Randy Smith, Founder & Chairman of STR

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November 07, 2019
HU TIME CAPSULE
Fran Worrall

Randy Smith has enjoyed a long and distinguished career in the hospitality industry, starting out as a payroll clerk at United Inns and then working for the accounting firm of Laventhol & Horwath, eventually becoming director of research for the company’s hospitality division. 

In 1985, he co-founded Smith Travel Research, now STR, with his late wife Carolyn, with the goal of establishing a database of U.S. hotels and measuring industry-wide performance trends. Three years later, he launched the STAR program, a series of reports now considered the definitive source of data benchmarking for the hotel industry. Today, STR employs 350 people and provides market share analysis for hotels in 185 countries. Randy is a charter member of the International Society of Hospitality Consultants, a member and past co-chairman of the American Hotel & Lodging Association’s Industry Real Estate Financing Advisory Council, and past vice chairman of the American Hotel & Lodging Foundation Funding Committee. He has received numerous awards for his contributions to the hospitality industry, including the 2019 Vanguard Award for Lifetime Achievement in Revenue Management, which he accepted earlier this year at the HSMAI Revenue Optimization Conference in Minneapolis.

                          

Hospitality Upgrade recently sat down with Randy to talk about his career, get his perspective on hospitality’s future and discuss a few non-business topics.

HU: Where did you grow up?

RANDY: I was born and raised in Pocahontas, Ark., a small town in the northeast part of the state. We moved across the river to Memphis when I was in high school.

HU: What was your first job?

RANDY: I worked at a gas station during my senior year in high school. This was before self-service stations, so I pumped gas and checked oil and tire pressure. It taught me the value of hard work and actually led to my next job.

HU: How so?

RANDY: Every day, FBI guys would drive through the station. I’d talk with them and became interested in their work. So, after I graduated from high school, I took a job with the FBI in Washington, DC, analyzing fingerprints. After a brief stint at the FBI, I went to Florida State University and got a degree in finance.

HU: What came next?

RANDY: I worked for United Inns in Memphis, a major franchisee of Holiday Inns, which gave me a view into the issues facing hotels. I then took a job in the hospitality division of Laventhol & Horwath. They sent me to Orlando, which is where you started out back then if you were in the hotel business. They had a hotel survey, and I tackled occupancy and room rates in the Orlando area. I eventually became the director of research, tracking the performance of hotels around the country. I learned a lot about the hotel industry during my 10 years there.


HU: How did you come to start your own company?

RANDY: L&H transferred me from Orlando to their headquarters in Philadelphia. That’s when I started seeing the big picture. The company had offices around the country, and a lot of them were conducting surveys like the one I was doing in Orlando. But the information was very skewed — where there was a large office, there was more data — and no one was covering roadside hotels, which were a big part of the industry. My boss and I realized that if we could cover the entire country, tracking the performance of every kind of hotel, we could provide some very useful information. So, we submitted a memo to the executive office outlining our market share program, but they rejected the idea. They thought it would threaten their feasibility business, even though we showed them how it would complement it. About a year later, we tried again, and they rejected us again. A year later, we sent out a third memo about it, and that one got me called in. I was told to ‘knock it off.’ I quit my job about two weeks after that meeting. Coincidentally, my wife had quit her job, too, so we decided the time was right to launch our own business. I thought the best place to start was with a list of hotels. So, we bought two PCs and a printer and for the next year, we put in 14-hour days seven days a week developing our Census Database. Soon after, I met with executives at Holiday Inn who were interested in the market share program I had talked about at L&H. Long story short, I spent a week in Memphis with Holiday Inn, and by the time I left we had outlined what would become the STAR report. Within a few months, I signed Hilton and Sheraton and got the endorsement of the American Hotel Association. With that, we were off and running, surveying 5,000 to 6,000 hotels across the country. Now, more than 30 years later, we’re collecting data from 65,000 hotels on a daily, weekly and monthly basis.

HU: Any funny stories about starting the company??

RANDY: I borrowed $10,000 from my dad and $10,000 from my father-in-law to get started, and within six months, I was broke. So, I called my dad and told him I needed another $5,000. A couple of days later, he sent a check for $3,000. Somehow, I got through the next couple of months and turned things around. A year later, I told my parents and my in-laws that I’d repay their money or give them 10 percent of the company. They chose the money, which they probably regretted.

HU: What makes STR unique?

RANDY: Once we got past the initial few months, we were profitable. The industry really wanted us to succeed.

HU: What do you like most about your work at STR?

RANDY: Hands down, the people. I’ve had the great fortune of dealing with most of the industry movers and shakers, which has been a fascinating part of the job.

HU: What is the biggest problem hotels face?

RANDY: Turnover. It has always been a challenge, and it always will be.

HU: What is the ‘next big thing’ you see in the hospitality industry?

RANDY: We’re in the midst of it now. It has to do with what defines the hotel industry at this point. There are so many alternatives to traditional lodging and so many experiences people can have while traveling. Hotels have always been faced with competitive markets, and they will adjust over time. They will carve out their niches.

                                            

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