Third-party hotel operators are taking advantage of a hospitality industry increasingly looking for their services, but with these new opportunities comes their own set of challenges.
In a recent podcast interview with CoStar News Hotels, Paul Sacco, chief growth and development officer at PM Hotel Group, said there’s been a proliferation of third-party operators in the industry, but there’s also been a lot of consolidation among companies.
PM Hotel Group itself merged with Sightline Hospitality in late 2024.
Some of PM Hotel Group's competitors in the hotel management space have grown to such a degree that they’re a different business, he said.
“They’re not necessarily able to be as nimble as we are in some areas, and that really resonates with owners today,” he said.
Hotel owners are going through an interesting time in the cycle, he said. They’re generally looking for an operating partner who has an accessible C-suite because that helps resolve problems and also creates a level of transparency. They also want discipline around costs, the ability to drive top line as well as flow-through and profitability.
“Owners appreciate that on existing properties someone who is really going to tell them what the situation is but also someone who is insightful and forward-thinking enough to create solutions as well,” he said. “So, it’s pointing out the realities but also coming up with great guidance and implementation of solutions to those issues.”
The U.S. hotel transaction market is in transition with a massive reset in pricing, Sacco said. The fundamentals suggest potentially strong growth but there’s still a question mark with a lot of the current geopolitical concerns, among other factors, that have people playing a bit more cautiously.
There may be more hotel transactions coming in 2026 and the following years, but in the meantime, operators looking to hold on to their management agreements as a deal goes through should do what they can to be the best steward of that property, he said. They can’t control the buyer’s circumstances, but they can control their own.
“What you can do is just do the absolute best that you can at understanding the existing owner’s needs and the existing asset needs, and then also understanding what their sale goal is,” he said.
For more from the interview with PM Hotel Group’s Paul Sacco, listen to the podcast interview embedded above.