ESA goes “asset-right”

Since the launch of ESA 2.0, the company has passed a number of milestones – with Jonathan Halkyard replacing Gerry Lopez at the helm along the way. It has begun the sale of tranches of properties to its major franchise partners, as well as starting the construction of its first new-build franchise property.
 
At the NYU hotel investment conference this week, EVP/chief development officer Jim Alderman said the company would probably not go the full route to the asset light model adopted by the majority of the major hotel groups, but would look to be leaner: “Asset lighter, I think, may be appropriate because we are settling down a little bit, but what’s probably most important is just asset right.”
 
A spin off and sale of the company’s entire real estate portfolio has been considered and remains on the table – ESA’s real estate investment trust, ESH Hospitality, owns the majority of the company’s properties in the US. Last year Halkyard said: “I want our shareholders to know that we continue to evaluate the merits of alternatives to our current corporate structure.”
 
But for the moment it looks like the current strategy will continue – selling clusters of hotels to regional players who can benefit from operational savings, while building new properties in its core markets.