Why hasn’t someone created a hotel brand that pays homage to black culture? That is the question hotelier Damon Lawrence asked himself back in 2014 when he created Homage Hospitality in Oakland, California. (You can also read his thoughts on inclusion and the impact of the BLM movement here.)
It was July 2018 when Lawrence finally opened The Moor, his first four-room property in New Orleans and started to get his answer, as well as his proof of concept. The small property stood out with an emphasis on the culture of New Orleans and its relation to the multicultural heritage of the North African Moors in its design and architecture. The four suites had rustic elements of exposed brick and hardwood floors softened with Moroccan-patterned textiles.
The property sold out for the first five months inside three days of going live, and Lawrence believes if the property was larger it would have done the same thing as he had to turn so many people away. He said he had all the validation he needed to move forward and started planning a 94-room boutique hotel in Oakland, California, called Homage Oakland, which would open in summer 2020. He eventually fell out of that contract, which was fortuitous, as he would have grossly overpaid considering the current economic circumstances.
Last fall, an opportunity to sell The Moor presented itself, and Lawrence again fortuitously sold in December for a “really good price.” Have the stars been aligning?
With the onset of COVID-19, Lawrence has no hotels today, but he has a concept, new investment partners, potentially very good timing to develop at a discount, and a dream to create the brand long overdue in the marketplace. At the time of this interview in mid-September, he had his eyes on a property in a location not necessarily known for its inclusiveness, Napa Valley, California, again being patient to get the best price.
“These market conditions are the best opportunity for Homage to grow,” said Lawrence, who previously worked in management for Ritz-Carlton, IHG and Dusit International. “And if we can just be smart, creative, a little scrappy, and patient, we’ll be fine. I think we’re actually just blessed and in a really good position to not actually have anything out in the market right now. Early this year, I didn’t think that was the case. I was more so frustrated. But the culmination of not having anything in the market, also having a new awareness in the Black Lives Matter, now being in the psyche of the American public and to the forefront, has really created this perfect storm for us to rise as a brand in the midst of it. So, I’m pretty excited for what potentially could happen.”
Perfect timing
According to research firm Catalyst, in 2019 black people in the United States accounted for 13.4% of the population and an 8.9% share of buying power representing US$1.4 trillion – a 48.1% increase in buying power over the past 10 years. Mandela Research estimated that black people spent US$63 billion in travel in 2018. Yet there is no doubt black people still face some discrimination and few, if anyone, is catering to their tastes at hotels.
“The hospitality industry is just missing a very important component, which is diversity,” Lawrence said. “And when you’re creating space, if you don’t have people of all ethnicities, creeds, and sexual orientations at the table, who are you really creating the space for? I think that’s just kind of been my thought process throughout the creation of the Homage brand, but specifically to something that I know very well, which is black culture and black history. What does that mean to American culture and American history, and how can we pay homage to that?”
As for why a concept led by black culture has yet to happen, Lawrence calls it a microcosm of a larger societal problem and due to the fact that not enough people of color have the background required to develop hotel properties.
“There’s a whole learning curve. That’s why I don’t really fear anyone’s going to come behind me and do anything similar any time soon. It is a really challenging industry to crack through when you have a creative endeavor like this. And I think the industry just represents what we’ve seen in so many other industries, but this is a really good inflection point in time for us to start getting stuff done and show the world why it’s so important.”
Lawrence believes that the Homage brand is going to do well with all travelers. “If you take care of the most marginalized, you’ll take care of everyone. So, I’m really excited about what that’s going to look like in the future.”
But there are black leaders in the hotel community. Why hasn’t it happened sooner? Lawrence said his answer is a bit controversial, but he points to a generational gap. “Everyone is of the previous generation, and they did not necessarily have the same, almost, pride in who they are… There’s not that celebration… In talking to my mom, I think that’s just a generational thing.”
Capital challenge
Pride and determination, however, are not lacking for Lawrence. Along with his new business partner, Erik Murray of Oak Investment Funds in Oakland, a fund is being raised to further development. The goal is to reach US$60 million, but with market conditions as they are and having no product in the market, Lawrence said about US$30 million to US$40 million is more likely by Q1 2021 – mostly via family, friends and private offices as opposed to institutional capital. He added that raising equity capital, usually more challenging, has been easier than finding debt, and that getting past the presidential election should help loosen things up.
“Raising funds has been more challenging than I expected at this time. I think it’s going to pick up some steam in a little bit,” Lawrence said. “But what we’ve been excited about is the potential to snag up some deals at a discount. I think everybody’s kind of thinking the same way, and for us just being able to pounce and capitalize is going to be important… It’s been an interesting journey. More doors have opened up for us than ever before, and people relate to the brand now more than ever before.”
Lawrence said he would love to develop a portfolio of about 10 properties in three to five years.
“That’s really the aspiration, and in all different types of markets,” he said. “If we have to stay regional [focus on a Tesla charging distance away] in the beginning that could very well be a good thing for us leading into future expansion. California is the perfect state to do something regional because within the state I have just about everything you could ask for. If I wanted to do something in Tahoe, I could do something in Aspen and Vancouver. If I do something in LA, that translates to a whole bunch of different markets. With Napa I can go to Martha’s Vineyard.”
Looking ahead, Lawrence reinforces that Homage should be very active at the beginning of the year, looking at regional markets first and building out the brand from there. “We’re going to be making some really interesting hires in the next couple of months. There’s a ton of talent that exists out in the market right now that is looking for work. Previously, it would’ve been more of a challenge to build out a management team. So, I’m looking forward to, in the next 18 months, possibly having two properties that we have out to market and pursuing other opportunities.”