Heart of America Group
Heart of America focuses on making its hotel and restaurant guests happy.
By Alan Dorich
When CEO Mike Whalen walks into Heart of America Group’s offices every day, it feels less like work and more like play. “My favorite toy growing up was my Lionel train set,” he recalls. “I would change it around and build little bridges.”
Heart of America builds full-service hotels or mixed-use developments, which is “like building a really cool toy, and you get to invite people to come and play with it,” he says. “When people come in say, ‘This is cool,’ that’s a very satisfying thing.”
Based in Moline, Ill., Heart of America has developed a portfolio of restaurants, hotels and commercial developments. “People characterize us as the all-American success story,” Whalen says, noting that he started the company 40 years ago.
At the time, he planned on a different career. “I graduated law school and decided I really couldn’t practice law,” he recalls, noting that he chose the restaurant industry over office work. Whalen opened up Heart of America’s first restaurant, The Machine Shed in Davenport, Iowa.
Whalen grew into hotels when he purchased and redeveloped a motel next door to The Machine Shed. Today, Heart of America has 35 hotels and restaurants in seven states, including Hilton, Marriott and Holiday Inn & Suites locations, as well as its own boutique brands, Hotel Renovo and Wildwood Lodge.
The company’s restaurant concepts still include The Machine Shed, along with Thunder Bay Grille, The J Bar, The Republic on Grand and Johnny’s Italian Steakhouse, which Heart of America has started franchising. “We have three [franchises] and another four that will open in the next 18 months,” Whalen says. “It’s definitely something that is a growing part of who we are.”
Heart of America’s experience as a franchisee gave it the right experience to be a franchisor, Whalen notes. “We’ve had a few decades to know what we like and what we don’t like as a franchisee,” he says.
The company strives to pick franchisees who want to be restaurateurs as well as hoteliers. “You’ve got to be just as passionate about operating a Johnny’s Italian Steakhouse [as] the hotel side, because it’s not an easy business,” Whalen says.
On Its Own
Heart of America sets itself apart with the way it develops its properties. The company has its own internal design and architecture teams, as well as a construction company that takes the projects from start to finish.
“We build things with the idea that we’re going to own and operate it forever,” Whalen says, noting that franchise companies have given Heart of America flexibility on the design of its properties. “They respect our ability to deliver a product that is very, very good.”
This helps the company align its properties with market tastes. Currently, Whalen says, millennials and affluent baby boomers are looking to stay at hotels that offer less of a cookie cutter environment and more exceptional experiences.
For example, “You have to have more of a health facility focus and you need to have more of a food and beverage focus,” he says. “Those things are more [attractive] to the millennial and baby boomer travelers.”
Heart of America is now underway on several projects. “We’re about to convert one of our franchise hotels into a Tapestry Collection by Hilton,” he says, noting that the company will bring a non-prototypical look to the location.
The company also is building a Hilton Garden Inn that will feature a Johnny’s restaurant, as well as the historical rehabilitation of an eight-story, art deco office building Moline. “We’re also looking at a historic rehab in Cedar Rapids, [Iowa],” Whalen says.
Heart of America’s slate also includes a new Fairfield Inn in Davenport. When picking projects, “We try to find something that excites us internally,” he says. “[We want] something to work on for the next two to three years.”
Heart of America also is experiencing customer changes on the food and beverage side. “The American consumer in terms of food is much more sophisticated when I started,” Whalen says.
This is particularly true for millennials, who have eaten out more than any other generation, he says. “When my kids were in their early 20s, they were talking about their favorite Persian restaurants in Dallas,” he recalls.
This has required the company to place an even greater emphasis on its food operations. “Decades ago, you could cook things a little rougher,” he says. “Today, the expectations are a little higher.”
Heart of America pays close attention to where it sources products from, the cooking methodologies and equipment it uses, and the people it hires. If restaurants do not concentrate on those things, “You’re probably not going to succeed,” Whalen declares.
Drive to Thrive
When hiring, Heart of America seeks out applicants with enthusiasm about the hospitality industry. “I look for people that are passionate about making people happy,” Whalen says.
“We’ll teach them all the things they need to know in terms of costing and all the tactics you have to have to run a good restaurant and hotel,” he continues. “It’s a passion business; they love it when somebody is really happy and it bothers them when someone isn’t.”
Since he started the company 40 years ago, Whalen has not lost his own entrepreneurial drive and passion. After vacationing in Florida, “I was excited about coming back to the office this morning,” he states. “We have not morphed into a boring bureaucracy, and as long as I’m alive, it won’t be.”
Moving forward, he say, Heart of America will be an increasingly national company that is still committed to the restaurant business. However, “Our major focus will be on unique to upper-middle full-service hotels,” he says.