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Taking Center Stage: Third-Party Hotel Operators in the Spotlight

09.01.2023

Third-party management companies (TPMCs) are emerging as key players in the ever-evolving hospitality landscape. Major lodging companies like Marriott, Hilton, and Hyatt increasingly favor asset-light strategies centered on franchising. This shift has created opportunities for TPMCs, which excel at overseeing properties, hiring and firing, and focusing on the bottom line – profitability.

TPMCs offer distinct advantages such as flexibility, diverse brand knowledge, and adaptable contract terms, which many investors prefer since it allows them to sell their hotels unencumbered by the management contract, which could produce a higher sales price. During the pandemic, the nimbleness of TPMCs was especially evident.

The choice between a brand and a TPMC depends on various factors, including market access and personal preferences. TPMCs bring a wealth of resources and capabilities to the table, making them invaluable partners for owners navigating the dynamic hospitality industry.

Maybe the biggest reason owners choose a TPMC is flexibility, according to Richard Jones, COO for Atlanta-based HVMG. Although the company’s managed properties have to maintain brand standards, that flexibility, he argued, “brings a lot of value.”