just a matter of time before Zaccari became more concerned with filling vacancies than calling strikes. “The hotel opportunity just bypassed the baseball opportunity,” he says.

Since then he served as general manager of Crescent View Beach Club on Siesta Key and Holiday Inn Harborside in Punta Gorda. When Hurricane Charley destroyed the Holiday Inn in 2004, Zaccari was without a hotel to manage. That’s when he decided to go into business for himself, with his own hotel-management firm. That company, Sarasota-based A2Z Hospitality Management, contracts with hotel owners and investors to provide services related to everything from development to day-to-day operations.

And with the recent surge in tourism in the state and region, A2Z, like many industry peers, has seen an influx in business. Lou Plasencia, founder and CEO of The Plasencia Group, which advises institutional and high-net-worth clients on resort and hotel transactions throughout North America, says the market is on a high not seen in decades. Occupancies, says Plasencia, based in Tampa, are extremely strong, and rates have grown dramatically from northern Pinellas County to Naples.

“I’ve been at this for 35 years,” says Plasencia, and “from a performance standpoint, this is the healthiest I have seen the [west coast of Florida] market ever.”

Open for more 
That strength was not visible a decade ago, when Zaccari, to get the business going, worked with the developers replacing the Punta Gorda Holiday Inn with a new Four Points by Sheraton. That property is now the longest-held asset in A2Z’s portfolio.

Other A2Z holdings include the La Quinta Inn & Suites Port Charlotte, Microtel Inn & Suites Port Charlotte, Hibiscus Suites in Sarasota, Captiva Beach Resort on Siesta Key and Ramada Venice Resort. The firm had $22 million in revenues in 2014, up 27% from 2013.

“Our focus is to stay small and to stay in the area that we know best,” says Zaccari. “As a small organization, we can shift courses a lot faster than most companies. So if we see an opportunity, we can jump on that opportunity.”

The close proximity of properties and manageable size of its portfolio also allows the company to be hands on. “Where most big management companies manage their properties via the Internet and by looking at spreadsheets, we’re actually on the streets hitting each and every one of the properties, knowing what’s happening on a daily basis,” says Stephen Svecak, A2Z’s vice president of operations.

The company manages growth in the same thoughtful, strategic way. It recently took on management of a resort in upstate New York. But there’s A2Z staff on the ground there, and both Zaccari and Svecak grew up in and return often to the area. So they can take their usual approach with the property, despite the fact that it’s outside of Florida.

And A2Z is open to adding more Southwest Florida hotels to its roster. “We’re always looking to grow,” says Zaccari. “But we’re conscious of growing within our reach. Our goal is to gain one to two hotels each year.”

‘Coming back’
Like Plasencia, Cihan Cobanoglu, a professor and official at the College of Hospitality & Technology Leadership at USF Sarasota-Manatee, recognizes this is a good time to be a hotelier. “Globally, the hotel industry has been on the rise,” he says.

Metrics like occupancy rates, average daily room rates (ADR), and revenue per available room (RevPAR) have all been on the rise nationwide, with more growth projected. Cobanoglu, for example, says a 6.6% increase in RevPAR in the U.S. market is expected in 2015.

In Sarasota County, where A2Z has three properties, the average annual occupancy rate increased from 68% in 2013 to 72% in 2014. The average daily rate for 2014 was $159.61, up significantly from 2010’s recent low point of $130.99.

“Our area hotels have more heads on beds and they’re paying more for hotel rooms, which will bring more revenue to the hotels,” says Cobanoglu. “Things have been so depressed for the last six, seven years, but now the industry is coming back.”

There’s also a lot of current and potential hotel development activity in downtown Sarasota and elsewhere in the region, spurred by these kinds of increases. “When you start to see occupancy rates year-round average over 65%, that then creates an opportunity for hotel developers to come in and look at new product,” says Visit Sarasota County President Virginia Haley.

Plasencia, too, sees strong potential for new or redevelopment resort projects on the Gulf Coast, thanks to availability of sites in places like Charlotte County and the area’s affordability compared with spots like California and the east coast of Florida. “In the next five to seven years, I think we’ll see two or three resort properties break ground on the west coast of Florida,” he says.

Stay consistent
While that work is pending, the key to the now for A2Z, Svecak says, is to partner with the right kinds of owners. “We look for ownerships that are committed,” says Svecak. “If an ownership is willing to put back into the project, we’re willing to work with them.”

A2Z partners with owners nearby and outside the area. The company’s compensation is tied to performance, and it has a list of stats and accolades it can roll out to demonstrate a job well done. The Four Points by Sheraton Punta Gorda Harborside, for example, has won numerous awards within the Starwood organization — including Hotel of the Year in 2010 and 2011 — and all A2Z properties enjoy predominantly positive reviews and rankings on TripAdvisor.

After taking over the La Quinta in Port Charlotte in late 2012, A2Z increased 2013 revenues 22% from the prior year. A similar increase occurred after it took over management of the Hibiscus Suites in 2011. All the hotels in the A2Z portfolio had an average increase of 26% in revenue per available room over the past year, adds Svecak. One hotel posted a 36% increase in that metric.

“A2Z has a very good reputation, very good operations, solid management team, and a lot of good experience,” says Plasencia. “For a company like A2Z, it will continue to grow its product and eventually evolve into taking on larger projects, since it’s got great experience in the arena already.”

A2Z weathered the challenges of recent years — the depressed economy, the BP oil spill — by staying as lean as possible in areas that didn’t impact customer service. And now that the market is on the upswing, the firm is investing in improvements. It recently contracted with well-known customer service training firm Signature Worldwide, for instance, to work with A2Z’s employees and managers.

“This would be the time not to hire that customer service training, because you’re doing so well,” says Cusic Daniels, president of Thurman Hotel Consultants, which handles sales and marketing efforts for A2Z. “But A2Z and the owners it works with are proactive. They’re doing it now to maintain things going down the line.”

One potential hurdle for A2Z, given the industry rebound, is if an owner of a property it manages receives a can’t-refuse offer to sell. Plasencia says that’s a distinct possibility. “I think people are figuring out if there ever were a time to get out, now’s the time,” says Plasencia. “The volume of activity as well as the prices people are paying is outstanding.”
Zaccari says a consistent approach to doing good work is A2Z’s best protection against that kind of disruption.

“Our owners are constantly asked if they would they sell their properties,” says Zaccari. “And in the back of our minds, we’re thinking about what’s their temptation to finally sell the hotel, leaving us a void to fill. That’s why it’s important for us to be out there doing our job, to make other investors want to invest with us.”

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