Acquired in 2010 by a joint venture between Thayer Lodging Group, a private equity firm, and Jin Jiang Hotels, a publicly-held Chinese hotel chain, Interstate Hotels & Resorts is opening a new chapter of growth inside the ever more global arena of hotel management. CFO Carrie McIntyre is determined to help drive results inside an enterprise that manages 440 hotels with nearly 80,000 rooms located around the world. ¤
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Driving Change: The Ah-Hah! Moment
The following is an unedited abstract from the CFO Thought Leader podcast featuring Carrie McIntyre, CFO of Interstate Hotels & Resorts, and Jack Sweeney, co-host of CFO Thought Leader.
MCINTYRE: Definitely. We were a public company until 2010 and at this point I was treasurer in the company and we were acquired by a joint venture that is owned 50% by a private equity company based in the United States, Thayer Lodging and 50% by a Chinese hotel company, Jin Jiang Hotels which is publicly traded on the Hong Kong exchange. So, there was obviously a lot of learning curve with what they were looking for and how to report to them. And at a certain point since they acquired us, we came to the realization probably midyear that what we were reporting to the Chinese company was something more of a cash-driven analysis and income and what they were interpreting it to be was more of a gap analysis.
And so we realized through the process of discussing the results that what we were saying was different than what they were interpreting that to be and so it gave us kind of midyear which was a point where you had time to affect change to get back in line with what they were looking for. It was a realization of what their mindset is and what their culture is and what’s important for their organization as it goes up their chain to where they’re traded. And so we had time at that point to stop and say, “Okay, how do we need to look at our business?
CFOTL: Can you share a story of a time in your finance journey when you had an ah-hah moment, a moment of strategic insight that may have led you to change an approach or drive change within the organization at large?
MCINTYRE: Definitely. We were a public company until 2010 and at this point I was treasurer in the company and we were acquired by a joint venture that is owned 50% by a private equity company based in the United States, Thayer Lodging and 50% by a Chinese hotel company, Jin Jiang Hotels which is publicly traded on the Hong Kong exchange. So, there was obviously a lot of learning curve with what they were looking for and how to report to them. And at a certain point since they acquired us, we came to the realization probably mid-year that what we were reporting to the Chinese company was something more of a cash-driven analysis and income and what they were interpreting it to be was more of a gap analysis.
And so we realized through the process of discussing the results that what we were saying was different than what they were interpreting that to be and so it gave us kind of mid-year which was a point where you had time to affect change to get back in line with what they were looking for. It was a realization of what their mindset is and what their culture is and what's important for their organization as it goes up their chain to where they're traded. And so we had time at that point to stop and say, "Okay, how do we need to look at our business? How do we need to look at opportunities that we see that we've been looking at for more of again a cash, maybe operating income-driven perspective and incorporate their perspective to make a decision that works for all party. And so that was an interesting moment I have to say but it all came out great and now we understand each other's perspective so that moves forward nicely.
CFOTL: In regards to becoming more global and how you're getting your finance team out into the geographies, is it done through an acquisition, suddenly you have three extra geographies and yes they have existing finance, executives already there, it's just a matter of bringing them onboard with your approaches and best practices?
MCINTYRE: It's a little of both. We've been in Russia for 15 to 20 years so we've kind of homegrown that branch. So, we have a branch office there and we've been there for a while so we've been able to cultivate and hire and breathe kind of that branch office from in country. The UK is another example where we acquired two companies in 2013. Both of those companies had finance executives that were the head finance person of that individual company. So, we've acquired some platforms but then as you grow and you transition, you enhance and change, et cetera, but you have something to start with. Then we have other countries that are kind of plugging in to those. So, we've got a couple hotels in Ireland and we've got a hotel in Hungary and a couple in Belgium that we've managed from those brands, from either Russia or the UK branch office. So, it's a little bit of a hybrid but once you're in the country and typically you start with expertise in there, then you obviously rely on them and utilize them to enhance what you've got.
CFOTL: Those executives, is it a dotted line to local management and back to you a straight line?
MCINTYRE: So they have a straight line from a finance organization perspective. I have an EVP of international finance hotels in the US and he oversees all of the branch office finance people and they have a dotted line to the operations in-country which that was what I was alluding to with the reorganization. We created this international finance executive person here because we realized that we needed somebody who was kind of that middle of the wheel that was understanding all of the disciplines here in the US and kind of our needs enabled to take those and efficiently communicated out to the branch offices and then going in the other direction too versus all of us kind of crossing over and hitting each individual person with individual requests. It became very inefficient we realized. This finance person is the core to all disciplines, as a central point to kind of challenge and communicate and drive what we need back and forth the most efficient way.
CFOTL: Our final question, what is the one thing that's really exciting you about finance and business right now?
MCINTYRE: There's a lot of capital out there right now. We're at a part of the cycle that there's money from the lending perspective and there's money from an equity perspective that wants to be put to use, so there's a lot of opportunities to grow the business and that's fun and exciting and allows you to think strategically and look forward and kind of put it together, so that's what's exciting to me.
CFOTL: Carrie McIntyre, thank you for being with us on CFO Thought Leader.
MCINTYRE: Thank you.
