PLANO, Texas — New deals, new headquarters and a new sense of identity have Aimbridge Hospitality gearing up to pursue management contracts with hotel owners that hadn’t considered the company before.
As the largest third-party hotel management company, that sounds counterintuitive, but company executives say with its scale and size, some owners think Aimbridge can't offer personalized attention, and that’s a mindset the company intends to change.
Even with a portfolio of more than 1,500 hotels domestically and internationally, there’s still room for Aimbridge to grow, President and CEO Mike Deitemeyer said.
Hotel brands are expanding with tens of thousands of new units, indicating a lot of potential and opportunity, and Aimbridge is a long way from a density that would create obstacles for further growth, he said. In North America, where the company has its greatest presence, Aimbridge has less than 20% market share.
“We have an appetite to be thoughtful about [growth],” he said.
Refreshing the Aimbridge Identity
During the pandemic, Aimbridge’s leadership realized that many companies had joined it, but they hadn’t taken the opportunity to focus on what Aimbridge is and what it’s about, Chief Marketing Officer Andrew Jordan said.
“Everything is really much more focused on our people,” he said. “We realized that the true differentiator for Aimbridge is going to be about our people.”
The company has enhanced its training, support and recognition of retention for employees, he said. The company’s new tagline is “Our people. Your success.”
Globally, the company is shifting its different divisions to all be under the umbrella of Aimbridge’s new corporate identity, Jordan said. Following its acquisition of Grupo Hotelero Prisma, its website in Mexico now says Aimbridge Prisma, but by early 2023, it will say Aimbridge. The same will happen with Interstate in Europe.
It’s a simple graphic shift, but it means something to Aimbridge’s employees to be part of one large, global company, Jordan said. Having its partners in hospitality think of Aimbridge as one global company makes a difference when working with prospective partners to fully demonstrate the benefits of the company’s scale.
The change is more than symbolic, particularly when it comes to attracting and holding on to talent because of the opportunities Aimbridge can provide, Jordan said. With its scale, employees can stay in one market and grow their career, or they can work at different hotels around the world all while staying with one company.
“That is a true differentiator for us,” he said. “Nobody else can really do that. Certainly, no other management companies can do that.”
For owners, the value proposition associated with Aimbridge’s global operations gives a sense of knowing what to expect from an Aimbridge-operated hotel, much like a guest knows what to expect from staying in a branded hotel, he said.
“That’s really what this project is all about,” Jordan said. “It’s really tightening that definition, that value proposition, so that we’re very clear with our owners of what it is that we bring to the party and how we are different from others.”
New Building, New You
Aimbridge moved into its new 175,000-square-foot corporate headquarters in Plano, Texas, in March 2021 after being at its previous building in Plano for nearly five years.
It's new office gives those arriving a bit of a hotel experience. There’s the lobby itself with a front desk, seating area and images of Aimbridge-managed hotels projected onto an exposed brick wall.
Off to the right are a series of meeting rooms, a mini catering area, a fitness room and a larger conference room that hosts the company’s town hall meetings. To the left is a large, still unfinished area that will become a WeWork-like area for employees visiting from hotel brand companies, online travel agencies and other hospitality partners.
Directly behind the lobby is the building’s restaurant, the Ascension Café, where employees can meet for meals and drinks on their breaks or to work collaboratively. There’s a private dining area with a wall that opens up to allow diners watch a chef prepare their meal.
The upper floors contain individual offices, open office-concept desks, meeting rooms and other spaces for collaboration.
Having the extra space for employees of its industry partners to work gives them an inside look at how Aimbridge works and shows what it can do that its competitors can’t, Deitemeyer said.
“They have an opportunity to see 20 people, 50 people who work with their brand, and it’s a more effective way for them to run their own business by spending time with us,” he said.
One of the results in investing in such a building is that when potential partners and owners come to Aimbridge, such as happened with NewcrestImage’s team and Prism Hotels & Resorts’ team ahead of their deals, those prospective partners understand the value better, Deitemeyer said.
“They understand, ‘This is why we’re moving to Aimbridge,’ because of the investment that’s happening for their people, the resources available that they don’t have,” he said. “We're excited about it and the long-term value creation that happens here.”
Appealing to Owners
Aimbridge’s goal is to be the best option for anybody who owns a hotel, Chief Development Officer Greg O’Stean said. It must be able to use its scale to give owners better IT, accounting, revenue management and people.
“Because, at the end of the day, that’s what we deliver: our systems and people,” he said.
While the company’s scale is its biggest selling point, it also creates a challenge in attracting new owners. When the news comes out that Aimbridge has bought another operator and added hundreds of new hotels, the owner of two hotels doubts that Aimbridge would be the right manager, O’Stean said.
Aimbridge has about 400 owners for its more than 1,500 hotels, he said. Among its 20 biggest owners, the owners have between 20 to 80 hotels, with one owning 159 properties. Everyone else has an average of two to three hotels.
“The vast majority of our current owners have far less than five hotels,” he said.
In an ideal world, Aimbridge would be everyone’s first call, regardless of whether the owner has one hotel or 100, O’Stean said.
“We want to get to the place where somebody says, ‘Well, I need a third-party manager. There’s about 100 of them out there. I know Aimbridge is going to be my first call and then everybody else will have to compete with that,’” he said.
That process started with Jordan looking at the company’s identity and figuring out how it presents itself to the market and how owners view Aimbridge, O’Stean said. Currently, many owners see Aimbridge as a select-service management company while others see it as a full-service operator. In fact, it’s both, but it also has a lifestyle division, Evolution Hospitality, as well as resorts in its portfolio.
“It’s hard for the customer base to think of us — they’re trying to put us in a box, and we’re trying to break that box,” he said.
Business Development
O’Stean’s business development team currently has 40 members and will grow to about 50. Because of how geographically spread out its owners’ portfolios are, Aimbridge’s business development team has been reorganizing itself based on specific owners and owner relationships. That approach helps the team focus better on each owners’ strategy to provide better results, he said.
Publicly traded real estate investment trusts want something different from Aimbridge than a high-net worth individual would, he said. A company like Summit Hotel Properties will want regular reporting on numbers sliced in 10 different ways, but they don’t care as much about how operators achieved those numbers and the story around them.
“Summit doesn’t want to see how the sausage is made. They just want the sausage, and they want it to be the same every month because that’s what they tell their investors,” O’Stean said.
The opposite of that is typically someone who made their money outside of the hotel industry but bought a hotel because they liked it, he said. These owners aren’t necessarily at the hotel each day, but they’re talking to the operators regularly to find out what’s going on and how they’re solving problems.
Aimbridge has a new capital partner with hundreds of millions in a fund, but the team has five people on it, and most of them are investment, O’Stean said. The new partner contacted Aimbridge about a hotel in Chicago and asked about underwriting, conversion opportunities and operations. A member of Aimbridge’s business development team has traveled to work in-person with the new capital partner several times, which in turn led to several more deals.
“Our biz dev team is their biz dev team,” he said. “We’re finding them the opportunity, and we’re telling them how to take it from A to Z. We’re helping them invest their money, and they don’t have to hire a biz dev person.”
Internally, Aimbridge has targeted hotels with larger room counts, but many of its deals involve select-service and economy hotels because there are so many of them, and those are the types of hotels that have been actively trading, O’Stean said. Over time, the company has been shifting to take on more of the bigger hotels and resorts.
“It’s just as hard to do a 100-room hotel as it is to do 1,000 rooms,” he said of the deals process.
Aimbridge is expanding in Mexico and the Caribbean, O’Stean said. At the time of the interview, he would later be in talks with a group that has all-inclusive resorts as the operator hopes to further grow its full-service and resorts vertical.
“We’re at 250. We’re bigger than three of our competitors, but nobody thinks of us as resort experts or full-service experts,” he said. “They just think of us as big.”
Aimbridge intends to grow its presence in Europe, but it’s challenging to enter and then grow in new markets because there’s no track record to show owners, O’Stean said. In the U.K., Aimbridge had a nucleus around London, and that made it easier to expand there, he said.
Expanding Opportunities
In November 2021, hotel owner and operator NewcrestImage announced it would sell a 27-hotel portfolio to hotel real estate investment trust Summit Hotel Properties for $776.5 million. In January, NewcrestImage announced it would transfer its existing hotel management agreement rights to Aimbridge and become a minority shareholder in Aimbridge. It’s CEO, Mehul Patel, later joined Aimbridge’s newly formed CEO Advisory Board.
Over the last several years, Deitemeyer said he’s learned more about Asian-American hotel owners. While the majority may be families who own and operate one or two or even a handful of hotels, there’s a significant number who started with one and have grown their portfolios to a much larger size, he said.
Patel’s NewcrestImage is one of those owner operators, and Deitemeyer said companies like Patel’s are a newer opportunity for Aimbridge. His family was so vested in the success of the individual assets, and that success allowed them to grow to hundreds of hotels over time.
The family has institutionalized the business, and much of what it did is what Aimbridge does, Deitemeyer said. NewcrestImage grew to a point that many like it have in which the family owning the business realizes managing the hotels isn’t the way forward.
“[Patel] hit a point where he realized he was creating the most value not by running the hotels but by developing and selling the hotels,” he said.
Deitemeyer said he spoke with another AAHOA member recently who told him that he’s not interested in selling his hotels and he looks at them more like dividends.
“Those are the families and folks that you’re targeting where it’s about being part of a long-term solution for their family and how they think about their generational family wealth,” he said.
During an Aimbridge town hall in early March, Patel spoke about his career in the hotel industry and his NewcrestImage's deal with Aimbridge.
NewcrestImage has over the years sold 200 hotels, worked with multiple hotel brand companies, including Marriott International, Hilton, Hyatt Hotels Corp. and IHG Hotels & Resorts, and won numerous awards, Patel said.
“That’s what we created from the 30-years-ago journey that started with one ‘mom and pop’ hotel [grown] to the large management company we built,” he said.
Aimbridge was the right operator for NewcrestImage’s hotels because in its growth to 1,500 hotels, it’s been nimble and efficient, Patel said. It wasn’t an overnight development, and it grew the right way, making it a preferred operating partner, he said. NewcrestImage and Aimbridge share many of the same cultural and operational values, and that made him and his team comfortable enough to go forward with the deal.
“I wouldn’t say we sold it. We invested in the right partner,” he said. “Today we become a family office.”
Editor’s note: Aimbridge Hospitality paid for meals and accommodations at The Dallas Statler, Curio Collection by Hilton, to allow for a series of interviews at the company’s headquarters. Complete editorial control was at the discretion of the Hotel News Now editorial team; Aimbridge had no influence on the coverage provided.