The founder and owner of Provenance Hotels talks about new projects, Airbnb and the hotel as public space.
Gordon Sondland wins a lot and loses some. The founder and CEO of Provenance Hotels, Sondland, 58, oversees ownership of 14 boutique hotels around the country, including the Sentinel and Hotel Lucia in Portland. Tracking the industry, Provenance has experienced double-digit growth in the past few years. The 30-year-old company launched an investment fund in December and is undertaking a renovation of the historic Woodlark & Cornelius buildings in downtown PDX. Earlier this year, Sondland and a coalition of hotel owners settled with the Metro regional government in a case regarding the financing of the Oregon Convention Center Hyatt Hotel, which the group opposed.
In these edited excerpts, Sondland discusses current projects, the hotel as public space and why the Splendida in Portofino, Italy, is one of his favorite places to stay.
OB: So business is flourishing?
GS: At the end of the day, when people’s basic needs have been met, when they have a roof over their heads and whatever toys they want to own, they want to travel. Businesses have also found out that after trying technology — teleconferencing or Skyping or emailing — there is nothing like sitting down face to face with a customer and seeing the complete reaction to the dialogue and making the sale, making the pitch. That’s why hotels are full of corporate customers. People want the human touch.
OB: How is the human touch driving change in the hotel sector?
The desire to live a more communal existence started many years ago in home design. Homes used to have a separate dining room, a separate kitchen. Then the great room took hold, and now everyone is in the same space interacting. That has now devolved to hotels. The fact that people like the communal experience will change fundamentally the way buildings are designed and the way people will use hotels in the future.
OB: So hotels are turning into public spaces
GS: Hotels are becoming not just the social center of the city but also an intersection for people who want to meet, and the public areas are becoming more and more important. A certain percentage of the customers in a hotel will never sleep in a guest room, but they will live in the lobby, eat in the restaurant and meet friends from out of town.
OB: How do hotel design and programming facilitate these interactions?
GS: When you check into our property in New Orleans, the Old No. 77 Hotel and Chandlery, the barista and front desk clerk are the same. So they’ll bring you a cup of coffee. Or they’ll bring you a drink — depending on local liquor laws. When you walk into one of our hotels and see a person sitting on their laptop working, and they have a pastry and a cup of coffee, you don’t know if they’re a guest or someone who walked in for a pastry and a cup of coffee. That’s fine with us.
OB: What niche does Provenance fill in the hotel market?
GS: We like to create from scratch a story about a hotel: If a hotel were a human being, what would their name be, how would they dress, how old are they, with whom do they associate? Everything about that hotel — from the furniture, the colors used, to the door hanger on the door that says ‘do not disturb’ — is part of the story, and people immediately begin to identify with that hotel.
OB: What is the story behind the Sentinel?
GS: Sentinels stand guard; they see a long distance in front of them. If you look through the hotel and see the people represented in the corridors on the walls, the large gel-print photographs — they are people who have had a lot of foresight. The guests identify with those people; they are leaders in their businesses, their communities, in nonprofits, in their political spheres. We provide the amenities and spin a lot of stories about leadership relating to that hotel.
OB: The Woodlark is your latest Portland project
GS: We now control all four corners of the intersection [Southwest Park and Alder] where the Woodlark is located. We own the Westin across the street. We own the office building where the Mercantile retail shop is located, and we just bought the other corner for our new corporate offices. We’re relocating at the end of the year.
OB: You are building a hotel from scratch on Hermosa Beach
GS: The site is on the corner of two streets: one called Pier and the other called Strand. The edge of the building is on the sand; there is nothing between you and the Pacific Ocean. It is very, very difficult to build on the ocean in Southern California; there are a lot of regulatory hurdles. The community has been very receptive. The city governance wants it to happen. We’re halfway through the entitlement process, and when we’re done, we’ll start building.
OB: The Oregon Convention Center Hotel was another hurdle
GS: We think markets are very smart. When markets are ready for something, then debt and equity becomes available. When markets are distorted by governments that want to create something that shouldn’t be there until the market is ready for it, then you have industries that are competing with something that shouldn’t exist but for the government to whom those other industries pay taxes. So, effectively, you are using your own tax dollars to compete with yourself.
OB: You got a parking lot out of the settlement
GS: We wound up settling the lawsuit by accepting a piece of property in lieu of continuing the litigation.
OB: How are short-term rentals impacting the hotel sector?
GS: It’s a tectonic shift in our industry, but it will have a limit in terms of who is willing to check into someone’s home. They don’t want to take the risk of not knowing what to expect. They are somewhat risk averse or adventure adverse; they are on a tight time frame and don’t know what services are available, what the cleanliness level is. Short-term rentals are going to create another alternative lodging destination but are not going to replace hotels by any means.
OB: How do you hire?
GS: It’s a very seductive industry. You have to have a host mentality; it’s not the type of industry that attracts the “I don’t do windows.” Our employees tend to do everything. We empower them to make a lot of decisions on their own. Their job is to correct problems on the spot. It has financial ramifications, but at the end of the day, we win and the guest wins.
OB: You recently launched an investment fund
GS: It’s a big game changer. We get phone calls regularly from around the country for interesting projects. In any business, there is a mismatch between pipeline and funding. We’ve tried to equalize that problem by making sure we have plenty of capital, so if an interesting opportunity comes about, we can react to it quickly. Projects today don’t sit still. The fund is in the middle of four acquisitions, none of which have closed yet.
OB: Describe the competition
GS: We don’t have the formula for Coca-Cola. It’s not like what we do is top secret. Anyone can check into anyone else’s hotel and copy the design, the bed, the collateral on the nightstand. It’s not about that. It’s about continually raising the bar for the guest. When I think about traveling in Europe 30 to 35 years ago, no European hotel had a king-size bed. You were lucky to find a queen-size bed. Now people can’t imagine a bed that is half as wide as a queen bed — it’s so uncomfortable. The bar will continue to be raised.
OB: Your favorite hotel
GS: I stay in a hotel at least 180 to 200 nights a year. I love the Peninsula in Beverly Hills; I like the Ritz in Paris; I love the Splendido in Portofino. There’s ivy growing on all of the facades, and the rooms have very elegant molding. That building is probably at least 150 years old, but your Wi-Fi has five bars; you have the most modern technology whether you need a fax machine or to hook your iPad into the TV. The views of the Ligurian Sea don’t hurt either.
OB: How is the Portland hotel market evolving?
GS: The Portland market has fundamentally changed. Portland for many years was a sophisticated small town. But the mix of businesses, particularly businesses driven by creativity as opposed to manufacturing, have fundamentally changed who lives here, what services they want, what places they want to stay and have their colleagues stay, what kind of food they want to eat and how they want to be served. I think it’s a good change, and I think Portland over the next decade will become one of the most interesting sophisticated cities in the United States. I really believe that.