LOS ANGELES — “Now I do what I was originally hired for.”
Now that the majority of Aimbridge Hospitality’s debt has been restructured into equity, CEO Craig Smith said he can 100% focus on building an organization keyed in on hotel performance.
In an interview with Hotel News Now at the Americas Lodging Investment Summit, Smith said it’s been a sequential process. The first step was fixing the capital stack, which then allows addressing the company's operations and reputation. That allows the company to grow.
“Now we’ve got the cash to be able to grow if we need to, but we don’t have this pressure to [make an initial public offer] or to sell in the next year or two,” he said. “So, we’re able to now grow the right way.”
It’s great not having to pay so much in interest or principal payments, but the biggest piece is that the pressure to do the impossible is gone, he said.
“My favorite word going forward, in some ways, is going to be discipline,” he said. “We have to be disciplined about where we grow and how we grow and to make sure that growth is accretive to the company and not too fast.”
In January, Aimbridge announced it had reached an agreement with its lenders to restructure the company's balance sheet, turning more than $1.1 billion of debt into equity ownership for a group of its lenders, taking "a weight off our shoulders," Smith said at the time. That new ownership would also provide $100 million in new capital.
Before the financial issues, Aimbridge had a target on its back because of its size, and Smith said he knows the company still has one even after the restructured debt.
“In some ways, that’s the best thing that could happen to you because otherwise you can become complacent,” he said. “I welcome, even on the international side, more competition. I think it makes us wake up every day and run even faster and try even harder.”
There are a lot of great competitors in the third-party management space, he said. There are some competitors the company has taken notes on to try to do things more like they do to improve its own operations.
Aimbridge will continue to fix itself in the United States and pursue further opportunities in overseas markets, Smith said. Many existing owners and new owners are trying to work out deals in the U.S., a sign that the company’s reputation is improving. For the first nine months on the job, he said he repeatedly heard the company was “in the penalty box” with owners, but that’s changing now.
Owners and Aimbridge employees can expect to see settled troops now, he said. The company lost a lot of talent when he first started as people were worried about its prospects. Now that the debt situation has been worked out, people can see the stability in the company and its leadership after some changes.
“I think that’s created a sense of, 'we’ve got our swagger back again' inside,” he said.
Smith said Aimbridge is getting more phone calls than it has jobs available, which is a promising sign for its prospects. It’s a talent game, and having the right people do the jobs will drive performance.
Smith said a lot of people asked why he didn’t leave for another company at any point in his 35-year career at Marriott, but he said he never saw a reason to leave. The company kept promoting him and paying him more, allowing him to send his kids through school, and paid for extra education for him as well.
“I want to be that company,” he said. “I want to be the company that people say, ‘Hey, I don’t want to work for Aimbridge for five years. I want a career with Aimbridge.' That’s what Bill Marriott really built: a huge company that felt like a small family company. That’s kind of what I aspire to.”