There are few areas of the economy where you will find more family businesses than real estate, where countless companies have been built up over decades by siblings and multiple generations.
Still, even in an industry that prides itself on being a family affair, theres something remarkable about Daly Seven, which over the past three decades has grown into one of the largest hotel operators in the Triangle.
Daly Seven was founded in 1981 by seven siblings of the Daly family five brothers and two sisters and all of them are still part of the business. The company, which now owns 37 hotels in North Carolina and Virginia, acquired its 10th property in the Triangle last week when it paid just over $9.5 million for a Hampton Inn & Suites at Capital Boulevard and Spring Forest Road in Raleigh.
Weve been very bullish about the Triangle for many years, notes Bob Daly, who runs the familys real estate and finance division out of his Raleigh office.
The very first hotel Daly Seven developed in 1983 was on Capital Boulevard, and today the company owns properties in Durham, Morrisville, Wake Forest and Raleigh.
The Dalys grew up in Danville, Va., and learned the hotel business from their father, Philip Daly.
In 1972, Philip Daly founded his own hotel brand, Innkeeper, which he and his children would spend the next 20 years developing. Daly Seven built up a portfolio of 24 Innkeeper properties by the mid-1990s, but by then the lodging industry was shifting to focus more on frequent travel programs and loyalty clubs.
Innkeeper didnt have the critical mass to compete with the larger chains, and so Daly Seven began selling off the hotels or changing them to different brands. (The company still owns five Innkeepers.)
We just were not able to get to a mass distribution, Bob Daly said of the brand.
Daly Seven has developed and constructed the majority of its hotels. Two brothers, Jon and Jim Daly, operate the companys construction business, which has offices in Lynchburg, Va., and Winston-Salem.
The power of 7
Indeed, Bob Daly says one of the keys to the companys long-term success has been that the siblings dont work side by side.
We have offices in other cities, and thats probably been one of the key elements of our success, said Daly, 53, who is the fifth-oldest. We have our own separate areas of expertise and responsibility.
Daly Sevens headquarters are in Danville, but the quality assurance division is based in Greensboro, and the interior design division is in Durham.
Like all hotel owners, Daly Seven was hurt by the recession, which caused a dramatic drop in both leisure and business travel and forced hotel owners to offer significant discounts. Bob Daly said the companys ability to survive the downturn was helped by the fact that it hadnt overextended itself during the boom years, passing on opportunities to develop or buy hotels in Florida, Texas and the Northeast.
Were fairly conservative in our growth strategies, Daly said. Its been more of a slow-growth pattern as opposed to trying to do an acquisition of 12 hotels at a time. We just have a different philosophy from that.
Adding to the business
After halting any expansion plans for about 18 months, Daly Seven has once again resumed its slow-growth pattern.
The company opened a Hampton Inn in Huntersville in March 2011 and another on Interstate 85 in Durham in early 2012. Daly Seven now has a hotel under construction in Lynchburg and plans to begin work on another near the Greensboro airport next year.
Bob Daly said that the hotel market, much like the economy as a whole, has been making incremental improvements since bottoming out in 2009.
Weve probably improved just about halfway back to where we were in 2007, he said.
The hotel occupancy rate in the Triangle over the first three months of this year was 58.4 percent, up half a percentage point compared with the same period last year, according to Smith Travel Research, a Tennessee company that tracks the lodging industry. Revenue per available room, a key industry statistic, was up 2.1 percent in the Triangle over that same period.
The slow pace of the recovery has, however, created acquisition opportunities such as the one Daly Seven closed on last week.
The real estate values are still a little bit down from the recession, so I think it is still an opportune time to acquire hotels as long as you can get the right brands in the right location, Bob Daly said.
As for the long term, Daly Seven is now busy grooming the next generation of leaders. The seven siblings have 29 children, five of whom are active in the business.
Its definitely a family business, Bob Daly said.