WorldCity Business Magazine

Even the kitchen sink

by WC

A Miami Beach hotel supplier has evolved into one of the top global players in its field. A Dubai project is adding heft to that operation.

From drapes to dishes and chairs to chandeliers, Doug Parker’s company buys nearly everything that goes into a hotel. Everything, that is, except the actual construction material. They do the sheets, but not the Sheetrock.

The Parker Co. has been at it for nearly 40 years, supplying high-end hotels, sports arenas and other facilities around the world with carpets, artwork, mirrors and more. The private Miami Beach firm not only buys the products but also works out the logistics of delivery, which is how it got involved with Earl, an 800-pound grouper.

Several years ago, the Pittsburgh Zoo & PPG Aquarium was looking for a new place for the hefty fish to live. Atlantis, Paradise Island, in the Bahamas offered a home, said Steve Kaiser, vice president of marine science and engineering for Kerzner International, the resorts developers.

The challenge was getting the fish from Pittsburgh to the Bahamas “so it’s swimming and not fish and chips,” Kaiser said. For assistance the resort turned to Parker, which had handled all the furnishings at Atlantis. “They said, ‘We do furniture, how hard could it be to do fish?’” Kaiser recalled.

Parker Co. chartered a plane and rounded up a very large container to hold the grouper. Just as everything was set up, however, Hurricane Earl which eventually made landfall in Panama City, Fla., as a Category One storm came barreling toward the southeast coast of the United States.

The cargo made it safely to the Bahamas with one extra refueling stop to allow for the hurricane’s headwinds. “We ended up naming the fish Earl,” Kaiser said. And with a nod to Parker Co., one of the biggest players in hotel purchasing, he added, “On a get-it-done basis, theyre great.”

Reaching around the world

Parker Co. ranks among the most important independent purchasing companies in the industry, according to Hotel Business magazine. Its main U.S. competitors include Benjamin West, Carver & Associates, Higgins Purchasing Group, Neil Locke & Associates and Project Dynamics.

“They’re highly reputable and would be considered one of the top purchasing companies in the industry,” said Neil Locke, founder of the Chicago-based company bearing his name.

The test for companies at the top is finding suppliers. “What we’re facing now is high demand and limited supply,” Locke said. Indeed, sourcing is an issue for the Parker Co.

The Internet can be your best friend and worst enemy, said Parker President and CEO Doug Parker. People portray themselves as manufacturers when they’re operating out of a phone booth, he said.

“The challenge is making sure you’re buying from reputable companies,” Parker explained. In the past, it was easy to take a quick trip to North Carolina once a furniture and textile powerhouse to see the factories. But now suppliers are scattered around the globe. Still, Parker Co. insists on samples and its staff tries to visit the factories, no matter how far-flung.

“Today, at least half of the products we buy are made in China,” Parker said. Vietnam is becoming another big source of merchandise, as is India. The firm also tries to work with merchants in countries where their projects are located, but they must be financially stable vendors. The company has 4,000 vendors in its database, and Parker estimates 80 percent of the work goes to 20 percent of the companies.

Although customers like Atlantis admire Parker Co. for its ability to tackle tough jobs, the company has also established a formidable reputation for its ability to perform far beyond the sphere of its South Florida headquarters. In recent times, that reach has included Dubai.

Currently, the company is working on the Armani Hotel Dubai, one of a new string of hotels and resorts overseen by famed Italian fashion designer Giorgio Armani. The Armani Hotel will be part of the monumental Burj Dubai, which is expected to be the worlds tallest tower when finished in 2008. Various accounts put the $900 million structure at 160 stories. By comparison, the Sears Tower in Chicago is 110 stories, and New York’s Empire State Building is 102 stories.

“It’s going to be spectacular,” said Parker. “This could be the start of a great opportunity for us. Its going to be a very visible hotel.”

Not that the Florida firm needs visibility. The Parker Co. has been working in Dubai for nearly 12 years. It has repeatedly collaborated with Jumeirah International, a hotel company linked with Sheikh Mohammed bin Rashid Al Maktoum, now prime minister of the United Arab Emirates.

One Dubai hotel contract saw Parker Co. obtaining a fleet of Rolls Royces from the factory. The requirement? The vehicles leather interiors had to match the hotel’s color scheme.

Parker Co.’s foothold in Dubai puts it in an enviable position. In a recent report on the Middle East hotel market, HVS International, a global hospitality consulting firm, concluded that “the level of liquidity for and the appetite for investment in new developments are strong.”

That liquidity is driven by record oil revenues. “Dubai is now one of the leading destinations worldwide in terms of transient leisure and business demand,” the report noted.

Branches on the family tree

With 100 employees, spread among offices in Miami Beach, London, Amsterdam and Dubai, Parker Co. buys more than $400 million-worth of merchandise annually as it works for hotel owners and management companies on a flat-fee basis.

“In the old days, we took title to the merchandise and resold it,” Parker said. Now the company works strictly as an agent.

The firm’s relationship with the hospitality industry stretches back even before Leonard Parker, Doug’s father, started the company. Leonard Parker’s grandfather, Irving Greenfield, owned the Maxwell Co. in Miami, which offered design, purchasing and financing services to hotels, including properties in Cuba and Las Vegas. Leonard Parker worked for Maxwell for a while then decided to go off on his own. He is now retired.

“He still yells at us with encouragement,” Parker said, referring to his father. It’s still a family affair. Parker runs with company with his brothers Philip and Mitchell.

Parker is a private firm, but it had a brief moment as part of a public company. As Internet momentum was peaking in the late ‘90s, it was purchased for $12 million in stock. Behind the acquisition was a firm that planned to assemble a group of service companies to appeal to real estate investment trusts which, at the time, were snapping up hotels. The new company was designed to be a one-stop shop for all hotel needs.

The opportunity emerged just as Parker Co. was developing an in-house computerized re-order system for hotels. The project would need millions of dollars to bring it to fruition and Parker Co. figured that the new owner would provide the capital needed.

But the Parkers never cashed any of their shares and, once the market swooned, there was little demand for the clustered services offered by the public company. Parker Co. remained profitable and its board decided to take it private again. Doug Parker said he and his brothers spent two years working “to untangle a mess we had nothing to do with.” Parker Co. was officially reborn in late 2002.

“It was a roller coaster,” Parker said. “It was a great learning experience. Were very happy to be a private company again.”

It should be smooth sailing for the Parker Co. for the next stretch as the hotel sector zooms ahead. Just how healthy is the industry? “On a scale of 1 to 100, it’s 150,” according to competitor Locke.

“The construction pipeline has begun to accelerate,” said Patrick Ford, president of Lodging Econometrics, a Portsmouth, N.H.-based lodging real estate specialty firm. “That is because the economy and the hotel industry are doing so well.”

The firm tracks hotels under construction as well as projects scheduled to start in the next year or in the early planning stages. One criterion is that developers are actively pursuing the projects. There’s a two- to three-year lag time from the construction phase until hotels actually open.

Lodging Econometrics expects more than a thousand hotels with near 120,000 rooms—to open in 2007.

“We have only modest supply coming on line right now, but in the years ahead, we expect it to pick up,” Ford said. But Lodging Econometrics expects new hotel openings to top out in 2009 or 2010. “Thats how real estate cycles trend,” Ford said.

Beyond new buildings, theres also business in renovations. The industry expects to do about $6 billion in renovations this year, a high water mark. Half of Parkers work is refurbishment.

Guest rooms are getting higher-end electronics, better lighting, improved heating and ventilation systems and more stylized, designer-type bedding. Public areas have additional small meeting areas with wireless hookups sort of like Starbucks instead of vast open spaces, Ford said.

“There’s an accelerated interest in upgrades and renovations,” he added, noting that the trend cuts across all major brands. “It’s a far more competitive environment than its ever been.”

In addition to capitalizing on those demands, the Parker Co. is showing its deftness at working on new condo-hotels. The company is getting into design-oriented fixtures for kitchens as well.

“Our job for our client is to find the best product at the best price,” Parker said. And to find the right product that meets the design criteria.

The Parkers are skilled at turning a designe’s vision into reality while maintaining quality and staying within a budget, said Alejandro Aparicio, executive vice president of hospitality at Fortune International, the Miami-based real estate and development company.

For the past three years, he has worked with Parker on Le Meridien Sunny Isles Beach Resort and other projects. Fortune bid out the purchasing and opened the competition to candidates from all over the world.

“Service, responsiveness and quality-wise, the Parkers always came out ahead, Aparicio said. Theyre very professional. They have the right contacts all over the world.” WC