John Q. Hammons (1919-2013): Master Hotel Developer and Builder
Have you taken notice that the hotel legend called "John Q." passed away at age 94? He's been on a unique and singular track for 87 years and, if you didn't know who he was, you've missed one of the great hotelier/developers of our time.
Of course, I'm referring to John Q. Hammons, who developed 185 hotel properties in 40 states. But the statistics hide the essence of Mr. Hammons' special development techniques. Hammons disdained the standard feasibility studies when assessing potential sites for hotel development. Instead, he relied on his own experience, knowledge and intuition.
Here are some reflections by John Q. Hammons on being an exceptional hotelier:
- Be in Tune with Change. Have a Plan of Action. "People do not stop to think what change means. That's the thing about success. You have to watch change in people, change in habits, change in style, change in desire, change in everything. It's happening every day, and nobody thinks about it. I do."
- Live by the Bedrock Rule. "They're not making any more land, so if you hang onto it long enough, you're bound to make a profit, either by selling it or by developing it."
- Commit to Quality and Location. "During the late '80s and early '90s when the banks closed, I told our regional managers, we are going to stay in the quality business. I said I've made up my mind that the day is coming that there will be so many budgets built that you won't believe it. The price of entry is low, and you don't have to be very smart to do 50 or 100 rooms. We're not going to travel there. We're going to get with the colleges, universities and state capitals. We're going to get into solid markets, and we're going to build quality hotels.
- Keep Your Word. "My reputation allows me to make deals no one else could make, certainly not on a handshake. I always live up to what I say I'll do… and more. If you don't do what you say, word of that will travel the country. I've never had that kind of reputation, and I never will."
- Give Back. "If you're able to succeed monetarily in life, you should share, and that's what I've done."
- Forge Ahead in Good Times or Bad. "No matter what the economy does, no matter the circumstances, forge ahead. I've weathered a lot of storms, but I stay positive. Experience has taught me that I will prevail, no matter what fate throws at me."
Taking a drive through Springfield, Mo. reveals the Hammons impact: there's John Q. Hammons Parkway and Hammons Field, home of the Springfield Cardinals, a Double A affiliate of the St. Louis Cardinals. In 2005, the 8000-seat Hammons Field was honored by Baseball Parks.com as the best park in professional baseball. In the mid-1980s, John Q saw that the downtown of Springfield was crumbling. "It looked like East Berlin around here," he said. Hammons developed his University Plaza Hotel and Convention Center and the 22-story Hammons Tower, Springfield's tallest building. On the campus of Southwest Missouri State University, John Q's name, or his wife Juanita's, will be on four buildings and a fountain near a new Hammons Sports arena. It's already on the Hammons House Dormitories, the Juanita K. Hammons Hall for the Performing Arts and the Hammons Enterprise Center.
Then there is the Hammons School of Architecture at Drury University, the Hammons Fountains at the Ozarks Technical Community College and the John Q. Hammons Library at the Missouri Sports Hall of Fame.
Hammons began his development career by building housing for World War II veterans in Springfield. When the city planning commission refused to approve a high-end shopping center, Hammons traveled to California where he saw Del Webb's Highway Houses: a pioneering motor hotel concept that followed Route 66. When Hammons returned home, he contacted a Memphis, Tenn. builder named Kemmons Wilson who was undertaking a similar concept named Holiday Inns. Hammons formed a partnership with a plumbing contractor named Roy E. Winegardner and in 1958 became one of Holiday Inn's first franchisees. During their partnership, they developed 67 Holiday Inns, about 10 percent of the system. This development coincided with the creation of the Interstate Highway System when President Dwight D. Eisenhower signed the Federal-Aid Highway Act of 1956: a 13-year plan that would cost $25 billion, funded 90 percent by the federal government.
While Hammons and Winegardner were successful partners, they didn't always see eye to eye on strategies or locations. They agreed to maintain the partnership but to also go their separate ways. In 1970 they sold 23 hotels for $60 million to Holiday Inns in exchange for Holiday Inn stock. That made them among the largest stockholders of the Holiday Inn Corporation.
Hammons described in his own words two defining moments of his life:
"In 1969, my entrepreneurial spirit eventually led me to start my own company, John Q. Hammons Hotels. Even though Holiday Inn helped me become a great success, I switched gears after seeing economy hotels popping up next to each other. We had to specialize, so we focused on the upscale market, primarily building Embassy Suites and Marriott hotels with convention centers. We decided to build quality hotels that exceeded customers' expectations. None of our hotels are alike and we use atriums, water features and local art to create individuality. We also strive to surpass the brand standards in each hotel, such as widening the hallways to seven feet and implementing pod check-in systems. If you build it right, locate it correctly and give the customers what they want, they will buy. The best way to sell is to let the other person buy."
"After 9/11 hotel development came to an abrupt halt. Companies were too fearful to move forward. While everyone was stagnant, we forged ahead. The advantage of continuing to build hotels was the availability of materials and labor. We knew the economy would rebound and people would begin traveling more. Our hotels needed to be ready to welcome them. We have built and opened 16 hotels since 9/11, and that decision was well worth it. Recently the cost of cements and steel ignited, increasing 25 percent. By developing hotels during an uncertain time, our company has saved US$80 million. No matter what the economy does, no matter the circumstances, forge ahead.
I have made it my life-long business to find markets and develop quality hotels. Since 1958, we have built 185 hotels from the ground up. Along the way we have never forgotten to give back to the cities that help us succeed. We also have learned that you have to be fearless to succeed.
I am humble, appreciative and thankful for the opportunity I have to live each day doing what I enjoy most. This is what I consider to be the defining moment of a lifetime."
Hammons' number one piece of advice was "you never build without the market…. Everyone says 'location, location, location.' But it's not true. It's market, market, market. What I do is go throughout (the country) and look for those nooks and crannies where industry has grabbed a spot and gone to work." Hammons never built in primary locations. He selected secondary and tertiary markets where large corporations had regional offices or factories as well as university towns and state capitals. When Hammons and his senior vice president Scott Tarwater boarded Hammons' private jet, they were looking for the confluence of interstate highways, transportation centers, universities and state capitals. They did not need to be right in the middle of the existing action: in fact, they preferred to be in a stable and underutilized location.
Listen to the Hammons strategy:
"After going through (numerous) recessions, I decided I'm going to universities and state capitals, and if I could find both, (for instance) Madison, Wisconsin or Lincoln, Nebraska, you've got a homerun. Because when recessions come on, people still go to school and government employees still get paid. After 9/11 all the big players who had big hotels at big airports and city centers took a huge blow. They were helpless. (Whereas) we were out here in universities and capital cities and strong farming/agriculture communities."
Hammons did not believe in formal, third-party feasibility studies. When he started his development work, Hammons would go into towns to do his own type of feasibility study. That meant talking to bellman, taxi drivers, all the regular people. He relied on his own judgment and the opinions of his top executives. Of course, his balance sheet was so strong that he often did not need mortgage financing. For example, when Hammons built the five-star Chateau on the Lake in Branson, Missouri, "the banks thought I was over the edge and gone. Put a hotel like that in Branson territory? You're out of your mind. So when we finished we had $60 million in cash in it and I couldn't get a loan. So I went ahead and opened. Four months later, I got a loan for $35 million. Just like that." Hammons provided the following analogy: "Mackinac Island has The Grand. Colorado Springs has the Broadmoor. I knew that Branson lake country would become something."
Was Hammons right? Just consider the following:
- 7 million people drive into Branson each year to attend the 50 theaters and live shows in town
- Forget Las Vegas and New York's theater district. Acre for acre, Branson is the live-entertainment center of the nation.
- Branson is a $1.7 billion tourist mecca, the number one motor coach destination of the decade.
- Located in the heart of the Ozark Mountains on the shores of Lake Taneycomo, Branson is a popular tourist destination, famous for its many live music theaters, clubs and other entertainment venues, as well as its historic downtown and surrounding natural beauty.
The Chateau on the Lake, a 5-star, 301 room hotel with a 46-foot, $85,000 tree in its atrium, is the best hotel in Branson by far. Its function space includes a 32,000-square-foot Great Hall, eight hi-tech breakout rooms, two corporate boardrooms and a 54-seat theater. The Chateau has a full-service marina with everything from jet skis to ski boats, scuba diving, fishing and other water sports. A luxurious $6 million, 14,000-square-foot Spa Chateau just opened in 2006. John Q. loved telling the story of when Walter Cronkite visited the hotel. He asked Cronkite what he thought of the property. "He told me, 'I can't believe this hotel; I've been all over the world and it ranks at the top.'"
Hammons inevitably built a better and bigger hotel than the community expected and than the franchise company required. He said, "I've always survived because I believe in quality. At that manager's conference where I told our people I intended to stay in the upscale, quality business, I told them I was going to put meeting space in our hotels. And that the meeting space will be big, like 10, 15 or even 40,000 square feet, because that's our insurance policy. I knew that the trends for big conventions like in Chicago, New York, Miami, San Francisco and Los Angeles, Seattle, etc., were going to be a thing of the past because you can't afford to get there. I knew. I could see that coming. That's why I wanted to go into a region where I could be in the dominant position. ….Keep your properties up and go upscale. Put that convention center there and you can still be in business having your meetings and things like that," Hammons said.
In preparation for the writing of my book, Great American Hoteliers: Pioneers of the Hotel Industry, I visited Springfield, Mo. and Branson, Mo. from July 11-13, 2006 to interview John Q. Hammons; Scott Tarwater, Senior Vice President; Steve Minton, Senior Vice President; Cheryl McGee, Corporate Director of Marketing; John Fulton, Vice President/Design; Stephen Marshall, Vice President & General Manager, Chateau on the Lake Resort, Branson, Missouri.