The genesis of Toronto-based Skyline Hotels and Resorts took root in the dusty streets of Hebron’s Old City in Israel, where teenager Gil Blutrich hunted for merchandise in the glass-and-ceramics quarter to supply a terrarium business that financed his first bicycle.

Today, Blutrich presides as chairman of Skyline Hotels. Yet, despite Israel’s rep as a start-up nation, the 47-year-old is hesitant to credit, or blame, his native Ra’anana, or active duty in the Lebanon War, for the acumen that earned him the Ernst & Young Entrepreneur of the Year award in 2004. Blutrich is a practical man. “Business is about relationships,” he says. “It’s not important where you acquire your lessons…. It’s all about learning from mistakes and learning from experiences.”

Dig deeper, and you’ll discover   investment decisions that strike a balance between gutsy and deliberate. The numbers tell the story: Skyline Hotels and Resorts experienced eight-per-cent Rev-PAR growth in 2012 compared to 2011, revenue growth of 12 per cent and a productivity jump of 4.5 per cent, year over year, well above the industry average. RevPAR growth to date in 2013 is 3.5 per cent and company execs forecast this will reach four per cent by the end of the year. Furthermore, Skyline’s occupancy rate was 63.5 per cent in 2012 and is forecast to increase to 66 per cent for 2013.

Entrepreneurial bravado and methodical analysis — perhaps more than any other element — is what fuelled a young Blutrich to start a company in Tel Aviv (Mishorim Development Ltd.). It now generates approximately $115 million in revenues (of which 55 per cent is derived from hospitality while 45 per cent is from retail real estate).

The company’s growth began with a modest slate of executive condominiums in 1999 at Toronto’s 109 Front St. E. For a consummate opportunist like Blutrich, growth from there was imperative. “We purchased condos in downtown Toronto and started to transform them. Later, with that success, we started to dream about buildings that we had control over — with no limitations as far as lease duration was concerned. With executive suites, you’re limited. This was the vision then, to develop and control the real estate. We applied it to our first two hotels, the Cosmopolitan [61 hotel suites, 36 condo suites] and the Pantages [87 hotel suites, 49 condo suites]. They became our first all-suites hotels.”

Once Skyline became a player on the hotel scene in Toronto, Blutrich saw investment opportunity north of the city and a chance to link the financial district ambition with Georgian Bay recreation. Blutrich’s decision to purchase the Port McNicoll, Ont., waterfront and marina in 2005 for $8 million was not unanimously seen as visionary. Today, it looks like a stroke of genius. The development of the former industrial port led to splashy, yet complementary, acquisitions such as Horseshoe Resort ($37 million) in 2007 and Deerhurst Resort ($26 million) in 2011.

The Skyline secret, most evident over the past year, is the team’s ability to marry real-estate de-velopment with hospitality management. “Our business model is not to look at cash flow like a regular hotelier,” says Blutrich. “We look at real estate, too. We evaluate a property based on existing cash flow, how we can improve it through synergy with the company’s current portfolio and, of course, the upside of the real estate.”

This high-wire act is no one-man show, however. Skyline’s successful growth plan is also due to a savvy management team brought in during the last decade, from Michael Sneyd, CEO, to Vadim Shub, CFO. And, Kevin Toth, president and COO, brings the type of astute managerial talent ne-cessary for success. The former managing partner of Rockwater — a resort property company based in Alberta and British Columbia  — and former Fairmont Hotels & Resorts senior manager, defines Skyline’s success succinctly. “Since 2010, we have developed a service culture built around specific guiding values and principles. From the day-to-day management of our properties to social responsibility practices, we’re a focused company. And, Gil’s energy is the catalyst.”
Toth is particularly passionate when he talks about how employees have handled the company’s recent growth spurt. “When you introduce a new property to the mix it can take time to get everyone up to speed and create a culture where everyone is on the same page. But the buy-in we get is tremendous. We listen to our people, encourage feedback and constantly look for ways to improve and forge new partnerships,” he says.

These partnerships include the one Skyline enjoys with Texas-based Omni Hotels Corporation, which joined The King Edward Hotel’s ownership group (King Edward Realty Inc.) in July. It’s a group that also includes Skyline International Development Inc., Canadian businessman Alex Shnaider, the Serruya Realty Group and Dundee KE Limited Partnership. Omni Hotels & Resorts now manages the iconic hotel, but Skyline continues to play an important role as asset manager on behalf of the consortium.

Skyline’s 2011 acquisition of the landmark Cleveland Arcade complex, the ninth building to be listed on the U.S. National Register of Historic Places, sealed a partnership with another major hospitality player, the Hyatt Hotels Corporation. The Arcade’s 10-year-old, 293-room Hyatt Regency is still managed by Hyatt under an agreement with Skyline.

But, the company’s partnerships extend beyond business deals to community development and include the likes of Trees Ontario, Clean the World and Make-A-Wish Canada. “Corporate responsi-bility is a vital pillar of success for us. These organizations are our partners,” Toth says.
With a tidy portfolio that now includes the Port McNicoll development, Horseshoe Resort, Deer-hurst Resort, the Cosmopolitan Hotel, Pantages Hotel, Hyatt Regency Cleveland and Cleveland Arcade, the Skyline’s founder is modest about his company’s performance over the past 12 months. “It’s hard to look at one year. Long-term development is about small steps,” says Blutrich. “But if we look at our ratings on sites like TripAdvisor, and the general feedback, we see constant improvement, year in and year out. We did good deals, like in Cleveland, which have been very profitable, and this year we’ve spent considerable resources renovating and bringing properties up to par. Deerhurst had … become dated. We spent a lot of money upgrading 190 suites and gave the property a massive facelift. We’re moving the dial. It’s the same at Horseshoe where we’re 90-per-cent done renovations. In the main hotel, more than 100 rooms are new, and we added a state-of-the-art conference centre. We’ve also invested heavily in human resources over the last year.”

The investment in HR includes several new employee training and development programs. The ‘Lead the SkyLife’ program was launched to provide technical training and create a viable service culture across the organization. ‘Reach for the Sky’ is an employee-recognition program launched in 2012. The web-based tool is an outlet for rewards-based recognition. It’s clear the company’s innovation will continue. “I see improved services and new resorts,” says Blutrich. “We will spend more time developing new products like residential clubs, timeshares, membership clubs and other wrap-arounds to contribute to occupancy rates and cash flow; new real-estate opportunities, new blood to the resorts and new partners. And, we want the residential part of the business to contribute even more to the stability of the assets.”

But, the Skyline chairman is not content to end a conversation about his company without a nod to his team. “Skyline’s progress could never have been achieved without very devoted and enthusiastic associates and employees, and management that understand the vision,” he says.

photo by Margaret Mulligan


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