Q&A with Kirk Pederson Kokua Hospitality

In his current role with Kokua Hospitality, Kirk Pederson, president of the San Francisco-based hotel management company, oversees all corporate initiatives—focusing specifically on growth and owner relations. What’s clear: Kokua revolves its objectives around the goals of its owners. The company prides itself on crafting a unique service for each of them. 

Hotel Business caught up with Pederson to learn more about Kokua’s owner-centric approach, the management company’s portfolio and what hospitality students can do to better further their places in the industry. 

Why did you get into hospitality? What about it have you grown to love over the years? How did you overcome any initial pain points? While visiting Hawaii as a kid and observing genuine customer service, I asked my father, “How do I get that job?” I’ve grown to love the unpredictability of our industry. Good hoteliers need to be on the cutting edge of so many different trends (technology, branding and all creature comforts, including, food, beverage, housewares, gadgets, etc.). I worked through some of my initial pain points—like working night audit—by becoming the manager.

Kokua Hospitality uses what it calls an owner-centric approach. Define that. How does this approach differ from some of your competitors? Our management goals are geared toward achieving owner objectives. Every owner has a vision. We’ve experienced a wide range of owner expectations from three-month quick flips to developing a new brand from the ground up for global expansion. As a third-party manager, our job is deliver on whatever vision the owner has. We are completely transparent in everything we do and spend a lot of time fostering owner relationships.

You have more than 15 years in the industry. How have you seen it evolve over the years? Where are we now, and where do you foresee the industry as a whole heading? I feel like this question gets asked a lot, and there is no one right answer. By far, technology has and will continue to shape the future of the entire hospitality experience. Our consumers are changing because of technology. We will continue to adapt to the expectations of our consumers and it will become increasingly more difficult to “wow” them.

Describe the current Kokua Hospitality portfolio. We are not cookie-cutter, nor is our portfolio. Our properties range from city-center independent boutique hotels and a 29-room Napa retreat, to an emerging lifestyle brand, select-service hotels, and an entirely new shared workspace/hospitality brand. The portfolio consists of 13 properties (total of 2,589 rooms) across five states, with a concentration in Hawaii (three hotels) and on the West Coast (five hotels). We also have three properties in New York City, one in Houston, and another in Chicago. Within the last year, we added six properties to the portfolio.

What are the portfolio’s strengths? Our entrepreneurial approach and flexibility has allowed us to build a portfolio that’s incredibly diverse. Therefore, we don’t have a standardized service level that we drop into each of these varied properties; instead, we craft a service experience to best suit each hotel and its guests. That’s really the underlying strength of the portfolio.

What does the ideal Kokua property look like overall? We don’t look at deals with any preset “ideal” property in mind; we will consider partnership or JV structures for all kinds of properties. We know that to be successful as an operator, you need to adapt and flex with each owner, each brand and each property. We strongly believe that it doesn’t matter what sector you’re in—you can make money.

What’s Kokua’s strategy for selecting properties to add to its portfolio? We are a totally opportunistic operator. The size of the property doesn’t matter, nor does the location, as long as there is a real need for us to be there to help the owners meet their goals. If we are looking at a branded property, we look for a brand that’s honestly concerned about our performance, based on their performance. All brands have their strengths and weaknesses and it’s important a brand recognizes what these are. We also like a brand that cares about the numbers and wants to work together as a team to achieve the goals set forth. As for owners, we like owners that hire us for a reason—those who know we will put a lot of blood, sweat and tears into ensuring their property performs. There’s no playing the blame game; it’s key for owners to make this relationship a partnership.

What would you tell a student who is interested in hospitality and lodging? What are you looking for in associates? What can Kokua Hospitality offer its associates? A can-do attitude with a smile can take you a long way in this industry. Study the consumer and become an expert in data analytics. Genuine hospitality is impossible to train, so we look for people with the right attitude. Because of our size, we offer the opportunity for career growth and experience. We allow our managers to invest in deals where we have the opportunity to invest.

How does a management company compete in 2018? Do you believe the landscape is becoming a bit saturated? I don’t think the landscape is over-saturated. There are opportunities for all different kinds of management companies, and consolidation has created an opportunity for smaller management companies that tend to be more flexible and hands-on. Everyone has systems and procedures. It’s regional expertise that’s going to become more and more important.

What is in the pipeline in 2018 for Kokua Hospitality’s portfolio? Growth! We target a growth of about five hotels a year, at a minimum, and will continue to keep a diverse mix of full-service, select-service and extended-stay properties. We’re focused on continuing our expansion on the West Coast and in Hawaii, as well as making our move into Washington and Oregon. We will also continue our partnership as operating partner of the new Assemblage brand in New York City. We are opening two new properties with them this year. HB