Fountainhead, Ridgewood focus on shared opportunities

Hotel & Motel Management, May 1, 2000 by Patricia Alisau

BRASELTON, GA.--You might have to stretch the imagination a bit to imagine a wine chateau in the pastoral setting of North Georgia as the headquarters of an upcoming player in the hotel-acquisition business, but that's exactly what Fountainhead Development Corp. had in mind when it became a majority shareholder in Ridgewood Hotels.

Ridgewood, an Atlanta-based hotel-management company, sold 78 percent of its publicly traded shares to the resort builder in January to give it added muscle in acquiring, modernizing and managing hotels.

"Ridgewood was looking to merge with someone to bring hotels and equity to the table," said Wayne McAteer, Ridgewood's director of hotel management.

Fountainhead is a privately held company that owns golf courses and upper upscale properties, foremost of which is the Chateau Elan Winery & Resort in Braselton in northern Georgia, where the company is headquartered.

Ridgewood and Fountainhead are blending management teams to be able to better serve the market, said Henk Evers, the new president of Ridgewood. Evers previously worked for Marriott International for 17 years.

Evers, who served as general manager of the Chateau Elan, said he brings his expertise with upscale brands to the merger.

Ridgewood has been focusing strongly on mid-market brands, but will assume responsibility for all future Fountainhead hotels. Ridgewood took over the management of the Braselton resort in March. More properties carrying the Chateau Elan flag are in the development pipeline.

There is a newly opened Chateau Elan in Sebring, Fla., and additional resort hotels going up in California and Scotland. Fountainhead also owns and manages seven golf courses.

Ridgewood has 20 hotels in its portfolio, including Holiday Inn, Ramada and Best Western properties. McAteer, before joining the company, owned the Wesley Hotel Group, which merged with Ridgewood in 1995 to become its official hotel-management division.

"In a nutshell, our focus is on growth," Evers said. "Now it [Ridgewood] has access to financial markets it didn't before. Ridgewood now will be taking more equity stakes in the hotels. Before, we didn't have the capital or commitment."

McAteer outlined a four-pronged business growth plan. It includes expanding the Chateau Elan brand worldwide on a limited basis, he said. The properties will be conversions or built from the ground up and might include a spa and golf course.

The second division calls for acquiring properties that fly flags such as Marriott, Radisson and Hilton in primary markets through alliances with financial institutions and hotels, he said.

Another point is to increase third-party management for institutions and hotel owners with quality products like Holiday Inn. The limited-service properties gradually will be sold off, McAteer said. The last prong of the business plan concerns the golf courses and country clubs.

McAteer was reluctant to offer a projection of growth.

"We're looking at quality and not numbers because it's important for us to become profitable," he said. "We are going to be enhancing our portfolio over a period of time."

Evers said that by the end of the year, however, Ridgewood should have between $90 million and $100 million in managed sales. He also expects the company to be one of the top quality-hotel operators in the future, he said.

Peggy Berg, president of The Highland Group, a hotel consulting company based in Atlanta, said she believes the merger is a positive action for the companies.

"Ridgewood is a good management company and Fountainhead is very creative," she said. "The resort part of the industry is a good place to be right now because the population is big and wealthy and they want to treat themselves well. They will have to bring on some talent with new skills because it's going to be a larger company."

hmm@advanstar.com