Steve Van never intended to sell Prism Hotels & Resorts — a company he founded and ran for nearly four decades — until executives at Aimbridge Hospitality came calling.
Speaking on the latest episode of the Hotel News Now podcast, Van discussed how the decision he made a few years ago was more emotionally charged than he expected and how the people side of the business remains the most important.
"I didn't realize how meaningful it was until after we left because so many employees came up and said 'That was the best time of our life, and it helped our family,'" he said.
Hotel News Now reached out to Van to share his perspective on how hotel operating companies can navigate mergers and acquisitions. Since the start of November, several hotel management company deals have been announced: KSL Capital sold Davidson Hospitality to Nautic Partners, PM Hotel Group merged with Sightline Hospitality, Pyramid Hotel Group's European division Hamilton Pyramid Europe merged with Axiom Hospitality, and Peachtree Group's management division entered into a partnership with Group 10 Management.
- Click here for the first episode in HNN's two-part podcast series diving into mergers and acquisitions involving hotel management companies. The first episode features W. Chris Green, formerly of Chesapeake Hospitality and Remington Hospitality.
Aimbridge closed its acquisition of Prism in late 2021, expanding what was already the largest third-party hotel operations platform and giving it a larger portfolio in the hotel receivership space, which was a specialty of Prism's.
Van takes a particular amount of pride in the culture at Prism, and the fact that many of the leaders who started or grew their careers at the company are now in high-ranking spots at either Aimbridge or other prominent management companies.
He said a lot of that comes from the recognition that the hotel industry is a business built on personal relationships built over time.
"Unlike selling widgets to people or leotards or whatever, which you can manufacture and standardize, you're really selling an intimate personal relationship, in my opinion," he said. "And that intimate personal relationship is hopefully going to be backed up by great service."
He said that work becomes difficult through the course of mergers and acquisitions because it's naturally more difficult to maintain those relationships at larger businesses and for many management companies it comes down to finding the "sweet spot" of having some scale and the ability to stay closer with owners. Staying in that space is growing more challenging, though.
"If you're between 30 and 70 hotels these days, you're targeted for acquisition by a lot of people," Van said. "It's hard to translate [your culture] to 400 hotels or 500 hotels."
For all of HNN's discussion with Van, which touched on the pros and cons of different merger, acquisition and partnership deal structures, listen to the podcast above.