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As the summer travel season begins, we talk with Christopher Bennett, general counsel for Interstate Hotels & Resorts, the Arlington, Va.-based hotel management company with locations around the globe.
What can you tell us about Interstate Hotels & Resorts? Interstate traces its roots back more than 30 years, but the company today is the product of rapid growth and multiple mergers in the hotel industry over the past few years. I joined the company in 1998, and at that time we were a C corporation, owning and operating about 55 hotels. Later that year we merged with American General Hospitality and split into two separate publicly held companies — a hotel REIT [real estate investment trust] and an independent, third-party management company that were closely aligned in a unique paper clip arrangement, which means we had a common management team for both companies. In 2002 we merged the management company with Interstate Hotels Corporation and became Interstate Hotels & Resorts. Today we are the largest third-party independent hotel operator headquartered in the U.S., managing about 280 hotels. We operate the hotels on behalf of about 50 hotel owners under 32 different brands. We also have a corporate housing product, BridgeStreet, which is the second-largest brand with operations around the world. Our strategy is to diversify our core earnings stream from third-party management contracts to include more ownership, both wholly owned and in joint ventures. We now own two and have an equity investment in about 20 hotels, which we find beneficial for our relationships with the owners. In third-party management, when a hotel we manage is sold, it’s not unusual for a new owner to bring in his own management company. But if we also have an equity investment in a hotel we manage, we have more stability. The hotel industry is doing fantastic now, and there’s a high level of hotel turnover, and that leads to new opportunities for us. What kinds of legal issues does the company have? We’re a public company, so like so many others, we’re working hard to stay on top of the New York Stock Exchange regulations and to make sure we are compliant with the new rules that have been put in place over the last couple of years. We also operate hotels in Moscow and are gaining management opportunities in western Europe, so tackling international legal and tax issues has become a new challenge for us. In addition, we have some 28,000 employees, so understanding employment status and rights both domestically and overseas is a substantial part of our daily activities. What’s your background? I went to Virginia Tech, and I was close to graduating with an electrical engineering degree when I woke up one day and decided it was not the direction I wanted to go. Instead I earned accounting and finance degrees and went to work at Deloitte & Touche and earned my CPA. Then I went to law school at UVA, after which I moved to New York City as an associate of Thacher Proffitt & Wood and later at Donovan Leisure Newton & Irvine. I always wanted to have an impact on the company I worked for, and I ultimately wanted to be an in-house counsel, where I thought I could contribute the most. Although studying pre-law in college is useful, I wanted to understand financial statements and the implications of corporate strategy and the financial impact of the deals we were working on. The benefit of going into law, with accounting experience, was that I could be involved in virtually every aspect of the company. The challenge is constantly proving to yourself and your peers that you’re not a hindrance but a help to achieving their goals. When I joined the company, in 1998, I felt I could really make an impact because of the small size of the legal department relative to the size of the company — some $500 million in annual revenues. I knew that I would have an opportunity to touch all aspects of the company, and that certainly has proven to be the case. What’s the size of your legal department? We have two other attorneys besides me, but we are a substantial consumer of outside counsel due to the specialized nature of our business, where we may not need full-time expertise in house. One of our attorneys, James Crolle, handles all of our transactional work, hotel operations’ legal issues, and SEC work. Laura FitzRandolph, our other attorney, focuses on employment and labor law and oversees our employee relations group as a member of our human resources department. I now also oversee the human resources department at Interstate. In fact, I was promoted to executive vice president earlier this month with oversight of both the legal department and human resources. We have about 25 people in human resources, which I regard as another opportunity to make an impact from within the company. I like being involved in so many aspects of the company and helping it accomplish its goals and limit its risks. That’s what excites me about working in this environment where you have a genuine opportunity to make a difference. What outside counsel do you use? My focus is not just to lay out legal issues but to find business solutions that work. As a public company, and with hotels in 42 states and in Canada and Europe, we use outside attorneys with highly specialized areas of expertise to support our department. My general philosophy is that every firm has great attorneys, and my job is to find those attorneys who can help make our company better. I have been lucky to have great partners in Dick Borisoff and Larry Wee at Paul Weiss, who assist us with SEC, corporate governance, and M&A matters. From a real estate transaction standpoint, we use Bill Diamond of Decampo Diamond & Ash in New York. We also use Tim Hudak from Eckert Seamans in Pittsburgh. He was the general counsel prior to our merger with the Pittsburgh-based Interstate company. He is a great attorney, and when he moved to Eckert Seamans following our merger, I wanted to take advantage of his specialized expertise in the hospitality industry. And lastly, for employment we use Mike Lorenger at Hogan & Hartson. What are the biggest legal challenges you face? I think that as a public company, it’s really making sure we institute and are abiding by all the new regulations out there. We have great internal resources here, and the one thing that’s really hit me, in terms of SOX, is making sure we abide by it and the myriad specific regulations. The underlying theme is doing the right thing and making sure the right processes are in place. But occasionally, you can get so busy making sure every “SOX box” is checked, you forget to ask if there are more efficient ways to accomplish the same thing. What’s your day-to-day work like? With the two departments it’s a bit of a balancing act. It starts with an open-door arrangement I have with the senior executives, sitting down regularly with the CFO and the CEO, as well as being accessible to everyone at corporate headquarters and in the field. We just finished up our 10-K and proxy statement, for example, which took up a lot of our time and required a great deal of coordination between our internal accounting staff, auditors, investor relations, the CEO and CFO, and outside counsel. I also try to take time each day to work with associates in our groups to make sure I understand what they’re working on and where they’re headed. In human resources I have an opportunity to learn to manage a substantial group of talented people outside the practice of law. They provide a fresh perspective to our business and the legal aspects we must deal with. I try to spend a good portion of each day understanding where they’re headed and give them challenges that will help them grow professionally and personally. I also do a fair amount of transaction work; we always have a number of joint ventures in the works, involving new hotel management opportunities. What’s the chain of command? I report to the CEO. What’s the best part of the job? When I was outside counsel I would have the opportunity to work on a transaction and then do another one for another company, and I never got the opportunity to take the company to the next step. The benefit of being in house is that when the transaction is done, we can learn from it and take the company to the next level, and work with operations and sales and marketing to achieve our goals. From a human resources perspective, it’s the opportunity to have a positive impact on operations on a day-to-day basis. I also work on initiatives like diversity, with the personal benefit of really helping develop the human side of our business. Hotels are successful primarily because of their people, which for our company is our most valuable and important asset. I’m also interested in finding ways to maximize the ways people can benefit the company as a whole. With 32,000 employees, there are a lot of legal issues and risks, but by focusing on employees as individuals and embracing our diversity, we have been able to limit the number of employment issues that arise. It’s part of doing business in this company. Of all the hotels connected to Interstate, what’s your favorite? That’s tough because we manage many fantastic properties, but if I have to choose, I truly enjoy the Roosevelt Hotel in New York City. It’s a historic hotel at 45th and Madison. It’s a few blocks away from Rockefeller Center and not far from Times Square. It has one of the best hotel bars in the city! And what do you do in your spare time? I have four kids, ranging in age from 1 to 8, so I spend a lot of time at soccer and baseball games and playgrounds. Read any good books lately? Well, Good Night Moon is definitely one of them. It does take me awhile to get through a book. The last book I read was One Hundred Years of Solitude by Gabriel Garcia Marquez. I love that book.

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