The Hyatt Regency Boston / Cambridge , managed by Davidson Hospitality Group .
SPECIAL REPORT
Rise of the
MANAGEMENT COMPANY
AN ALTERED LANDSCAPE PUTS BRANDS AND THIRD- PARTY MANAGERS IN NEW TERRITORY .
Contributed by HARVEY CHIPKIN
Multi-branded lodging companies , from Marriott International and Hilton to Hyatt Hotels Corp . and InterContinental Hotels Group , are leaning hard into asset-light strategies that favor franchising , an approach that generates fees with a lower cost base . The void , then , of operating assets has fallen more and more to thirdparty management companies ( TPMCs ), which hire , fire , oversee properties and answer to owners who care about one thing : profitability .
There ’ s a reason why , in the U . S ., hundreds of TPMCs , small and large , vie for properties to add to their own portfolios , amid a sea change of consolidation within the ranks .
As a result , TPMCs increasingly have the resources and leverage that brands formerly had and brands are recognizing the enhanced capabilities of their potential management partners .
Though the connection between brands and TMPCs has always been competitive on some level , said Kaushik Vardharajan , associate professor of the practice and director of the real estate and innovation & entrepreneurship programs at the Boston University
8 hotelsmag . com September 2023