By the late 1990s, Robert O. Sanders Jr.’s successes in the hospitality industry included planning and managing high-profile events, like the Daytime Emmys, and working at one of New York City’s largest hotels. His career game changer, however, turned out to be a charity fundraiser at the Rye Town Hilton (now the Hilton Westchester).
It was 1998, and the American Red Cross hired Sanders to plan its annual “Touch of Red” fundraising gala. It marked Sanders’ first big event as an entrepreneur, and the positive response and ensuing referrals ended up sparking the growth of the company that is today Hospitality Resource Group, Inc. (HRG) in White Plains.
Currently celebrating its 19th anniversary, with 16 employees inWestchester and Manhattan, and three divisions under its wing (Event Solutions, which manages and produces corporate and nonprofit events; Strategic Training Solutions (STS), which offers training, organizational development, and HR consulting; and Allegis Communications, a marketing and branding firm), HRG’s evolution is a classic story of organic growth and word-of-mouth advertising.
“Referrals are like gold to us, and we mine that gold every day,” says Sanders, who now serves as HRG’s chairman. “Eighty-five percent of our business comes from referrals. That’s a huge number, and that’s something we take very seriously.” He notes that clients often serve as HRG’s most ardent cheerleaders, recommending the company at board meetings, client meetings, and other events where someone needs a service that HRG provides.
A Storybook Journey
Like many successful companies, HRG’s roots are typical start-up/bootstrap material. “I started HRG back in 1997, in my garage,” says Sanders, who grew up in Chappaqua and now resides in Mahopac. “It’s a classic story. I had a two-car garage, and I literally built a wall and a door and had an office. The journey began at that point.”
Before that journey, were experiences that put Sanders on the path to entrepreneurship. After graduating from the University of South Carolina in 1984 with a degree in hotel/restaurant management, Sanders got a job with Marriott, where he worked in a variety of cities en route to becoming director of catering sales for the Marriott Marquis in Midtown Manhattan in 1993.
In 1995, after years of working 100-hour weeks to put together “huge events for thousands of people,” Sanders, then a married father to two small children, decided it was time to spend more time with his family. He left Marriott and took a job at wedding- and event-catering firm Abigail Kirsch at Tappan Hill in Tarrytown.
It was there Sanders learned about the nuances of being an entrepreneur and running a small business. Three years into his tenure, Sanders wrote up a business plan, and, with $100,000 he’d saved, launched HRG. In its first year—while still focused only on the Event Solutions division—the fledgling company nearly made back its initial capital investment.
Today, the corporate events managed by Event Solutions run the gamut, from nuts-and-bolts-type meetings to conferences and outings. In the nonprofit sector, HRG is involved in all of the logistics for fundraising galas and event outings for clients such as Guiding Eyes for the Blind and the Boys & Girls Club. Event Solutions’ client roster is 60 percent corporate, 40 percent nonprofit. For the past seven years, HRG has also managed the meetings-and-events division of Manhattan-based Ovation Travel Group, which holds 250 meetings a year. HRG has six employees working on that account alone.
Naturally, when managing live events, preparation is crucial. “When it comes to events, we’re making things happen on the fly. It can be difficult because you don’t have control of the environment. We always have a Plan C,” notes Sanders, adding that this aspect is a competitive advantage for HRG. “A lot of companies in our space don’t have a Plan C or often even a Plan B,” he says.
HRG’s CEO, Michael Lattari, says management technology is key for both corporate and nonprofit events, with online registration sites becoming “almost mandatory.” However, using online-based technology to do things like check in for a meeting can have its drawbacks.
“The growing rise of technology can make things more convenient, but some of it takes away the people-to-people interaction,” says Lattari. “Certainly, there’s an age factor: The younger generation is more apt to use the technology than some of the more senior folks, so you have to adapt to different ways of using it and determine if it’s appropriate for that particular audience.”
HRG invests about $25,000 a year to use software from online events-management platform Cvent, which includes offerings like event websites, online check-ins, and even management of special dietary requirements of event attendees.
“Eighty-five percent of our business comes from referrals. That’s a huge number, and that’s something we take very seriously.” —Robert O. Sanders Jr., founder and chairman, HRG
Going In New Directions
By 1999, once the events side of the business was established, a fortuitous meeting propelled the company to expand in a new direction. Sanders gave a sales presentation at Doral Arrowwood’s hotel-and-conference center in Rye Brook that was so successful, it led to subsequent sales presentations and corporate training, culminating with the formation of Strategic Training Solutions. According to Lattari, STS’ team-building exercises are not “off the shelf” but tailored to a company’s or nonprofit’s specific needs and goals.
“We customize everything we do based on the group and what they are looking to do,” says Lattari. “It can be something classroom-based, or it can be a scavenger hunt, or cooking; any activity that is done in a group where you can analyze how everyone’s personalities work together.”
As more and more clients started asking for help spreading the word about their events, the company began to offer public-relations and marketing services, ultimately resulting in HRG’s third division, Allegis Communications, which was formed in 2004. This last expansion was a natural progression, since, Sanders says, his company was continually hiring other companies to do the PR, marketing, branding, and website design for the events it was managing. “We were just talking one day,” he says, “and decided to start a division under the HRG brand that captures all that business and makes us a one-stop shop.” In 2003, HRG eclipsed the million-dollar mark in annual revenue. Today, the company is valued at almost triple that, with Event Solutions accounting for roughly 61 percent of company earnings, compared with STS’ 28 percent and Allegis’ 11 percent.
Getting Through Tough Times
Though Sanders estimates the company has experienced a steady growth of about 6 to 10 percent each year, there have been lean periods along the way.
The aftermath of the 9/11 terrorist attacks and the stock market crash of 2008 were some of the worst times to be in the events business—but neither was enough to crush HRG. The business stayed afloat through both tragedies, with Sanders able to retain his entire staff.
“After 9/11, all the training we had on the books was cancelled,” Sanders recalls. “People were afraid to fly, and they weren’t sure if they should have a black-tie gala while this was going on in the country. They didn’t want to send the wrong message.”
As for the stock market crash, “It was a big deal for us,” says Sanders, who estimates HRG lost $100,000 in revenue during that time. “A very different scenario than 9/11, but all corporate spending was being scrutinized, and companies started cutting back, especially on the training side.”
Interestingly, it was the strength of the nonprofit business that allowed HRG to weather those economic storms, and Sanders says the lost revenue was gained back within six to eight months. “Even in uncertain times, nonprofits still have to do fundraising events,” he explains.
Now, with more than 200 clients around the country and the world—including places like France and Belgium—HRG is looking at various digital initiatives it considers key to its continued success, including making its website more interactive and interfacing for clients, starting a blog, working on search-engine optimization and expanding its presence on social media.
While Sanders is proud of his company’s evolution, he wants to keep HRG a small business with a commitment to excellence and personal, strategic partnerships with clients. “Over the last 19 years, we’ve had exponential growth,” he says. “We are constantly growing, but it’s controlled growth, because we want to keep the company small and boutique. We have a great team, and we have fun.”
Five tips from Robert O. Sanders Jr. on how companies and nonprofits can get the most from their events:
• You do not need a huge budget, but you need a direct purpose. “That is the biggest thing I give guidance on. Organizations should have a desired outcome in mind and should ask themselves: If we do this, what benefit do we get as a company? Do we get exposure? Do we get clients?”
• Engage the team. “Identify the key stakeholders in the company who can help determine how to get things done with limited resources. Look at who your superstars are within the company; a lot of the time, people want to get involved if they are asked.”
• Find sponsors and donors to help cut costs. For nonprofits, securing sponsorships to underwrite the costs associated with the event—such as food or music—can be the key to a successful fundraiser. “Often, people you deal with on a regular basis, whether it’s your bank or your insurance carrier, want to be involved; they’d be thrilled to put their name on your event.”
• Get the word out. It’s important to have a clear strategy on how to promote the event. Is it the Web? Social media? Direct mail? E-blasting? All of the above? “I recommend a written marketing plan for the event, but it must have focus and direction.”
• Follow up. Not scheduling post-event meetings with key clients, sponsors, and staff, can lead to missed opportunities for valuable feedback. “So many times people don’t follow up with the clients and ask, ‘Hey, what did you think? Should we do something else?’ There is no follow-up to bring it to the next level. So, you had the event, and it was fantastic, but what was the outcome?”
Freelance writer Mary Sue Iarocci is a former staff reporter for Westfair Communications and The Journal News.