Davonne Reaves Trailblazing the path to diverse hotel ownershipBy Oriana Lerner | January 19, 2023Share Davonne Reaves pays forward her early successes as a pioneering hotel investor to help people of color break into hospitality investment. Davonne Reaves takes her own advice. That’s the simplest way to sum up how she utilizes experience gained as an asset manager and consultant, both at established firms such as CHMWarnick and Horwath HTL and as founder/hospitality strategist at Atlanta-based The Vonne Group to pave her own fast-tracked path to hotel investment. In 2020, Reaves’ Epiq Collective, cofounded with former college roommate Jessica Myers, partnered with Cincinnati-based Nassau Investments to acquire the Home2Suites by Hilton El Reno near Oklahoma City, Oklahoma. That deal made Reaves and Myers two of the youngest (both were then 33) Black women to ever co-own a hotel with a major brand. Since then, Reaves has added two more hotels to her portfolio and has been tapped by global companies looking to build impactful programs to encourage women and people of color to pursue hotel ownership while scoring industry honors from the likes of the International Society of Hotel Consultants (ISHC). Here’s a look at the industry through her experience as an advisor, owner and educator through The Vonne Group, where she has educated thousands on the path to hotel ownership, focusing on the Black community.Hotel Investment Today (HIT): What were the biggest or most frustrating obstacles you faced on the path to hotel ownership? Davonne Reaves (DR): Mentally, it was shifting my mindset from nearly 15 years in the hospitality industry as an employee, consumer or advisor to an owner. I made excuses and dealt with self-doubt. On a personal level, my grandma’s passing catalyzed me to go for it [to honor her; Reaves also established a scholarship in her grandmother’s name for students majoring or minoring in hospitality] and close my first deal. On a practical level, I faced frustrations common to many aspiring first-time owners. I wasn’t an accredited investor, which prevented me from accessing some sources of capital. It was hard to find a platform on which to raise capital, and I didn’t have a portfolio. To help others overcome those obstacles, I launched a crowdfunding platform, Vesterr, as an additional marketing service for aspiring hoteliers to raise capital. In compliance with crowdfunding regulations, investors can use the platform to raise between $500,000 and $5 million. “I predict that within five to seven years we’ll see a significant growth in Black hotel ownership at the $10-15 million deal level and beyond as today’s first-time owners scale their portfolios.”Davonne ReavesShare this quoteHIT: At an institutional level, are major hotel brands’ campaigns for more diverse hotel ownership making real change? DR: Yes! They are absolutely making a difference across hospitality. Choice Hotels was my first sponsor and I owe them, as well as InterContinental Hotels Group (IHG) and Wyndham Hotels & Resorts, a shoutout. They’re going about making a difference the right way - reaching out to organizations and individuals and creating change everywhere from ownership to operations to procurement. Because of this and other factors, I predict that within five to seven years we’ll see significant growth in Black hotel ownership at the $10- to $15-million deal level and beyond as today’s first-time owners scale their portfolios. HIT: Will the rise in interest rates stall new ownership? DR: As the days grow longer and vacation season starts, many are anticipating a shift in interest rates. While a large or dramatic dip isn't expected, summer months tend to bring a subtle reduction when it comes to individual or business loans. Such cost savings could be an opportunity for households and companies alike to extend their financial portfolios in the coming months. The decline may not be noteworthy now, and experts won’t forecast this decisively, but it stands to reason that taking advantage of the favorable rates now will only add up in the long run. HIT: Did the lifestyle hotel movement survive the pandemic?DR: Yes, people will still pay for an experience. If an owner has a capital stack around or over the $10-$15-million-mark, soft brand, collection or branded lifestyle properties such as AC Hotels by Marriott, Moxy Hotels, Curio Collection by Hilton, The Unbound Collection by Hyatt and Caption by Hyatt are worthwhile, especially in some markets and locations. For some, that will be a first deal, but even for owners starting with the traditional sub-$5million branded economy or extended-stay it will probably be in reach by the third deal. HIT: You have three hotels. So, are you contemplating making that leap? DR: I’d prefer to stay in the extended-stay/select-service space. My current goal is to build/develop a Hyatt House.