Over the past 18 months, the hospitality segment has undergone a transformative wave of mergers and acquisitions, fueled by the need for portfolio diversification, expanded market reach, and greater operational scale. As companies seek to strengthen their competitive edge, these consolidations continue to reshape the operational landscape, creating larger, more agile management firms capable of delivering enhanced guest experiences, driving long-term growth.
Among those partnerships was the merger between PM Hotel Group and Sightline Hospitality, announced in November 2024. President of PM Hotel Group Joseph Bojanowski told LODGING the combination of forces took almost a year to come to fruition. At their core, PM Hotel Group and Sightline Hospitality shared a mutual respect and a similar approach to doing business.
“Sometimes, there are culture clashes and other things that happen, and the need to eliminate lots of people because of redundancies or dissimilar philosophies or different operating models,” Bojanowski explained. “Ours were very, very closely in sync, and so it allowed us to bring a lot of their key personnel over.”
Since the merger, PM Hotel Group’s geographical footprint expanded throughout the United States to mountain regions, the West Coast, and Hawaii—“markets we were not in but were attractive to us for a lot of reasons,” Bojanowski described. Fitting into the Modus by PM Hotel Group strategy, these markets also included Lake Tahoe, Las Vegas, and the Sonoma Valley—locations that are particularly attractive to the company because they appeal to Millennial and Gen Z travelers who search for experiential hotel stays in exciting destinations.
In addition to PM Hotel Group and Sightline, 2024 saw multiple mergers, acquisitions, and partnerships between many major players in the hotel operations environment. The year kicked off with Scarlett Hotel Group merging with Everwood Hospitality Partners in January. Then, in May, Stonebridge Companies acquired Real Hospitality Group. And in November, Nautic Partners entered into a partnership with Davidson Hospitality Group, where it would acquire the management company, and Griffin Hotel Management merged into Meyer Jabara Hotels. The consolidation implications will continue to shake up the hospitality operational segment.
Impacting Ownership, Associates, and Guests
As more companies continue to combine, the number of hotels, clients, and associates affected by these consolidations steadily grows. Each transition brings change, and many will feel the impacts of new management structures and operational shifts. Bojanowski mentioned PM Hotel Group “had some practice” with two smaller mergers a few years back, but companies should always be aware of challenges.
“We had a lot of conversations with those ownership groups during that period leading up to the merger, highlighting the benefits that a company of our size brings, but [we explained] that we are not and don’t ever intend to be a size that we cannot deliver a highly curated and personalized experience, not only to our owners, but to our associates as well. We believe that’s the formula of our success,” Bojanowski said.
When Stonebridge Companies acquired Real Hospitality Group, its intention was to culturally and synergistically bring the companies together. With that goal in mind, the impact on its owners remained minimal. “The deal’s biggest strength was the balance of talent between the two companies and how this rounded out the vertical expertise of the company,” said CEO and President of Stonebridge Companies, Rob Smith. “Our primary clients, our owners, have expressed how pleased they are that a merger didn’t mean the subtraction of resources as is oftentimes seen in our space, but rather, the fortification of support.”
“Change is just in general tough for people, both above property and on property,” said Principal of Scarlett Hotel Group, Rob Sadoff, whose company has had a smooth transition with Everwood Hospitality Partners. “Once they see it happen, they get a little bit more guarded, I would say. You really have to prove the case, and I think we’ve done a really good job of [ensuring] our legacy team gets it. They understand; they’ve obviously adapted very well.”
Sweet Spot
All hotel management companies operate at a size that aligns best with their strategic goals, allowing them to stay agile within their market segment and optimize performance. For some, remaining smaller enables them to deliver highly personalized experiences for both hotels and guests. Others, however, find success in expanding their footprint, leveraging scale to drive growth and efficiency across a broader portfolio.
Smith noted that there are potential drawbacks of both larger and smaller sizes. “There’s a lot of talk in our space about companies being too big and properties being lost in the bureaucracy of the company. Still, it’s equally problematic when the firm is too small and can’t afford to provide the right tools and infrastructure,” he noted.
To mitigate these operational drawbacks, Bojanowski mentioned the imperativeness of balance to positively impact the guest experience. “There needs to be a balance between the ability to have the resources and scale to be able to deliver that type of experience for guests and for associates. But there has to be a balance with that scale. When you get too large, it becomes highly programmatic. … There is a tipping point where scale is actually detrimental in a diversified portfolio because you can’t deliver personalized, curated experiences for an individual hotel or individual owner.”
For Scarlett Hotel Group, which is a relatively smaller company, getting operationally on track was driven by “making sure you have the right resources and personnel in order to make sure that everything will happen. And, fortunately, we were about to bring in additional leadership roles on our side,” said Sadoff.
Underlying Conditions
The future of today’s hospitality landscape is ambiguous, driven by post-COVID-19 pandemic recovery, an uncertain transaction market, and a potential recession on the horizon. Ramifications stemming from the pandemic’s aftermath impacted the need for consolidation. Bojanowski emphasized, “As the market bounced back, companies sought to consolidate, to maximize their operational efficiencies and their market presence. Also, smaller, financially struggling companies merged with others, too, that were more stable and better able to weather any of the residual impacts from the pandemic.”
Sadoff said for some, it’s about being on the defensive rather than the offensive, just in case of a small recession or wildfires impacting hotel performance. He noted Scarlett Hotel Group “takes another approach, though. We’re a little bit more aggressive. We play offense all the time because we just believe in ourselves.”
Smith also mentioned multiple reasons for the consolidation of management companies, but one stands out: “I believe it’s part of the evolution of third-party management. As the brands continue to decide to get out of the management side of our space, this creates greater market-share opportunities for third-party growth.”
Tech-Focused
As the hotel management landscape continues this evolution, the future remains bright despite potential challenges. To assist in what’s next, Bojanowski noted the future of hospitality lies in “technology, technology, and technology.” First, at the hotel level, “transactions and repetitive tasks can be moved to technology,” like robot vacuums for meeting spaces and guestrooms, as well as chatbots for online communication. “The goal of that is to free up personnel in the hotel to be able to deliver the human touch—which is where the real value lies in hospitality—but to be able to do it more efficiently than we ever have.”
Second, Bojanowski added, “the way people are searching for hotels now is changing, and the use of generative AI to search for hotels is growing exponentially and has been every month over the last six months at the rate that mobile searches were going in 2010. You can see how many people use computers versus mobile now, and it’s literally the same trajectory.” Bojanowski shared how there are hotel guests using services like ChatGPT to find hotels, restaurants, and entertainment in the area they’re looking to visit.
More Consolidation on the Horizon
In addition to hospitality technology impacting the future of the hospitality management landscape, operations will continue to become more efficient through scale, acquisitions, and mergers. For those looking to scale, Sadoff maintained, “the only real, true way to scale is through mergers.”
And with hotel brands more focused on guests than operations, future opportunities for management companies should be robust. Smith said, “The brands will continue to focus on the cost of consumer acquisition and the brand experience and will continue to exit the management space. This will continue to create more growth for third-party management in 2025 and beyond.”
Consolidation in the management segment has been forged by portfolio diversification, market presence, and operational efficiency maximization. While those needs continue to arise, there will always be reasons for mergers, acquisitions, and partnerships to grow hotel management companies.
Playing Offense
Proactive leadership encourages team members to thrive
When hotel management companies merge or are acquired, countless moving parts are set into motion—but one priority must remain front and center: the people. In an industry where labor is the backbone of success, a smooth transition goes beyond operational logistics; it demands a thoughtful approach that ensures employees feel valued, supported, and included in the company’s evolution, rather than feeling left behind amid the change.
Multiple strategies can be implemented to maintain a strong company culture during transitional periods. A focus on collaboration will encourage integration between the teams of both companies through cross-departmental meetings, which break down corporate siloes. Rob Sadoff, principal of Scarlett Hotel Group, attributed part of the success of its merger with Everwood Hospitality Partners to the merging of its teams. He said, “We believe that we have the brightest minds in the business, and the more we put our minds together, the stronger we’ll be.”
Value systems can also provide teams with a framework to collaborate in a new working environment. For example, Sadoff said Scarlett Hotel Group implemented a “four-pillar system” for the company. “We focus on our team. First, our team focuses on our guests, then its top and bottom line. If we do the first two things right, the second two things will happen.”
For Stonebridge Companies’ acquisition of Real Hospitality Group, Rob Smith, president of Stonebridge Companies, noted the importance of taking care of its team during the transition. “While harnessing the combined talent pools, these moves have created a best-in-class team to support our properties.”
PM Hotel Group President Joseph Bojanowski also emphasized the importance of ensuring employee satisfaction during its merger with Sightline Hospitality. “There were roughly one thousand associates that we brought across, some in the hotel and some above the hotel,” he said. “Hospitality is all about our associates, and our associates being happy in the workplace and thriving and taking care of our guests in a way that drives value for everyone.”
