LOS ANGELES — Sloan Dean's expectation for 2022 are crystal clear. The president and CEO of Dallas-based hotel management company Remington Hotels said this is the year his company buys another operator.
"I think this will be the year that we will consummate a merger/acquisition," he said. "I do think scale matters. We're 90 hotels, and you know, our procurement cost goes down if we continue to get a little bit bigger. Our ability to recruit, retain and have the best general managers out in the field is better if you have 150 hotels versus 100. I do think we're at the size where an M&A transaction is accretive."
Various deals among hotel operators were announced in conjunction with the 2022 Americas Lodging Investment Summit, and while speaking with Hotel News Now during that conference, Dean said he wants to continue to be careful about the size and focus of his company even if they managed to pull off a deal.
"I don't want to buy three or four [other companies] where we get distracted from actually operating," he said. "And I think that's what's happening in some of the [mergers and acquisitions] in third parties where you have these companies that are just so fixated on mergers and acquisitions that they are actually not operating really well."
A deal to expand its overall portfolio goes hand in hand with Dean's efforts to grow Remington's platform beyond simply being the management arm of the Ashford Group of Companies, which includes two real estate investment trusts — Ashford Hospitality Trust and Braemar Hotels & Resorts.
"Right now, a third of our portfolio is third party, and by the end of this year more than half will be third party," he said.
He noted his company's organic growth in 2021 was more than double his initial expectations, and he attributed that to the relatively few direct competitors for the space they operate in.
"There's really only 10 or 15 firms that can go operate a half dozen full-service hotels tomorrow if you said to them, 'Hey, I need you to take over our portfolio,' and we're one of them," he said.
He said the biggest opportunities for Remington are squarely in that space of focusing on full-service assets, including resorts and independent properties. He said he doesn't foresee Remington moving into operating more select-service hotels.
"Right now, our resorts are absolutely crushing it, so anything that's got a domestic leisure demand component, we'd love to talk to owners to be a part of that," he said.