5 minutes with Justin Jabara at The Lodging Conference

PHOENIX – With his wife at home six months pregnant on their wedding anniversary, Justin Jabara was at The Lodging Conference in Phoenix a few weeks ago sure to send flowers back home. But his wife said save the flowers and preferred he send pizza, which he did! Such is the life of a hotel developer and the president of Meyer Jabara Hotels, who was tired and mostly happy when he sat down with Hotel Investment Today.

He said it’s turning out to be a pretty good year for the Danbury, Connecticut-based owner-opeator with 31 hotels. The management side of the business is growing, and development deals are still happening, including the company’s recent acquisition of the last piece of waterfront marina property in Baltimore as well as additional land in Florida. The Baltimore property will be developed at some point for mixed-use and Jabara said they are considering multi-family versus hospitality.

It [the Baltimore property] could be multifamily, it may be something else. It may be a hotel and self-storage. The traditional model – finding a piece of land and building a Hampton Inn – is very tough to do right now.

Justin Jabara

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He also said that given macro-economic conditions, the team has to be more creative with opportunities. “It [the Baltimore property] could be multifamily, it may be something else. It may be a hotel and self-storage. The traditional model – finding a piece of land and building a Hampton Inn – is very tough to do right now.”

Bigger picture, Jabara said the company plans to expand the platform and is therefore in the market to hire a chief development officer in the next 30 to 45 days.

Targets to drive growth will mix third-party contracts and acquisition opportunities, he said. “Ask me in six months and I could tell you something different, but that’s going to be where the opportunity is right now,” Jabara said. “It’s very hard to acquire, but with a very commoditized third-party space, we will pursue opportunities at the higher end of the management market… It’s just who we are, it’s the depth of our platform, the level of how we operate… We will be very selective in the opportunities that we pursue and the partners we work with because if you choose wrong it can cause a lot of headaches.”

Diligent operator

Jabara said he has less trepidation about the state of business than he did a year ago, but what is he keeping an eye on is the slower-than-expected pickup in business travel, especially as he begins to budget for 2024. “We really don’t have a good barometer for the post-COVID environment with corporate business travel. So, I think the next couple months are going to be a real good barometer as to where we ended up as an industry,” he said.

He also lamented the increased costs across the board, especially with insurance. “If you have to refinance, it’s a major issue right now,” he added. The good news for Meyer Jabara, though, he said, is that any loans within two years of coming due are already being worked on and the company’s philosophy has always called for lower leverage.

Meyer Jabara is also laser-focused on its existing portfolio with plans to completely reposition two assets. Jabara said hammers will swing in 30 days on one property and 60 days on the other with both moving more upmarket in the boutique segment.

The Menhaden, a managed boutique hotel recently renovated and located in Greenport, New York, on Long Island’s North Fork.

Otherwise, with rate and occupancy growth flattening out the company is working hard to reduce costs.

“We’re focusing on being diligent operators – controlling costs because even despite our best efforts costs are escalating,” he said. “Insurance costs are going up, and while utilities are starting to flatten out, they are still a huge concern.”

The company has responded to the energy challenge by initiating extensive conservation programs. “It’s a big line item and it starts with collecting data through our business intelligence team and understanding the best course of action,” Jabara said.

On the F&B side, simplified menus is among the answers to reduce labor, produce better products and cut down on waste.

At breakfast, for example, Meyer Jabara is considering eliminating buffets and moving to a simple a la carte offering. “We go look at the trash and find a lot of bacon at the end of the day. Some of that can be reused on the line, but the reality is some of it can’t. And that’s money out the door. So, by going a la carte, you reduce your waist substantially,” Jabara explained.

At the end of the day, Jabara concluded, “We have to find margin in the operation because I can’t get the insurance to go down.”

Perhaps more importantly and very astutely, Jabara said when he gets home the first thing he is going to do is book an anniversary vacation for himself and his wife.