NEW YORK—There are a lot of factors that can get in the way of doing well as a third-party manager in the hotel industry right now.
The labor market is tight and getting tighter. A contraction in deals is leaving operators with fewer opportunities to win management contracts. But those factors aren’t enough to stop Crestline Hotels & Resorts en route to a strong 2018, said President and CEO James Carroll.
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Speaking with Hotel News Now during the recent NYU International Hospitality Industry Investment Conference, Carroll said the establishment of a $300-million fund to acquire and invest in hotels will help spur further growth but will ultimately be a supplement to the company’s primary focus on management.
“What we’re trying to do is find ways to continue growing the company,” he said. “In the past, we’ve grown the company by simply negotiating good third-party contracts.”
But he noted the company has a history of being creative in order to procure strong management deals with good properties.
“We’ve gone out and sourced good deals for the owners we had and grown the business that way,” Carroll said. “We’ve partnered with real estate companies. We’ve also in the past owned real estate ourselves for the purpose of renovating, cleaning up or stabilizing the performance of an asset then selling that to an ownership group we work with to secure a good solid management agreement.”
He said he’s open to using the $300-million fund in any way that will lead to strong management deals.
“If that means sliver equity deals or long-term leases, which is something our partners or competitors don’t do, we’ll use that capital as a source of a guarantee,” he said.
For more from Carroll on Crestline’s recent growth and outlook for further expansion, watch the video below.