September 21st, 2017 | By Mike Raven
In early August I flew up to meet with Bradley and interview him live at the Interstate Hotels & Resorts headquarters in Arlington, Virginia. I have known Bradley for the past 10 years and have worked directly with him on many occasions. He is confident, calm and funny, a pleasure to work with. Here is what we talked about.
Mike: How long have you been with Interstate Hotels & Resorts?
Bradley: Twenty-five years!
MR: Wow, really? That’s a long time!
BM: Believe it or not, it’s been my third management company. I’ve been around for a while. I worked for Lance McFaddin, who was the nightclub guru of the ‘80s and ‘90s, with probably no less than a dozen concepts. From there I went to my first hotel company, which was Ocean Properties. They had these very large nightclubs that anchored all their hotels, predominantly on the East Coast (Florida). They needed nightclub guys to run these things.
MR: That was a big outfit.
BM: They were, very much so. I was doing a nightclub for them up in Palm Beach and the VP of Food and Beverage for Interstate, Don Stanzcak, came through there. We got to talking and I was working for him three months later. They were just getting into the nightclub business and had six that were completed and another six in the works. When I joined them, they only had 12 hotels.
MR: What year was that?
BM: I met Don in ‘91 and went to work for him in ‘92.
MR: Only 12 hotels. Compared to how many now?
MR: Do you manage all of them?
BM: We do. We have two different companies – we have Interstate Hotels & Resorts and then we have a Select Service arm called Crossroads. Now they all have some kind of food and beverage component, and in most cases, do not have the expertise in the F&B field at the property level, so we are involved. A lot of times the brands influence the F&B in these hotels, so we try to stay in front and above of the brands requirements with our beverage program as well as our purchasing.
MR: You work with both arms of the company, right?
BM: I do. The full service gets the predominant attention, but you have to pay attention to the Selective Service. There are almost 300 of them.
MR: How do you keep track of everything?
BM: It’s, well, it’s incredible. You start talking about the beverage program and how we manage that and it will make your head spin. It’s a lot of work.
(Editor’s note – If you look up the Interstate properties on the Web, 130 show up under the Interstate Hotels & Resorts site and the others show up under the Crossroads website.)
MR: California, New York and Florida have the most hotels. That’s typical, but I was curious to see Minnesota and Pennsylvania in your top states and you have hotels all over the country.
BM: Pennsylvania, I think, has always been in the top five. We got our start in Pennsylvania before we came here to D.C. And about Minnesota – honestly, over the last year and a half or so, Minnesota has been hot. We have two new ownership groups that have big concentrations in the Minnesota area.
MR: The twin cities are on fire right now.
BM: The food scene up there is cool. I just got back, I was there two weeks ago and I’m going back in three weeks. You’ve got the Super Bowl coming there in February, and you’ve got the Final Four college basketball finals coming in March, both in the new stadium.
MR: It’s nice up there?
BM: I got to tell you, when I was there, it was beautiful weather – no humidity, blue skies, perfect!
MR: Are all the hotels managed, owned or both?
BM: Now, it’s truly managed. There was a time that we had owned properties, had joint ventures or a percentage. What happens is you get into a downturn economy and we ended up becoming a percentage owner, but we are now completely 100 percent managed.
MR: I was looking at your food promotions on the IHR side. How often and when do you decide to do those types of things? I saw some really nice ones.
BM: Thanks. I think it is what sets us apart from a lot of different management companies. We spend a lot of time looking at the menus, doing analysis and looking at trends. We update the menus twice a year and when we do this, we are updating the menus with these promotional items if they are successful. A perfect example would be the hamburger. We changed it about four years ago. We had the typical frozen, 8-ounce hockey puck. We switched to a fresh 6-ounce ground chuck with an 80/20 blend that just ate incredibly. We saved about $1.20 per plate. The hamburger is the number one selling item in our hotels. So, by changing the hamburger, we instantly brought $2 million to the bottom line.
MR: You’d think it would cost less having the frozen product.
BM: Well, it went from ground beef to ground chuck, so that’s less. It has a higher fat content, which enhances the flavor – that’s why it tastes so good. The trend was that people weren’t eating these gargantuan burgers anymore. They wanted a richer premium burger. It is fresh, with a 21-day shelf life, and because it was the number one selling item in our hotels, we weren’t worried about that. The biggest problem we had was keeping the cooks from squeezing the spatulas down on them because they were used to working with a frozen product. We had to put out training videos, literally, to show them not to squeeze all the juice out of it.
So the promotions are really to change the menus out, and what happens is, if successful, the items stick onto the menus and become core items. That’s why we do them every six months.
MR: When you roll these promotions out to the hotels, what kind of marketing materials do they receive? There must be a lot of work involved in laying out the graphics and design. Not to mention training.
BM: We are typically six months ahead of ourselves, because we have to be. The number one marketing item they would get would be new lunch and dinner menus. Whatever new item we’re putting on the menu, that item would be encapsulated in a box to draw attention to it. Then you have things like banners for the lobby, table tents for the guest rooms and bar area, stuffers for the key packets – we’ve done it all.
MR: I saw a street sign in front of the outside cafe here at the Hamilton Crown Plaza where I stayed last night, that said “The Mocktail Revolution Hits D.C.”
BM: We do everything we can do to get items in front of the guests, tastefully.
MR: This varies by flag, I would imagine?
BM: Yes. We are the number one franchiser of all the 40 U.S. brands (Marriott, Westin, etc.), so we know the brand standards and we are trying to set our programs above what the brand is asking us to do. We have great relationships with all of them. There are certain times where it’s give and take, but we are a very large company with a very large purchasing program, so we can offer product based on our buy for much less than other companies can offer. Therefore, we’re more profitable. That brings in the data and the analysis of the data. We really looked at that hamburger (chuckling) – that hamburger was a year in the making. And with this new promotion we are doing now, we have some incredible data behind it and I think it’s going to be a huge home run.
MR: Can you tell me what that is going to be? (Laughing)
BM: I can! We are going to launch it in December for a January implementation. Having gone through our menus, we found that less than 12 percent of our hotels offered a vegan or vegetarian offering. Vegan and vegetarian, plant based, is just blowing up. The Millennials are driving it and if we don’t have it in our hotels, not only do I lose your business, but I’ll also probably lose your associates you’re traveling with. In a few weeks, we are going to Cleveland to one of the biggest farms in the mid-west, the Chef’s Garden, and we’re taking fourteen chefs. We are going to work on vegan and vegetarian recipes and we’re hoping to come back with two of each. Right next to the farm is the Culinary Vegetable Institute that has a tremendous kitchen where we are going to cook and develop recipes for the hotels. We’re really excited.
When you have a veggie burger for $8.00 as a menu offering and you’re selling steak for $36.00 and chicken at $28.00, we are encouraging people to trade down who will pay anything to eat healthy on the road. So we need to come up with this upscale vegan fine-dining entrée, where you could maintain your price point with that customer, as opposed to only offering salads and such.
MR: Sounds great.
So the same thing goes for your beverage program, promotions, special holidays, and events. I’ve seen a couple of them, like flights with Kendall-Jackson wines. Is there anything coming up for the fall or holiday season you can share with us?
BM: We created unique fall menus that just hit the hotels last week so they are in time for the first pre-season football game. There were six different versions of footballs based on what type of hotel you are and what tier of the beverage program. I think we printed 3,200 of them. We also did the tees for them to sit on.
MR: When you’re talking about footballs – it’s an actual football?
BM: Oh yes. It’s that foam football sitting right there (in his office). So we put the menu on it and depending on what kind of hotel you are is what product you would carry. So one hotel may be Jack Daniel’s and one might be Jim Beam, and so on. They put them on the tables Saturday, Sunday and Monday.
MR: My first question is who’s throwing these things around? (Laughing) This thing feels nice, like a Nerf ball. I mean, you can chuck this thing!
BM: Who cares? My boss said to me, “Someone is going to steal them.” I say I’ll send them another 25! The point being, the very first thing you do when you sit down is pick it up. Everyone at the table wants to feel and look at it. Now I’ve put a menu in your hand, just like that! We’ve used helmets also; they work well, too.
MR: Who could resist it? It feels good; it’s a nice ball. The helmets are nice too.
BM: So we try to switch it around from year to year. We’ve done old leather ones, a couple of years back.
MR: Those look expensive.
BM: You know, everything is expensive these days. You just have to know how to shop for them, and we do. We’re also doing a fall promotion with Boston Beer’s Angry Orchard Cider featuring cider cocktails. That will hit the hotels about the second week of September.
MR: Do you do a lot of holiday themes or is that something you leave up to the properties?
BM: It depends. You want to do something during the holidays to help the catering department. We have to be really far out because bookings start in August and September for space. We’ve done punches during the recession when everyone was doing away with the open bar, so we were selling a lot of these alcoholic punches as a welcoming beverage as they came in. This year we’re doing Christmas cookies matched with a cordial.
MR: 2018 will be the next time you revamp the tier list?
BM: The new program starts June 1, 2018. We’ve already started on it. When I joined the company, we had 12 hotels and we had one tier. Today we have 430 hotels with eight beverage tiers. It’s all based on the hotels’ annualized outlet sales. What we learned from the recession is a lot of these asset managers and owners are now paying great attention to inventory levels. We’ve really looked at the amount of inventory that needs to be on a Courtyard shelf as opposed to a Marriott shelf, for example. People ask why we do it every two years. The honest answer is it’s a lot of work.
MR: I can imagine. You couldn’t do it every year or it would suck up all your time.
BM: By the time you look at the data from what you’re buying and selling, incorporating what’s trending, go through all the tastings, meetings with the partners – it takes awhile.
MR: What are some new key trends that you are looking to add to the program?
BM: The starting point is, you go back and look at the previous or current program, and you look at the tiers and you evaluate if there are any holes. Is there anything we missed? Two years ago we added a rosé by-the-glass and it was a huge home run.
MR: You mentioned sparkling wines might be a category to build on?
BM: When we look at national trends, then look at our program, a sparkling rosé was one thing we denoted could be a nice addition. Speaking of rosé wine, I have two rooftop bars that sell Frose (frozen rosé) in the typical New Orleans slushy machine if you will. One of them, Hotel Erwin, sits right at the foot of Venice beach. We do 600 glasses of Frose a week.
MR: How about craft beers?
BM: I think we’ve been pretty ahead of the curve when it comes to craft. We give the hotels their first draft handle to do something local. There are one or two changes in the beer category each time we redo the program.
MR: What is going on in your head about the spirits program for the 2018 plan?
BM: I want to be a little careful here – I’m not far enough down that path yet. And also, all my partner meetings are in January so I want to keep my cards a little close to my vest for the article. (Laughing)
MR: How about the cocktail program – thoughts on that? How are you trying to fit into the craft cocktail movement without limiting your movement? By that I mean, your movement behind the bar; they take so long to make.
BM: We hire a third party to do recipes for us but the key to our success is the amount of steps required to make the cocktails. We are not PDT in Manhattan! I was in Chicago this past weekend and had a horrible bar experience. They were trying to be too cute; it was overdone. Who want’s to wait 10 minutes for a cocktail?
BM: So, with that in mind, we try to keep it to three or four steps. We do a lot with ice, we do a lot with pre-batching and marinating, but the reality is keeping it to three or four steps. Granted, we have 430 hotels. There are hotels out there executing the most difficult drinks and doing it quickly and doing a wonderful job. But, for a Courtyard, that person who is making you a cocktail could have been the same person that checked you in. So you have to write the cocktail books for the tiers. Otherwise, we’d be just shooting ourselves in the foot. Either they can’t make them, or they would make them so poorly that we would never sell them.
MR: And now, trying to find bartenders is not the easiest thing either. It used to be that you would work years and years at your trade to perfect it and advance. Three or 4 months in the trade now and they’re moving up and around, looking for the best situation for themselves. It must be hard to keep the bar staff in place for very long these days.
BM: It is, so what we do is make cocktail recipe books that are on our internal company site. We roll it out to the management team via a webinar and distribute all of the materials needed to train their bar associates.
MR: What are some obstacles to changing the program?
BM: One thing you have to be careful of, when it comes to change in hotels, is that it takes awhile. You have to be mindful that they have inventory on the shelves. They don’t want to buy anything new until they sell the old. With companies as big as us, it’s like a super-tanker – making it turn takes a while. So the change is subtle; it can’t be dramatic. We help them with suggestions on how to burn off product that has been changed. When we add something like that rosé, it’s easy.
We know what we’re buying and we know what we’re selling. For the first time in 25 years, I have a really good number. We’re fed that daily. We hired a beverage analyst; we have our purchasing in Fintech as well as an Avero system that extracts the sales data and brings it all up to a cloud where we can analyze it. I can go in and see we sold x-amount of Heinekens last night, for example.
MR: In a nutshell, how does the selection process work for Interstate Hotels & Resorts?
BM: We start off with tastings. The team here in Arlington has a pretty good feel for what we need to do. We have partner meetings; we have solid partner relations after 50-odd years. It is a two-way street with the partnerships and I think given our compliancy numbers and everything we do, we are good partners. We’re very proud of our compliancy numbers. And they know the amount of money we spend on menus – menus sell. If it takes putting a crazy menu out like a football or a helmet or even a baseball bat, I mean we’ve done everything.
We struggle as an industry with bottle sales. Typically Sunday through Thursday, it’s the individual business traveller as guests, so it’s wines by the glass. That plays heavy on how the whole thing gets structured.
MR: You won a 2017 VIBE Vista award for responsible service. Can you tell us how you work with TipS on this and how important it is to be responsible these days?
BM: It’s incredibly important. It directly affects our liquor liability and insurance. To be able to keep those down means so much to ownership groups. About three years ago, we actually created an automated system where the hotels have to go on by the tenth of the month and report the number of servers or sellers of alcohol. We include sellers because in a lot of our Select Service hotels, we have kiosks behind the check-in area where they may sell beer or wine. If they don’t report in by the tenth of the month, it sends a note to the GM or HR Director to get their numbers put in. If that is late, it goes to the regional person to make sure they get their information in the system. We average about 95 percent of the hotels reporting each month. Our compliancy is about 85 percent, which is huge in the industry. Nobody can touch that.
MR: Are these report numbers people that are trained by TIPS?
BM: Yes, trained. What we do is track new servers and sellers; within 30 days of hire you have to be trained. If they are not trained and we don’t have a TIPS certification number for them, then we take them off the schedule. It’s a list in Interstate you do not want to be on. If your hotel did not report or you’re not at least 85 percent compliant, then we have issues. To answer your question, it’s a huge deal for our company and to be recognized by the industry was even better.