When Tim Moore needed a break from the Maritime winter of 2003, he flew south for a few weeks’ respite. Lounging on the beach of one of the Caribbean’s oldest hotels, the Crane Resort in St. Philip, Barbados, Moore spied a swath of undeveloped property next door. “This country is perfect,” he mused. “It’s been a democracy for three centuries, its currency is pegged to the U.S. dollar, and look at that empty acreage adjacent to the hotel!”
By the end of April, Moore had purchased two lots and persuaded a dozen investors to buy into his idea: an extended-stay hotel comprising 40 suites, plus a restaurant, bar and pool. It’s the ideal residence, Moore figures, for foreign executives sent to Barbados to hammer out deals or get new companies off the ground.
Is Moore always so impetuous? After building the largest independent moving company in Canada— AMJ Campbell Van Lines — and assembling an array of other successful businesses and real estate investments, he rarely doubts his instincts. “I have this innate sense of growth,” he says. “Whatever I create, I’m going to grow.”
True to form, the multimillionaire resident of Chester, N.S. is growing his latest creation: Premiere Executive Suites. Launched in 1999, Premiere offers corporate housing through its Halifax headquarters plus branches in Moncton, Montreal, Toronto and Calgary. Its stock of 300 apartments is expected to grow by another 50 to 75 suites by year’s end, which would make Premiere an $8-million-a-year operation. Moore predicts that by 2008 the Premiere network will generate annual revenue of $40 million. That’s not hypergrowth, but it will turn heads in an industry that is stagnating — if not shrinking — and is populated by hundreds of mom-and-pop shops and a handful of U.S. giants that operate up to 22,000 suites, each.
Moore thinks he can beat the big guys by providing superior housing and better service than they do, but still at affordable prices. His edge over the small fry: one-stop-shopping convenience and a standardized, know-what-you’re-gonna-get product. Moreover, Moore believes he can maintain those standards as Premiere grows. How? By applying the same formula that generated so much success at AMJ: lock in sales by cementing “exclusive supplier” relationships with major corporations; promote entrepreneurship throughout the organization by giving local management a stake in the business; and ensure quality by hiring dedicated, happy people and by keeping them that way.
“There’s lots of competition out there, but you have to love competition,” says Moore. “And you have to love your employees to death.”
Moore, 58, has been spreading the love since 1971, when he dropped out of McGill University just short of earning a master’s degree in history. He noticed a friend making good money shuttling people’s belongings in the back of a small truck, so he bought a 1968 Ford pickup and started doing the same. Moore earned $10,000 that year, and incorporated T.C. Moore Moving the next. He owned six vehicles, all in his hometown, by 1977. That’s when he experienced the same kind of eureka that would hit him on a hot, sunny beach some three decades later.
An old, decrepit mover in Barrie, Ont. called M.J. Campbell had come up for sale for just $150,000. Moore saw a golden opportunity to buy up underperforming firms at good prices, and use his moving experience to build a national network of top performers. He bought M.J. Campbell, later adding an A to the name to get a forward listing in the Yellow Pages. By the end of 1979, AMJ had branches in Edmonton, Toronto, Ottawa and Montreal.
“I never had a vision of growing something huge,” says Moore. “But if you do one thing well, and stay financially sound, you should move to more and more offices.” But he never bought or started a branch unless he’d found a highly qualified person to run it; someone who had demonstrated, beyond a reasonable doubt, that they possessed intelligence, a good work ethic and a willingness to win. In every case, that person was a family member, long-time friend or moving veteran with a stellar track record. At the same time, each local operator was required to take a significant equity stake in their branch, corresponding with Moore’s belief that ownership breeds entrepreneurship.
Moore started franchising in 1982 and, over the next decade, instituted numerous policies and tactics that helped AMJ grow. To promote the perception that AMJ offered the best service around, he dressed his movers in uniforms and neckties. He signed long-term contracts with major corporations that made AMJ their exclusive mover in exchange for a small discount. Staff received spot bonuses for word of a job well done. And 10% of corporate profits were bonused back to franchisees and local partners every year. “We did this with AMJ,” says Moore, “and are now doing it at Premiere.”
Moore’s approach engendered devotees among not only clients, but staff and franchisees. “AMJ was more of a brotherhood than anything, with Tim always bringing out the good things in us,” says Michael Warnick, a long-time AMJ operator in southwestern Ontario. “He allowed us to flex our entrepreneurial muscles, yet he also allowed us to make mistakes. He was always there to help us pick up the pieces if we failed, but he also let us bask in the glory of our successes. That’s what made AMJ so strong.”
Tim Moore was creating a “culture” at AMJ, a word not used much in business a quarter-century ago. But, like any great leader, he put the needs of the organization ahead of friendships with his followers. “When it came to integrity, when it came to service, I was relentless,” says Moore, who quickly disciplined slipshod operators. When one franchisee failed to improve his service levels, Moore cancelled his franchise; when two of his brothers-in-law couldn’t make a go of one branch, he found their replacements.
By the time Moore sold 70% of AMJ to Mississauga, Ont.-based CamVec Corp. in late 1988, AMJ had 35 branches and system-wide sales of $60 million. In 1991 Moore retired to his seaside mansion in Chester, N.S., but came back a couple years later as AMJ’s president and CEO following CamVec’s unprofitable acquisition of Kord Products Ltd., a U.S.-based container manufacturer. (CamVec sold Kord in late 1999.) In the year ended March 31, 1999, AMJ made an operating profit of $4.7 million on $53 million in sales, which excludes the $65 million in sales achieved by 30 franchisees. “Our closest competitor in Canada was selling $60 million below us,” Moore enthuses. But he retired again that year, unhappy with his frequent Halifax-Toronto commutes. It hasn’t been much of a retirement.
When Moore noticed a Halifax condo owned by his wife was sitting empty, he furnished it, placed an ad in the paper and promptly rented it for a year to a British oil exec. “So I bought another one, and it was quickly filled,” says Moore. “Before I knew it, I’d bought 27 condos in 1999.” Moore, a passionate player of the real estate game, believed he could make a nice buck on any appreciating value of the properties, whose carrying costs were amply covered by tenants. And he had no trouble finding occupants who typically, are businesspeople working or taking courses away from home for weeks or months at a time — an expensive ordeal if you’re staying in hotel. Executive apartments come much cheaper — say, $2,500 a month — because tenants are usually locked in for one-month minimums and have to settle for biweekly housekeeping. Yet the residences come fully loaded, with kitchens, one or two bedrooms, real desks, stereo systems and VCRs.
Moore didn’t go into the business blind, thanks to his 20-year acquaintance with Thom Vincent, a Toronto native who sold his own corporate-housing outfit in 1998 to Virginia-based Bridgestreet Corporate Housing Worldwide Inc., which operates more than 9,000 executive apartments. But Moore hadn’t guessed how much work it would take. “I realized after a month that I was in trouble,” says Moore. “The demands of furnishing and maintaining 28 units were unbelievable.” Another eureka hit: it was time for AMJ all over again.
“I needed to line up friends and old AMJ franchisees,” says Moore, “to start buying condos with me in other cities — to put their money and asses on the line.” His first target was Suzanne Bachur, a former AMJ employee with strong financial and social skills, and her husband, who together bought 15% of Moore’s new business for $185,000; Premiere now operates nearly 200 suites in Halifax. Next was former Olympian Diane Jones-Konihowski and her husband. They quickly partnered with Moore on the Calgary branch of Premiere, mortgaging eight riverside condos at some $200,000 each. Today they own or lease 52 units and are profitable even as, says Moore, “we’re paying down those mortgages dramatically.” With the exception of the Moncton operation, which is a franchise, all of Premiere’s branches are distinct joint ventures between Moore and a local operator.
“There’s a little boy in Tim,” says Jones-Konihowski. “His eyes light up when he sees an opportunity, as he did in corporate apartments. He loves making money and he loves to help friends become wealthy, so he looks around and seeks other men and women to make his dream grow.”
The description is sweet — and by several accounts true — but there’s a compelling business case for sharing the riches. AMJ demonstrated the value of corporate exclusivity deals that bind client to supplier. Firms with widespread, long-term lodging needs would rather deal with a single provider, so they’ll favor a company with apartments in multiple cities. With the capital injections of local shareholders and franchisees, Premiere can become a multi-branched operator more quickly.
Moore and his partners also split operating duties. Moore devotes the bulk of his time to expanding the network and to the critical task of signing corporate deals, which now account for up to 35% of sales in some branches. “It’s one of the things I do best,” he says, “because my strength is relationships.” One recent deal will see Royal LePage’s 9,000 agents referring relocating homebuyers to Premiere.
Moore leaves local operations, from accounting and purchasing to hiring cleaning staff and concierges, to his vested partners. “You can do things from the centre,” notes Moore, “but it can sap people’s entrepreneurialism.”
That’s the worst thing to do in corporate housing. “It’s a guest-services business,” says Vincent, who now runs a corporate-housing consultancy in Toronto. As Moore discovered early on, corporate housing tenants demand as much a hotel guests: staff must be friendly and responsive; repairs must be made within hours; housekeepers must leave rooms spotless — even if they have two weeks’ mess to clean up. “The business is suited to the entrepreneur, because the devil is in the details,” says Vincent. “The entrepreneur is a guy who pays attention to detail, has a fire in his belly and understands what the customer needs.”
But Moore’s not the only player with a “be big, act small” strategy. Last year, Bridgestreet started a global licensing program that gives independent operators who meet certain product and service standards the right to operate under Bridgestreet’s recognized banner and to access centralized marketing programs, online training facilities and an international reservation system.
Moore faces other challenges. When Premiere launched in 1999, the U.S. corporate-housing market was growing by double digits. Since then, companies have been shedding apartments in response to declining demand. (Inventory is highly liquid because 70% of all units are held by short-term leases.) According to the U.S.-based Corporate Housing Providers Association, U.S. inventory dropped by 12% in 2001 and 7% in 2002, leaving roughly 70,000 executive-stay units south of the border. No one tracks the industry in Canada, but Vincent guesses at least 10,000 corporate apartments dot the country, and he’s certain there’s a glut in Vancouver, Toronto and Montreal: “It’s a market-share game right now.”
Moore craves the contest: “A true entrepreneur takes business away from someone else in a very professional manner.” Premiere has the advantage of its multi-city network, which is about to grow into Edmonton and Ottawa. Bridgestreet is the only player with a significant multi-city presence in Canada, and it’s not likely to expand. Vincent says U.S. firms see Canada as a small opportunity made less inviting by our traditionally longer lease periods, which reduce liquidity.
Clearly, Moore is more concerned with adding inventory than cutting it. In fact, Premiere is now building from the ground up. In Moncton, for instance, Premiere is erecting a 24-unit apartment complex at a cost of $3 million. Starting from scratch, says Moore, allows you to customize units to the needs of the business traveler and concentrates inventory, reducing travel between apartments by housekeepers and the like. Moore is also diversifying, converting historic inns and B&Bs into extended-stay hotels that appeal to upper-crust travelers, and is planning a new brand that will offer fewer amenities at prices friendly to lower budgets.
But most important to Moore is great service — and that’s where all the love comes in. In AMJ’s early years, Moore bonded with front-line movers by regularly working on the trucks. He doesn’t clean apartments these days, but he does meet with each of his Halifax employees every month. In September, they cruised Halifax Harbour in a 36-foot sailboat. Other offices hold monthly events, such as pot-luck lunches or ski trips. The partners meet several times a year to discuss the business, and once a year all senior managers and salespeople attend a national three-day convention where they bond and talk shop. “The day you stop reinforcing is the day people stop believing,” says Moore. “There’s always this danger that, as you grow bigger, you’ll lose that caring nature. But we try to create a family environment.”
Culture-building is made a little easier by recruiting the right people in the first place. As at AMJ, Moore partners only with people he’s been able to evaluate over time. More AMJ and ex-AMJ people are on his radar, and he’s examining potential partnerships with some proven hoteliers. Moore believes that if his senior people have the right stuff, they’ll attract and retain people of the same cloth.
Is all of it enough to help Moore strike it rich again? Moore’s opinion is unequivocal. “Nobody knows about the corporate apartments industry, but they will soon,” he booms. “Not only will people across Canada know this industry, but they’ll know our name.”
© 2003 Allan Gould