It’s an often-used phrase, but in an industry so heavily reliant on people working together, it’s true.
The hotel industry is about relationships.
That’s why Craig Smith, CEO of Aimbridge Hospitality, has made it one of his responsibilities to meet regularly with hotel owners who have hired Aimbridge to manage their properties.
“I have a group of 20 owners that I own, and my thing is, I’m going to see them in-person four times a year,” he said. “I told my team, no, Zoom doesn’t count. A call doesn’t count. In-person, because that’s where relationships and real honesty happens, face to face.”
In an interview focused on his first six months as Aimbridge’s new chief executive, Smith recalled times in his former role at Marriott International that he would tour hotels along with then-Marriott CEO Bill Marriott, who liked to speak directly with hotel staff to ask them questions about themselves, how their jobs were and what, if anything, they needed to better do their jobs.
“Because he knew that sometimes the answers were a little varnished by the time they got to his level,” Smith said.
The CEO represents the company, and it’s important to be accessible to employees, he said. It’s irritating if the corporate level of a hospitality company wasn’t hospitable, so Smith set out to make sure that wasn’t the case when he started at Aimbridge.
“First day, I said I expect everybody in the building to say hello to me, and if I don’t say hello to you or wave to you or acknowledge you as we walk past each other, I’ll buy you Five Guys,” he said, referring to the fast-food chain. “There’s a Five Guys two blocks away, so everybody’s been trying to get me.”
Smith later upped that challenge, telling employees that everyone should carry the card that talks about Aimbridge’s company values and culture. If someone catches him without the card, he owes them a burger and fries from Five Guys. Just as with the greeting, employees have been trying to catch him.
And one got him.
When speaking in Birmingham, England, at a company event that was televised to the company, a young executive asked Smith for the card, but he had left it in the briefcase in his room.
“Everybody laughed, and he said, ‘Oh, you owe me Five Guys,’ and he went on to talk about guest satisfaction scores,” Smith said.
Smith left the stage to ask the general manager if there was a Five Guys location there, and it turned out there was one at the local train station. A bellhop made the run to get the burger and fries.
“I went up and knelt in front of [the executive] and gave him this package of Five Guys burger and fries and everything else, and he got to eat it,” he said. “It hasn’t happened since.”
That’s why meeting people as CEO is important, Smith said.
“You set the culture. You set the tone. People like to laugh and joke with you, and the same thing happens with owners,” he said. “If I develop that relationship ahead of time, if we have problems, then you can talk through it. Calling them just when there’s a problem, that’s not a relationship.”
Making changes
Since starting as CEO six months ago, Smith has introduced several changes to Aimbridge. He restructured the company's leadership organization — flattening it, as he calls it — to have more leaders overseeing the hotel divisions answer directly to him, putting him closer to property-level teams.
The current leadership team is a mix of old and new talent at Aimbridge. Some have served in their roles for a while, some were promoted and others are new to the company. Among its new hires are Eric Jacobs as chief global growth officer and Christopher Tatum as president of full-service hotels.
There's also been a renewed focus on hotel general managers, whom Smith calls the most important people in the organization.
"I think there was a little too much focus on the corporate headquarters, which happens in all big companies, and we forget that we are really here to support the field," he said.
Smith stepped into the role of CEO of the world's largest third-party hotel management company in March after a brief retirement from a 35-year career in hospitality.
Because hotel owners are Aimbridge's No. 1 client, it was necessary to make sure the company and its teams could provide them the answers they needed and reach their goals.
The company recently rolled out a dashboard called Aimbridge Intelligence that allows owners to look at their numbers faster, Smith said. Owners can review performance metrics and compare their different hotels managed by Aimbridge.
It allows owners to not just ask Aimbridge questions but pull information and hold it accountable, he said.
Another development was instilling a performance culture, Smith said. The team built a strategy map covering the next few years, and it translated that into scorecards used in performance reviews at the end of every month at every level of the organization. The training is still going on further down into the organization, but people are looking at their numbers. He believes by measuring in a systematic way, it changes peoples’ behavior proactively.
Everyone is learning, and it creates an opportunity to figure out who’s performing and who isn’t, he said. There’s a natural tendency in leadership to like people who are similar, but that can lead to missing problems. This process can help guide around that, and it can also help find people who are delivering great results but may otherwise be overlooked.
“It gives you a chance to pat the one person on the back and tell the other person, ‘Hey, let's lift up your game a little bit as we go forward,’” he said.
Aimbridge has rolled out strategy maps and balanced scorecards to make sure everyone has the discipline each month to look under the hood and see how they’re doing, he said. They have metrics to review: market share on the top line, general operating profit margin at the bottom line, associate satisfaction measured by turnover and guest satisfaction.
“The goal is that you pick those four or five metrics, which is really simple, but the hardest part is the discipline of making sure you’re focused on them all the time and deliver on them,” he said.
At the corporate level, the teams have to wake up every day and think about how what they’re doing can drive more profit at each of Aimbridge’s hotels, he said.
Opportunities for future growth
With industry experts expecting a rise in hotel transaction volume in 2025, that opens up chances to gain new management contracts. But it also means third-party operators will need to protect what they have in their management portfolios.
“First and foremost, it’s about us proving our worth as operators,” Smith said.
To not lose contracts when a property changes hands, Aimbridge has to prove it’s superior to its competitors, he said. The same is true to attract the new owner of a property.
While that sounds simplistic, that’s what operators sell, Smith said. A company selling cars has to have the best reputation for having cars that drive well and don’t break down.
“That's the part that we're probably spending the most amount of time in the company working on and fixing and lifting up and saying, how can we make that competitive advantage even more so,” he said. “How can we lift it up?”
Aimbridge’s market share is improving year over year, and within the last three months, margins are improving as a result of the work everyone is doing, he said. General manager turnover is also below the industry average.
Aimbridge’s team believes there will be an uptick in hotel deals as early as the fourth quarter of 2024, Smith said. It’s been slow and steady over the last 18 months or so, and everybody is waiting. There are a lot of owners under a lot of financial pressure right now, and that may mean handing back the keys or selling a property or two in the interest of keeping the rest of their portfolio.
“What it means for all of us in the operating world is it's just opportunity and being ready and set for it,” he said.
Major hotel brand companies continue to focus on their loyalty programs and digital channels, and they’re moving away from the management space, opening a large opportunity third-party operators, Smith said.
The number of potential openings is even greater in international markets, where third-party management is a newer but decidedly growing practice, he said, pointing to his background working overseas for Marriott International. Brand franchises are growing across the globe, opening up opportunities for third-party managers.
“In the Middle East and Asia, it's just about to get kicked off, and so there's a lot of phone calls from that part of the world,” he said.
Along with organic growth, Aimbridge has increased its size and scale over the years through buying other management companies. It merged with Interstate Hotels & Resorts in late 2019, and it later bought Grupo Hotelero Prisma and Prism Hotels & Resorts in 2021 and then Terrapin Hospitality in 2022. It also acquired 27 management contracts in early 2022 when NewcrestImage sold its portfolio to Summit Hotel Properties.
Looking ahead, Smith said Aimbridge is open to further acquisitions and is in fact currently in talks with a few groups over possible deals. What he’s looking for is deals that will add something to the company that’s it’s missing, not just buying contracts.
“I’d rather give key money or sliver equity or some other things,” he said. “I don’t want to go out and just buy contracts. You want something that’s going to give you an opportunity to grow in an area that maybe you’re short in or that you need to grow. Sometimes there’s opportunistic deals out there.”
He said some groups approached Aimbridge after learning more about its new leadership team.
“This is just like a hotel deal that you negotiate,” he said. “You’re going to negotiate a lot of them to get a few of them. It’s got to work for both sides, so we’ll see what happens, but our feelers are out there, and there are lots of opportunity overseas.”