ATLANTA — When Raines acquired HP Hotels on March 14, the Mt. Pleasant, South Carolina-based fully-integrated hotel development, management and investment company more than doubled its portfolio from 22 hotels to 49.
In vetting the deal, Raines executives made sure it wouldn’t negatively impact the integrity of the company.
David Tart, managing partner of Raines, said in an interview with Hotel News Now at the 2023 Hunter Hotel Investment Conference that his company took its time mulling the cultural fit between the two companies before deciding it was a deal they wanted to go through with.
“The acquisition was the assumption and purchase of HP [Hotels] in the contracts, but it’s a lot more than that: It’s the people, it’s leadership,” he said. “We wouldn’t have pursued it if it wasn’t like-minded, if the visions weren’t the same.”
Another factor in the decision-making process was the timing of the deal. Tart said current difficulties in the development process made the option of acquiring hotels more enticing.
“Market cycles create different opportunities for growth,” Tart said. “Our organization develops hotels; we own hotels; we invest [in hotels]. With a market cycle like this when development deals are tough right now, this was the perfect opportunity to diversify in the growth of our management.”
Tart cited the geographic synergies between the two companies as another plus. Prior to the deal, Raines had properties in four states: North Carolina, South Carolina, Georgia and Florida.
The now joint portfolio extends the company’s footprint in the Southeast U.S., with Raines adding properties to states such as Alabama, Louisiana, Arkansas and Texas. This gives Raines the opportunity to consider making more moves in these locations, he said.
“The fact that our organization works in all aspects of the hotel cycle, we can look at development acquisition deals in those markets while expanding our management footprint,” he said.
The integration process between the two companies began immediately after the deal was finalized, but there’s currently no timeline on when the HP Hotels portfolio will be fully integrated into Raines, Tart said.
“The first thing we did was went to all our folks and talked about the acquisition and said, ‘Hey, we’re the Raines family now,’” he said. “It’s a thoughtful approach to our folks and bringing them all together.”
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