Integral Hospitality President Bill Murray knew that downtown Birmingham was a prime place for a Hampton Inn & Suites hotel. He set out in the summer of 2005 to identify the best spot, but sites to build on were hard to find. Working with the local economic development agency and scouring Google Earth maps of the city, Murray ruled out spot after spot.
Then on the local Chamber of Commerce Big Trip to Nashville to study the successes of the Tennessee capital, Murray got a phone call that The Tutwiler Hotel was for sale. Murray had financials faxed over and and on behalf of a current client made the offer to buy the hotel within minutes with the intention to make it a Hampton Inn & Suites hotel after renovation.
Murray quickly realized that the hotel was a prime candidate for restoration and repositioning. The property was enjoying decent occupancy, but lagging well below what it should be doing in rate. Nothing a total renovation couldn’t fix. Sounds easy.
Murray and his team quickly set about performing the all important task of due diligence using a carefully prepared checklist. Working closely with the hotel team and a team of professionals, Integral identified all the challenges and developed solutions to overcome them.
Using a multi-pronged approach that included public relations, team building, interior design, architecture and construction, Integral developed a plan that added multiple amenities, reduced expenses, increased other income and positioned the hotel for a 50% increase in realized room rates. Crafting a business plan that told the story of how the hotel would be restored, repositioned, and rebranded, Integral took the story of the new Tutwiler to the capital markets.
Receiving seventeen term sheets told them that they struck a chord with the lending community. But that was really confirmed when the appraisal came back considerably higher than was expected. Over the six years that Integral managed the hotel until it was sold in May 2012, the value of the 149 room property increased from its original all-in after renovation cost of $12 million to over $18.5 million!
The Tutwiler is a key story in the revitalization of the Birmingham downtown, and Integral Hospitality is proud to be the driving force behind the story. Let the team at Integral identify a similar diamond in the rough for you, polish it carefully and deliver the success level you desire from your potential investment.
Category: Success Stories