Hospitality Transactions and Development: Insights from Industry Experts

At the recent annual meeting of Cayuga Hospitality Consultants, we brought together a panel of experts to discuss the state of transactions and development in the hotel industry. Here is a look into some of the key topics and points from the panel.

Moderator Jon Peck, Peck Hotel Consulting: Let’s dive in by having each of you give a quick snapshot of your company, starting with Claire.

Claire Wallace, Pyramid Global Hospitality: Pyramid is a hotel investment and management firm based in Boston. We manage about 250 hotels across the U.S., Caribbean, and Europe, covering all chain scales—from select service to luxury—and focusing on lifestyle and independent resorts. We’re in every major U.S. market.

Brittney Jones, Brittain Resorts and Hotels: We’re a full-service management company based in Myrtle Beach, South Carolina, managing around 30 hotels, including independent resorts, condo hotels, and select-service branded assets. We also oversee 40+ F&B outlets and generate approximately $285 million in revenue annually. For 80 years, our ethos has been about building strong partnerships and delivering great performance.

Greg Mount, Victory Hotel Partners: Victory Hotel Partners started just before COVID, focusing on boutique and independent hotel acquisitions in the U.S. We’ve since expanded by acquiring Hay Creek Hotels, a regional management company. Our approach centers on creating value and working with people we trust after decades in the industry.

The State of U.S. Hotel Transactions and Development

Jon Peck: How do you see the current state of the U.S. transaction and development market?

Claire Wallace: In 2022 and 2023, hotel transactions slowed significantly, but activity has picked up in 2024. Pricing expectations between buyers and sellers are aligning, and we’re seeing more new entrants, particularly high-net-worth investors, viewing hotels as a stronger asset class compared to others like office spaces.

Brittney Jones: We’ve noticed similar trends. Interest rates are dropping, which is encouraging. We’ve been on the seller side for some assets recently, and we’re optimistic about finding acquisitions that align with our value-add and repositioning strategy in leisure destination markets.

Greg Mount: Post-COVID, some markets, especially resorts, experienced significant slowdowns after initial gains. We’re projecting muted growth in 2025, compounded by ongoing labor shortages and operational challenges. However, technology is helping streamline processes and control costs.

Soft Branding and Strategic Growth

Jon Peck: What are your thoughts on the rise of soft branding?

Claire Wallace: We’re brand-agnostic at Pyramid and evaluate each opportunity individually. Soft branding offers a balance of brand support while retaining the individuality of the property. With the growing demand for unique, localized experiences, soft brands align well with what today’s travelers seek.

Brittney Jones: As an independent-heavy company, we’ve had conversations about soft brands to stay competitive in our markets. While we aren’t actively pursuing that type of conversion right now, soft branding could be a viable option for diversifying our portfolio. It’s about finding the right fit for each property while maintaining our operational strengths.

Greg Mount: We prefer the boutique and independent space for its flexibility and value proposition. While branded hotels ramp up faster, independent properties often deliver better long-term value, especially when managed effectively.

Challenges and Opportunities in Management

Jon Peck: A recent survey shows 58% of asset managers are considering a change in brand or management company. Why do you think this is happening?

Brittney Jones: Owners often feel disconnected after mergers or as management companies grow too large. They want personalized attention, which can get lost in bigger organizations. At Brittain Resorts, we focus on smart, controlled growth to maintain strong relationships and deliver hands-on service.

Claire Wallace: Owners are also under pressure to meet loan maturities and stabilize performance. Smaller management companies often lack economies of scale, while larger ones might seem impersonal. Success depends on maintaining trust and aligning goals.

Greg Mount: It’s time for management companies to rethink their value proposition. Owners want a stronger connection between fees and performance, and the best companies will innovate to meet those expectations.

Key Money and Financing Trends

Jon Peck: Where are you seeing key money offers from brands these days?

Claire Wallace: Brands are getting aggressive with key money, especially for strategic projects. For example, we’ve seen significant contributions for luxury collection conversions, where the brand’s interest aligns with the property’s positioning.

Brittney Jones: It’s a competitive environment for brands, too. They’re loosening restrictions, offering fee discounts, and providing more incentives to secure deals.

Greg Mount: Key money should always be evaluated carefully. While it can help with upfront costs, it’s essentially a discount on future fees. Owners should consider equity participation from brands or management companies as an alternative.

About the author

Jon Peck is President of Peck Hotel Consulting and active Consultant with Cayuga Hospitality Consultants. He has been directly involved in more than 60 hotel openings and acquisitions.  His specialties include asset management plus all levels of hotel and resort development. Previously, Jon Peck served as Chief Operating Officer for White Lodging and was responsible for the day to day operation of 155 hotels in 23 states.

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