LOS ANGELES — Changing conditions during the pandemic led many hotel owners to reevaluate their hotels’ operations, creating opportunities for third-party managers to add to their portfolios.
Atlanta-based private investment, ownership and management company Hospitality Ventures Management Group has added 24 hotels to its portfolio since March 2020, 16 of which were added in 2021.
In a video interview with Hotel News Now at the Americas Lodging Investment Summit, HVMG President and CEO Robert Cole spoke about his company’s growth and integration process, his company's approach to mergers and acquisitions as well as his expectations for the recovery.
With several of the new additions to HVMG’s portfolio, the hotels' owners were looking for a different management company to reduce costs and improve market share, Cole said.
HVMG received several requests for proposals about being part of those changes, he said. In other cases, the company sourced deals for new owners and partners.
“It was a good year for us from a growth perspective, certainly in terms of the number of transactions,” he said. “In terms of the number of hotels added to the portfolio, it was our second busiest year in our company history.”
When integrating so many hotels to its management portfolio, HVMG follows a playbook, Cole said. It’s a 127-point checklist of items that need to get done, many of those in advance of taking over management and then after the transition for stabilization. The company has a full-time team member leading these transitions to guide the process.
“We’ve done about 120 total transitions in our company history, so we’ve learned from our previous mistakes,” he said. “We’ve got a pretty tried-and-true process in terms of integrating hotels.”
As HVMG has grown and the industry has been busy with management companies buying others, Cole said mergers and acquisitions have been on the company’s radar for the last 18 months or so. His company has had conversations with operators with smaller portfolios but has not yet consummated anything.
Similarly, larger companies have approached HVMG trying to make a deal, but at this time, Cole said he likes where the company is positioned.
“Our objective is to actually be on the acquiring side at this point, but you always leave all your doors open,” he said.
For more on HNN’s interview with HVMG’s Robert Cole, watch the video above.