Thayer Lodging forms new venture fund

June 10, 2012

Annapolis-based hotel investment firm Thayer Lodging Group is teaming with venture capital company Quest Hospitality Ventures to invest in emerging technology companies in the travel, hospitality and tourism industry.

Thayer Ventures plans to make investments in the range of $750,000 to $1.5 million based on need, according to general partner Christopher Hemmeter.

“We love companies that have big visions and big ideas, with strong management teams and some sort of defendable intellectual property,” said Hemmeter, who along with Mark Farrell and Lucien Ruby, founded Quest in 2009. “We’re looking for companies that are solving real problems in very innovative ways. That’s fundamental to how we evaluate investment opportunities.”

The trio will manage the new venture in San Francisco with Jeff Jackson, the former chief financial officer of Sabre Holdings — the parent company of Travelocity. They will be advised from time to time by Thayer Lodging’s cadre of hospitality veterans, including Leland C. Pillsbury and Fred Malek, the former president of Marriott Hotels.

Hemmeter said Thayer Ventures will use the same investment strategy as Quest, which has a stake in eight hospitality start-ups, including District-based NewBrandAnalytics, a business intelligence firm that helps hotels, restaurants and retailers track customer feedback on social media.

“Much of what’s changing in travel is being led by consumers and the way they dream, plan, book and ultimately share their travel experience,” he said. “The revolution in mobile and social has really had an in­cred­ibly disruptive and dislocating effect on the entire travel and hospitality ecosystem.”

What distinguishes Thayer Ventures from other VC firms, Hemmeter says, is the breadth of experience and wealth of connections its managing partners and advisers can offer start-ups. He gives the example of Nor1, a software firm that manages hotel upgrades, which he and his partners introduced to Hyatt Hotels in 2009.

“We look to work with our companies and help them gain access to the market by making introductions, helping them develop partnerships and, frankly, helping them sell,” he said.

The founders of Quest have a long established relationship with Thayer Lodging, which, along with 75 other limited partners, seeded the San Francisco venture fund.

“The partnership was a logical pairing because both firms share similar visions,” Thayer Lodging managing director George Dabney said.

Thayer Lodging now has six investment funds in its portfolio. The company, founded in 1991, has invested in more than 100 hotels. One of its biggest acquisitions to date was the $307 million purchase of Interstate Hotels and Resorts, one of the largest hotel management firms in the country. Thayer Lodging, in joint venture with Shanghai Jin Jiang International Hotels, helped turn around the struggling firm.

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