ATLANTA — Buoyed by a recently announced partnership with a hotel developer, Hotel Equities is seeing major opportunities in the luxury and upper-upscale segments as it looks for its next acquisition moves.
Brad Rahinsky, president and CEO of Hotel Equities, announced the new partnership with Arkansas-based Pinnacle Hotel Group during the recent Hunter Hotel Investment Conference. In an interview, he described Pinnacle as being in “absolute lock-step alignment" with Hotel Equities when it comes to vision, culture and prioritizing business decisions.
The majority of Pinnacle's portfolio includes select-service Hilton or Marriott hotels, mostly located in the Midwest, Rahinsky said. The company is interested in growing in the full-service and upper-upscale hotel segments.
“Our partnership creates a couple of things for them,” Rahinsky said. “One is scale with the efficiencies that our platform provides operationally that allows them to now take their developer hat and look at different markets, different regions within the country that historically they would have been a little bit adverse to take a look at because of their ability to effectively operate those. That goes away for them overnight with this partnership."
Pinnacle will be added onto Hotel Equities' management platform as of May 1. The two companies have already collaborated on the recently opened AC Hotel by Marriott Kansas City Downtown, of which Pinnacle is an owner and HE is the manager of.
“They’re just wonderful developers, and wonderful people, and that’s who we’re looking for to do these partnerships with,” Rahinsky said.
It's not the first, nor is it the last, of this type of strategic partnership, which is integral to Hotel Equities' growth plans.
“It’s going to continue to be a focus throughout ’25 as we look for different partnership opportunities with groups we’re aligned with,” Rahinsky said.
M&A activity is on the top of mind for Hotel Equities, which has expanded recently in the Caribbean and Latin America.
“We are still looking at acquisition opportunities and looking where we can come in with some capital, whether that’s through key money, some equity, some rescue capital, just see where we can come in on some projects that potentially have stalled out a little bit, are in trouble, or are looking for a new partner to come in and lift the opportunity,” Rahinsky said.
Specifically, Rahinsky said he's looking at high-end opportunities. He pointed to the pandemic accelerating travelers' interest in more bespoke and fewer "cookie-cutter" hotel stays.
“We believe that boutique experiences in the luxury and upper-upscale premium sectors are really where a lot of the travel experiences not only are at today but will continue to go into tomorrow,” Rahinsky said. “Luxury and upper-upscale markets will continue to outperform the overall markets as they have in the recent couple of years.”
Rahinsky expects that current headwinds and uncertainty that the hospitality industry is facing due to the recent actions from United States President Donald Trump will level out. Rahinsky spoke to HNN in mid-March before some of Trump's tariff announcements.
“The last 50 to 60 days have been anything but boring," he said. "There’s been a lot of volatility, a lot of things moving around at hyperspeed in terms of the administration and what they’re doing. If you’re not looking at that on a daily basis, or an hourly basis, and how that impacts our business, you have the potential to get yourself in trouble.”
Rahinsky said he's keeping an eye on current conditions opening up some development in terms of cost of capital.
“Once this stabilizes a bit, we think that [it] will be overall positive," he said.
But one thing Rahinsky is concerned about is declining international travel into the U.S.
"There is a potential or possibility of some of that international travel, which we depend on to create compression here domestically, to slow down or stop for a moment, depending on which country you’re talking about," Rahinsky said. "Once again, I think that the administration will smooth that out in the near term hopefully and that international travel will keep coming into the U.S."
Watch the video embedded above for Rahinsky's takes on the new partnership, his bet on luxury growth and more.
(Corrected on April 14 to update Pinnacle Hotel Group as Hotel Equities' partner in the second paragraph.)