(Corrected on March 7 to clarify when hotel management changes typically happen in the 11th paragraph.)
LOS ANGELES — 2022 was a year of significant growth and major milestones for HP Hotels, and executives said the company is poised to thrive even in a potentially choppy environment.
Senior Vice President of Owner Relations and Development Ed Robison said HP Hotels added seven new hotels to its management portfolio in 2022, growing to 27 hotels, with performance metrics already exceeding pre-pandemic levels. The year also marked the company's 20th anniversary in operation.
"Occupancy, [average daily rate] and [revenue per available room] are all above 2019 levels, so we can effectively say that's behind us," he said during the 2023 Americas Lodging Investment Summit. "And in 2023 we still expect growth off of that."
Robison said the company has already added another new hotel to its portfolio since the start of the new year and is close to finalizing a deal to add a new portfolio under management. Beyond that, Robison expects 2023 to be a good to great year for the broader hotel industry.
He said HP Hotels has had a minor reorganization to put more focus on employee recruitment and retention and is poised for a new growth period.
"We don't feel a lot of the pressures that a lot of others have felt, so we think it's going to be a good year for us," he said. "We also know that we've set ourselves up for success in 2023."
Industry prognosticators, including CoStar's hospitality analytics firm STR, are calling for an unprecedented increase in RevPAR even if there's a broad economic recession in 2023, and Robison said the fact that it's never happened before doesn't mean this isn't the year it could happen.
"There are so many things in this industry that happened that have never happened before, and we've always made it through," he said. "We've always come out stronger than when we went in."
Robison said this newfound resilience in the industry — and HP Hotels — can be traced back at least in part to the COVID-19 pandemic. Whatever economic turmoil takes place in 2023 or 2024 will pale in comparison to the depths of the pandemic, and that crisis helped spur change across the industry, he said.
"What COVID did was just accelerate [a lot of operational changes]. I think things were trending that way, but we probably cut out over five years of trial and error to get to this point," he said.
One of the primary challenges HP Hotels and other hotel management platforms face is a lack of overall transactions since change of ownership is a primary catalyst for management changes, Robison said. He added that comes down to good ownership relationships and looking for opportunities where they come up. He said brands pushing for more consistent and established managers is also a chance for growth.
"A lot of owners looking to sell right now were kind of given grace by brands to not have a management company, and now they're realizing they need a management company," he said. "So from that aspect, we could be on the right end of things."
He said mergers and acquisitions are not historically a core part of HP Hotels' strategy to spur growth, but could be on the table given the right circumstances.
"It really hasn't been our forte, however, we do realize that we have to look at that," he said. "That's what [CEO Kerry Ranson] is working on right now, to see if there are some opportunities where we can ... merge but make sure HP is still a survivor in that. We don't want 20 years of good management to just go away by name change."
One thing he'd like to see going forward for the long-term health of the industry is more flexibility and communication from hotel brands.
Brand standards should "depend on the market [and] your clientele," he said.
"Hotels have to have that freedom," he added.