Orestes Fintiklis has had a busy year. The Cypriot entrepreneur recently announced that the former Trump International Hotel & Tower Panama – which is owned by Ithaca Capital – is going to be rebranded in September 2018 and operated as a JW Marriott hotel. Here Fintiklis reveals what he looks for when investing and the importance of reputation in the property industry.
Solid foundation and room to grow
When investing in a hotel, there are a number of parameters that cannot be changed, such as location, accessibility and the structure of the building. These are called the “constants”. There are other factors that can be changed, which we call the “variables”. Of the elements that can be altered, some are within the owner’s or operator’s control. These “controllable variables” include service, cost structure and the effectiveness of your sales strategy. Others – known as the “uncontrollable variables” – are not within an owner or operator’s control. They include the fundamentals of supply and demand – after all, nobody can beat the market.
What we are looking for when we invest in a hotel is for it to have solid “constant” parameters as well as opportunities to improve the “variables”. The potential for growth beyond the current cash flows is vital. Our ideal investment is one where “constants” are high quality, whilst the “controllable variables” have a lot of room for improvement. We are looking for a hotel with a market that is currently depressed, but with fundamentals pointing towards future growth, such as supply and demand imbalances that are in the process of being rectified, or markets growth.
Reputation is paramount
In any industry catering to the end consumer, reputation is of paramount importance. Our demand comes primarily from the East Coast of the US and Latin America, so any brand whose reputation is tarnished among the affluent travellers in those geographies can’t possibly perform. The reputation of a property is shaped by years of service and consistent hard work, as well as having a professional management team with an unblemished name. Reputation takes years to build up, but it can be lost very quickly.
The affair with our Panama property attracted a lot of media publicity. This hotel is one of the few instances where we had to change the operator, and due to very special circumstances, also manage the hotel for an extended period of time (around six months), until a new international operator transitioned to replace the old one. The success of this hotel is fundamental to the thesis of Ithaca Capital, of acquiring assets with deep value and actively asset managing them.
Hard work is everything
The skills that make a good leader could be the topic of a thesis spanning volumes. A strong leader will display a combination of certain in-born qualities, such as raw intelligence. But they also display skills that are cultivated through hard work, such as ability to influence people, patience, fairness and organisational skills.
Before becoming a managing partner at Ithaca Capital in January 2017, I was a partner at Dolphin Capital Partners. I had been hired by the founders and through hard work I ascended through the organisation. With Ithaca Capital, it was a matter of starting a new investment company, with success based on the ability to raise capital from investors and in identifying appealing investment opportunities.
Don’t let bad luck set you back
I have faced many challenges in my career. Perhaps the biggest was the recent transition in Panama - there was an ugly litigation. Staying focused, and keeping a clear and balanced mind was key. Now the transition is advancing smoothly. The hotel team is really talented and Marriott is a very experienced and professional organisation on all aspects of operations, including transitions.
I would also advise anyone trying to grow their business simply to keep trying. Many great plans do not work either because it is not the right time or because of sheer bad luck. The more you try, the more the chances you have of getting lucky. You should also make the most of your USP. Our Panama hotel is the only luxury hotel located directly on the oceanfront in Panama City and you get unique, open views of the Gulf of Panama from the expansive pool deck. So we are going to enhance the food & beverage amenities and the furniture in this area. The same will happen to the hotel lobby and the four food & beverage outlets, with new concepts and fresh designs.
We want guests to return time and again. In addition to the amenities, and the quality of the guest rooms and the food, service is the key to this. By service, I mean consistent delivery of what the affluent traveller expects, with the right attitude and a smile.
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The ideal hotel investment will blend a solid foundation (the “constants”) with potential to improve its “variables”
A property’s reputation is shaped by years of service and consistent hard work. It takes a long time to build up, but can be lost quickly
A good leader will have natural talent and pick up skills – such as fairness and the power of persuasion – along the way. Stay focused and keep a clear mind when faced with a difficult situation
Service consists of many things – but the right attitude and a smile go a long way