The first job in the hospitality sector that John Cohlan, CEO of Margaritaville Holdings, ever had was as the CEO of Margaritaville Holdings. But Cohlan’s journey to the top spot of the Palm Beach, Fla.-based company prepared him for the role with plenty of training in history, law, branding and how to keep a dedicated audience coming back for more.
I've learned much from both of their styles
Cohlan studied American history at Princeton University, attended the London School of Economics, and then studied constitutional and corporate law at Georgetown Law Center. The three disciplines came together at Georgetown, he said, because a good law school teaches its students to focus on critical issues in complex material.
The education served him well at Triarc, a publicly traded holding company comprised of consumer businesses, where he was SVP of corporate finance. At the company, Cohlan learned about the power of brand identity, helping develop and maintain businesses like Arby's, Snapple and RC Cola.
While Triarc did not directly operate any of the brands it controlled, Cohlan said his time there gave him “a real understanding of what brands are about.” When Triarc briefly moved its operations to Florida in the 1990s, Cohan went along and met musician and businessman Jimmy Buffett and his wife, Jane, through a mutual friend. They developed a rapport, and when Buffett played the 1998 New Orleans Jazz & Heritage Festival, Cohlan went with him as a guest. “I looked out and I saw people all dressed up, and I said to myself, ‘This is more of a brand than the brands that we own,’ because it was a real cultural connection that all these people had to a way of life.”
Play all of our Hunches
At this point, there were three Margaritaville restaurants operating in Key West, Fla., and in Montego Bay and Negril, Jamaica. Universal Studios was building its Islands of Adventure theme park in Orlando and approached Buffett to license his name for a 20,000-square-foot Margaritaville restaurant by the main gate. “Jimmy, being very intuitive, did not want to license his name to Universal,” Cohlan said. Buffett called Cohlan and reminded him of the New Orleans concert, and invited him to oversee the branding and development of the Margaritaville name as a full hospitality business. Margaritaville Holdings was off and running, with Cohlan as its CEO. “I had that moment to go and do something entrepreneurial,” Cohlan recalled of his career shift. “And I did it.” The restaurant, funded with capital from Universal, opened in April 1999, and Margaritaville retail and dining outlets began opening across the Americas in the following years.
For the first 10 years of Margaritaville Holdings’ existence, the company’s hospitality side was focused on restaurants, even though Cohlan acknowledges how obvious the company's connection to hotels was from the start. Instead, the team focused on opportunistic growth. “We went into a lot of what I would call ‘brand extension’ before we really built the core hospitality brands,” he said. Once the brand had proven itself as a stable product, investors expressed interest in larger projects—including lodging.
Plowin’ straight ahead come what may
“We had the wind at our back, to a certain extent, because we built a brand without having gone to our sweet spot,” he said. Once the company was ready to expand into that sweet spot—hotels—it already had a good reputation among investors. “It's not like we were a new brand going into the lodging business,” he said. “We were new as a lodging brand, but we were already a brand that stood for what we stand for in the lodging business very clearly.” The Margaritaville Beach Hotel opened in June 2010 in Pensacola, Fla., on the site of a former Holiday Inn that had been destroyed by a hurricane six years earlier. Eight years later, Margaritaville Holdings has 10 hotels and resorts open, along with several vacation clubs and branded residences. Cohlan estimates a further 20 are in various stages of development, including the first Compass, the brand’s foray into the boutique select-service sector.
The transition from restaurants into lodging was not a particularly challenging one, said Cohlan, because the team already had experience in one side of the hospitality industry, and because the huge restaurants (often 20,000 square feet or more, he estimated) are so large that they can feel like destinations in their own right. “What most hoteliers will tell you is that is the most challenging part of managing any hotel is managing food and beverage, because that's really where the guest [interacts] most often with staff and employees,” Cohlan said, noting that the company now has more than 50 Margaritaville restaurants open worldwide. “We had to focus on the transition and pay attention, but it was organic and it's worked out great.”
The real secret to Margaritaville Holdings’ success in the lodging sector, Cohlan believes, is that the company’s overall corporate culture is fun, and a fun culture leads to a low turnover rate. “Our top senior executive management has an average tenure with us of 15 years,” he estimated. Beyond longevity, he added, happy employees lead to happy guests, which lead to strong brand loyalty. “When you're in a lodging destination or a restaurant and the people taking care of you are having fun, you are more likely to have fun,” he said.
Headquarters: Palm Beach, Fla. | Structure: Owns and operates | Portfolio: 10 hotels, two vacation clubs, one 55+ residential community | Website: www.margaritaville.com