A Stanley Hotel History: Part Four

Turning The Stanley Hotel into a profitable business

This is the fourth installment in a series that examines the history of owners of The Stanley Hotel as the property approaches a transition of ownership in March 2024.

The Stanley Hotel, one of the landmarks in Estes Park, was built in 1909. (Dawn Wilson Photography).

In 1909, The Stanley Hotel was an opulent, modern hotel with amenities not found in other hotels of the time, especially in a remote mountain valley.

A photo of downtown Estes Park circa 1908, one year before The Stanley Hotel opened and five years after F.O. Stanley and his wife Flora arrived in Estes Park, as seen in the display case of The Stanley Hotel in Estes Park, Colo. (Dawn Wilson Photography)

Estes Park was a fledgling town, with only a few businesses and log cabins flanking dirt roads in the area that would eventually become downtown. The two roads into town – what are now U.S. Highways 34 and 36 – were rough at best, more comparable to what would today be described as primitive, four-wheel drive roads.

But that is how this mountain valley started its path to becoming one of the premier recreation destinations in the U.S.

The Stanley Hotel opened on June 22, 1909. At that time, it was the first hotel in the world to provide electricity throughout the building, a rarity even for the more established, high-end accommodations in places like New England, New York City, Chicago and New Orleans.

But for all its glory in design, appearance and accommodations, The Stanley Hotel struggled to make a profit. Under several owners, including the hotel’s builder and namesake, F.O. Stanley, the hotel cost more to run than it collected in revenue. Under the management of a couple of owners after Stanley, it fell into bankruptcy and dilapidated disrepair.

All of that changed when an envelope was opened in April 1996.

Inside that envelope was the bid John Cullen and his fellow partners at Grand Heritage Hotel Group submitted several months earlier. That bid in the third envelope opened during the bankruptcy auction wound up being the winning bid.

A hotel in Amsterdam

John Cullen spent the first few years of his life in Ohio.

When Cullen was five years old, his father, who was a business consultant, accepted a position in the Netherlands. The family, including John and his sister, mother and father, moved to the historic town of Laren, Holland.

This small, affluent town in the Amsterdam metropolitan district would become Cullen’s home for the next six months where he and his family lived in the historic Hotel Hamdorff.

While his mother would be away from home picking up his sister from kindergarten, the hotel’s engineering team would watch Cullen.

These few individuals would become some of the most unintentionally influential people in carving out the path Cullen would follow for his career. In their care, he would learn Dutch, play with the engineers and hold the tools they used.

“Mom and dad asked me a long time ago, ‘How did you find a business plan going into historic hotels?’” said Cullen during a recent interview. “Mom and dad, you were there!” Cullen enthusiastically remembered telling his parents, giving a big smile as he reflected on the subconscious path instilled in him by those few short months at that historic hotel in Europe.

Believing he would follow a path as an architect or engineer, Cullen pursued physics in college, but macroeconomics also fascinated him. He quickly fell into working in real estate after college, taking a role at a real estate consulting firm as a Lotus 1-2-3 software engineer. This new platform, launched in 1983, was considered the most powerful spreadsheet software available.

“I became the fastest problem solver in the room,” said Cullen. “I don’t think I was getting paid $10 an hour at the firm. I volunteered for every single travel assignment because I got a meal stipend. Literally, in my first year working for this firm, I had 200 plus days on the road in hotels, consulting on hotels and fixing hotels.”

Cullen was in his early 20s and confidently admits that even then he was good at running numbers to solve the problems of struggling hotels.

He was quickly recruited by a consulting firm in Annapolis. While there, he received a $40,000 bonus (equivalent to about $84,000 today), which he used to start his first hotel company.

That company is now Grand Heritage Hotel Group, the company that owns The Stanley Hotel.

The envelope that changed everything

In the summer of 1995, Cullen’s company managed The Stanley Hotel in an attempt to help turn it around.

Frank Normali with Kera Normali in The Stanley Hotel. Courtesy of Dawn Morali. 

The property was in severe disrepair as the owner, Frank Normali, struggled to make money on the historic hotel. Bad investments and neglect left Normali struggling to maintain the property. Three buildings had been condemned. The roof of the concert hall had a hole in it big enough to see the weather in the sky above. Eleven of the 14 buildings no longer had utilities supplied to them because they did not meet code.

Cullen, at 30 years old, had invested about $100,000 into the property to help get it back on the right path.

What he didn’t know was that the hotel was already in bankruptcy proceedings, and his investment in The Stanley Hotel would fall to the bottom of the priority list for repayment.

When a judge ordered the bankruptcy to be changed from a Chapter 11 protection to a Chapter 7 liquidation because of the significant debt owed by the owner of the hotel, a bidding process commenced for the hotel.

Because of his knowledge of the hotel, Cullen’s general counsel suggested he put in a bid to buy the property out of bankruptcy court.

“My general counsel comes in and tells me it is as simple as cake to put in a bid,” said Cullen. “First of all, the phrase is as easy as pie, but no, I wasn’t going to put in a bid. But he finally cajoled me to submit a bid, saying just put in a joke bid. I said fine and you have already heard my number. I decided that was my bid. I put in a $3.14 million bid because that is pi.”

Cullen said he never thought he and his six partners in Grand Heritage Hotel Group would win the bidding with such a low amount so, after a delay in the auction date, they proceeded to purchase another hotel in San Francisco from the Four Seasons.

Then March 1996 rolled around and the envelopes with the bids were opened.

“They open up the first bid; $10 million,” said Cullen. “Phew! I would get my $100,000 back.”

But the court rejected it because of a legal matter with the bidder.

A second bid from a California investor with a collection of boutique hotels was also disqualified because it was not an all-cash offer, a requirement of the bankruptcy court.

Then the third envelope was opened revealing the pi number.

“Not only do I not get my $100,000 back but I have to raise the other $3 million in 29 days,” said Cullen. “Before, when we were looking at buying it, we had partner money available. We had spent it on the Four Seasons Clift Hotel. That was our down payment on the Clift.

After borrowing $3 million from an L.A. law firm to pay for the hotel, the partners had to come up with another $500,000 of equity.

“My share [of the bid] was $57,000,” said Cullen. “I had $51,000 in checking. I put the last $6000 on my Visa card.”

Yes, the managing partner of the Grand Heritage Hotel Group was now the proud owner of the once lavish but now dilapidated historic hotel in Estes Park thanks to the swipe of a credit card machine.

Making a profit

In the state the hotel existed, tearing it down was a reasonable possibility. The Stanley Hotel and its adjoining buildings sat on 31 acres of prime Estes Park land, just a small portion of the original 160 acres when Stanley built the hotel 87 years earlier. Breaking up and selling the land may have been a more logical and obvious decision for a business.

But Cullen saw potential in the property and had a vision for its future success. He was, after all, good at fixing hotels.

When reflecting on his first night staying at the hotel, he said, “I asked the one female [on the wait staff] – her name was Mary Ann – why are you the only person when you come walking by me that doesn’t make a jingly chain-like noise? She goes, ‘I can’t tell you because the owner won’t let me.’ Well, I am the owner at noon tomorrow so why don’t you tell me. She said, ‘I am the only one that’s here that’s not on prison work release.’”

According to Cullen, the previous owner had been working with the state of Colorado to employ prison workers to staff the hotel. The sound he asked her about was their old-style ankle bracelets that used chains. These men saved Normali money on hiring staff while their employment helped the state by providing a halfway house for the men.

Cullen also reflected on other oddities that resulted from Normali’s financial struggles. The housekeeping staff used the bed linens as curtains at night, hung during evening turndown by hotel staff to block out light. A construction crew also discovered an old hot air balloon tether when building the Aspire Hotel and Spa, hastily covered when the safety of balloon rides in windy Estes Park proved a poor idea during Normali’s ownership.

In the first year that Cullen owned the hotel, it only made $1.4 million in revenue and lost nearly $500,000.

“We have turned a profit every year after that first year,” said Cullen. Cullen, who has owned The Stanley Hotel longer than any other titleholder, is also the first owner to put the hotel in the black.

Cullen credits not only his ability to fix hotels for the success of The Stanley Hotel but also the timing of when he purchased the hotel.

In 1996, the internet was in its infancy. It would become a powerful tool for Cullen to use and exploit for sharing information about the hotel.

And shortly before Cullen purchased the hotel, Denver opened its new international airport in Feb. 1995. Now the third busiest airport in the world, Denver International Airport and the growth along U.S. Interstate 25 make accessing Estes Park and its infamous hotel a piece of cake.

A Trail-Gazette file photo from 2011 shows Arden Curfman, left, sharing stories about his life and work at the Stanley Hotel 70 years ago with hotel owner John Cullen, right. Cullen was making a video historical museum at the Stanley. Juley Harvey 

A visit by Stephen King also gave Cullen a tale to tell about the hotel. After King’s 1974 stay at The Stanley Hotel, he was inspired to write “The Shining.” The book and subsequent movie and television series told a gripping horror story about a hotel caretaker and his family living at a haunted hotel during the off-season. The Overlook Hotel in the story is based on The Stanley Hotel.

And although Rocky Mountain National Park had been welcoming visitors since the early 20th century, it too gave the hotel a steady stream of customers.

But pie, and pi, is what started this story of success at the historic hotel.

“The secret to success is not being secret,” said Cullen.

Even though the history of the hotel is bookended by two visionaries – F.O. Stanley and John Cullen – it feels like the history of The Stanley Hotel is just getting started. Since 1996, Cullen has given the hotel its own Renaissance, but the story is far from finished.

In the next part of this six-part series, the details about what Cullen has done to make this property such a success will be reviewed. The final part will talk about the future of The Stanley Hotel. That final installment will also discuss the transfer of ownership to a nonprofit in 2024 and other plans Cullen has for the business that he feels so passionately as his company continues to manage the property for at least the next 25 years.

Read More:

A Stanley Hotel History: Part One

A Stanley Hotel History: Part Two

A Stanley Hotel History: Part Three