ATLANTA — In the vast neighborhood that makes up the U.S. hotel industry, everyone is dealing with the same market fundamentals. The approach to investments can vary depending on where the money is coming from.
Hotel executives speaking at the "Wall Street talks" and "Main Street talks" panels at the recent 2026 Hunter Conference discussed how economic factors have affected the hospitality business from their perspectives.
Mitch Patel, CEO and founder of Vision Hospitality Group, said the big investment companies tend to take a macroeconomic approach whereas smaller management and development companies pay closer attention to the minutiae of the hospitality business.
There's perhaps no greater example of this than their approaches to labor in the current lodging and macroeconomic environment.
Both factions view labor as a challenge in today's environment, but the operators see an opportunity to drive extra profits through training its staff whereas the private equity firms see the rising costs as a chance to address efficiencies across all cost centers.
"My friends that are Wall Street, they often forget that this is a people business," Mitch Patel said. "What's your culture look like in your organization, your associate engagement, your guest satisfaction?"
Vision Hospitality Group, based in Chattanooga, Tennessee, has 44 hotels open in its current portfolio, with seven under development.
The difference between a 4.8-star rating and a 4-star rating online can affect how much demand comes through a particular hotel's doors, he said.
Bo Patel, chief operating officer at Coury Hospitality, said he's heard countless times from Wall Street executives that they don't care about guest satisfaction scores. But the hotels that prioritize keeping those scores elevated bring in more demand.
"In our business, [the guest satisfaction score] gets lost very quickly, because you think the customer is just going to come. The customer is becoming smarter every day," he said.
Coury is an ownership and third-party management company based in Dallas.
Mitch Patel said the world is more transparent than ever when it comes to these online ratings, so keeping hotel teams engaged and motivated can really make a difference.
"It's just so critical that you get that piece right and take care of your team," he said.
Private equity companies also have labor considerations, but more so on the cost side.
"Operating fundamentals still have — especially in urban markets — a ways to go," said Karim Alibhai, founder and principal of Gencom, on the "Wall Street talks" panel. "Labor costs are definitely not easy to deal with."
Gencom owns and develops mostly luxury hotels and resorts and recently acquired the Ritz-Carlton New York, Central Park.
Scott Trebilco, senior managing director at Blackstone, said the company is focused on its profit-and-loss statements and what it can control. It can be complicated given brand standards and third-party management companies also being in the mix, but new technologies have a chance to revolutionize the business where Blackstone has full control as a hotel owner.
Technology such as artificial intelligence can help productivity on the back end with housekeeping and maintenance as well as front-end uses for invoice processing, he said.
"There's an enormous opportunity for enterprise transformation within the processes," Trebilco said. "When you wake up 12 months from now, you'll actually see it, and people will have actually adopted it."
The cost to build in New York City coupled with the cost of labor at union hotels makes it difficult to find profitability, Alibhai said.
Approach to industry investment
When Wall Street zigs, Main Street zags, Mitch Patel said. When the going gets tough in the hotel industry, some real estate companies stray away from any investments until performance improves. Hotel development companies, on the other hand, dig in and rely on the cyclical fundamentals.
"In 2010, I remember we were just coming out of the Great Recession, and there were so many people that were just putting their heads in the sand and said they want to get out of this business. Forget growth, they want to get out," he said. "We had about eight, nine hotels at this time, and we developed 14 hotels from 2011 to '14. Those are some of our best hotels in our portfolio today."
Case in point: Blackstone's Trebilco said his job is to invest in the best possible investment return deals, and right now, that's in data centers.
This has opened the door for hotel-focused private equity firms to be more aggressive in their deal-making, however.
Mit Shah, CEO of Noble Investment Group, said some of Noble's best investment years were in 2014 and 2015, which was around six to seven years removed from the Great Recession. Considering the timing of the COVID-19 pandemic, this could be the start of another pickup in the cycle.
Shah said Noble has felt the "migration of opportunities" from real estate companies such as Blackstone turning its focus to other types of properties. Noble has been active in the acquisition of hotel portfolios rather than single-asset deals. He said "given the noise of last year," Noble had less competition on these acquisitions than in the past.
One of the main differences between Wall Street and Main Street is the latter has more "patient capital" in projects, Mitch Patel said. Developers take a longer-term approach in their philosophy, looking at how the investment will pay off years down the line rather than in the immediate future.
"We're looking at these deals very differently. We're not going in and then have pressure to get out at a certain time period," he said.
Wall Street's job is to assess the risk in the business, and there is a fair amount of it, Ark Holdings CEO Azim Saju said. But Main Street companies exude the entrepreneurial spirit to bet on themselves when it comes to making deals despite the risks involved.
"If there was no risk, there would be no rewards. So you've got to take the risk," he said. "The risk has to be calculated, but you got to take your swings and then bet on yourself as an entrepreneur to figure it out."