This hotel industry veteran combines franchise and management know-how with development expertise
"Opportunity" is a word Jim Abrahamson uses a lot when he’s describing his life in the hospitality industry. Given his career path—he started as a front-desk clerk at a small hotel in Minnesota and now is president and CEO of the largest third-party hotel management company in the U.S., if not the world—it’s clear those opportunities didn’t come without a lot of hard work.
Interstate Hotels & Resorts has 373 hotels comprising 69,850 rooms in its global portfolio (six of those are owned by the company) and is one of the few third-party management companies with a global presence. With an IPO in its future and expansion plans in the works, Interstate simply is unique among management companies, both in its footprint and in its scope. Abrahamson has the credentials—and the chops—to keep the company evolving.
At a glance
INTERSTATE HOTELS & RESORTS
Structure: Third-party hotel management, ownership. Wholly owned subsidiary of a joint venture between Thayer Lodging Group and Jin Jiang Hotels.
Portfolio: 373 hotels worldwide including 69,850 guestrooms as of 12/31/2012
He credits his rise up the ranks to his willingness to take on many different opportunities (there’s that word again). His career history ranges from hourly positions and GM roles at individual properties to upper-level management at many of today’s major brands. He’s been in operations, he’s been in development and financing and he’s been a franchisor during the early growth of today’s legacy hotel brands.
He said that taking those opportunities along the way often involved risk but he views that as part of the process.
“Your career path is not a straight line. When you hike on a path you take twists and turns. It’s the same with your career,” he said. “Look for chances to stretch and learn—they could be challenging and outside your comfort zone, but if you stick to your core principles you’ll always grow.”
A Job … And A Wife
One of Abrahamson’s career mantras is, “it’s 50 percent know-how and 50 percent know-who.” His first hotel job, at The Registry Hotel in Bloomington, Minn., was a way to pay tuition and rent that turned into much more. Gerald Chase, now president and COO of New Castle Hotels & Resorts, was front-office manager at the property and he constantly promoted the hotel industry to his new friend.
That first job led to openings in accounting, finance and more. “I picked up hours in housekeeping and in catering. I learned how to close the books. I had a great balance between operations and management,” he said.
And Abrahamson had Chase to thank for more than just introducing him to his career. “Gerry left The Registry and the new front-office manager ended up being the woman I would marry,” Abrahamson said. “Gerry introduced us. So not only did I get a great career, I also met my wife in this business.”
Abrahamson was promoted to GM of the Granada Royale in Bloomington when he was 26. It was the mid-1980s and hotel brands were launching and growing quickly. In 1984, Embassy Suites acquired the Granada Royale Hometels chain. He and his family moved around to Embassy Suites properties across theMidwest, settling for awhile in Indianapolis, where he opened the then-largest Embassy Suites. He subsequently moved on to a 375-room Holiday Inn, working for General Hotels Corp.
But settling down in Indianapolis wasn’t in the cards for the Abrahamsons. More opportunity was on the horizon, this time with Hilton Hotels Corp. He joined in 1988 as corporate VP of operations, based in Chicago. In his early 30s he was an SVP, running 15 hotels.
Growing With Brands
Abrahamson’s time with Hilton was a turning point in his career and in the lodging industry, which was in rapid growth mode. Abrahamson said he enjoyed learning at Hilton under the likes of then-president Carl Mottek and others whom he calls “legacy leaders in the company.”
He took over the company’s franchise division in 1994. Looking for a franchise growth vehicle, Hilton launched Hilton Garden Inn in 1996. Three years later, Hilton acquired the Promus Hotel Corp. adding the DoubleTree, Embassy Suites andHampton Inn brands. “From two brands and 200-some hotels, we had more than 1,400 hotels and all of a sudden Hilton was the juggernaut,” he said.
After 12 years at Hilton, Abrahamson joined Marcus Corp. as president of the company’s hotel division, which had 250 Budgetel-branded hotels. Abrahamson would lead the repositioning of those hotels into the Baymont Inn brand. Marcus grew the brand and sold it to La Quinta Corp. in 2004. The following year the Blackstone Group acquired La Quinta.
A venture that he called “a big risk, since I could have stayed on with a big company as a role player” turned into what he called “a great reward.”
Hyatt, IHG, Interstate
By this point Abrahamson had gained a reputation as a launch and franchise expert. Hyatt was exploring a public launch at the time and needed a competitive select-service franchise brand. They called Abrahamson.
Hyatt “bought AmeriSuites [in 2004, from Blackstone], later bought Summerfield Suites, and I did what I had done before,” he said. In 2007 Hyatt launched the Hyatt Place brand.
“Your career is a culmination of everything you’ve done before,” Abrahamson said. “Here I could apply all my areas of expertise.”
After “a busy five years” at Hyatt, Abrahamson got another call, this time from InterContinental Hotels Group. The company was mourning the loss of its charismatic IHG Americas president, Stevan Porter. “His passing was a true loss for our industry,” Abrahamson said.
With loss came opportunity, and Abrahamson moved to IHG in early 2009 to manage its Americas division. He said he would have stayed at IHG longer than his three-year tenure, but when the call came from Interstate Hotels & Resorts, he knew it was time for change again. He joined the third-party management company as president and COO in mid 2011, later taking over the CEO role.
“Interstate was the largest company of its kind. “It had huge scale and scope and I could apply everything I’ve learned.”
The opportunity to take a global CEO position appealed to Abrahamson, as did the company’s international footprint. Plus, it was geographically desirable. Abrahamson will become chairman of the American Hotel & Lodging Association in 2015. He said he’s excited to grow visibility for AH&LA and the U.S. Travel Association, where he currently serves as first vice chairman.
Today, Interstate is in constant growth mode. In the U.S., growth will come largely through consolidation, and he said the company is happy with its balance of managed and owned properties.
Interstate’s global growth is what really excites Abrahamson, especially projects unfolding in the U.K. “We’re actively working on acquisitions in the U.K. that will give us additional scale,” he said. “We’ll be the only pan-European, multi-discipline, multi-brand institutional player that can do branded and independent hotels, funded by pension funds and big private equity.”
In China, the company’s Interstate China Hotels & Resorts manages four hotels comprising 2,144 guestrooms, with a pipeline of six hotels. The company manages 10 hotels in India with more on the way, and Russia is quickly becoming a growth area for the company. “We have seven hotels open in Russia today and we’ll double that this year,” he said.
What’s next? Currently it’s Interstate’s IPO, which he calls “a strategy, not a goal.”
Why do the IPO? Abrahamson answered simply: “it’s the next opportunity.”