NEW YORK—The way Paul Sacco sees it, a hotel operating platform that can handle 60 hotels can be comfortable adding significantly more properties to its portfolio, so that’s what the new leader of TPG Hotels & Resorts aims to accomplish.
Sacco was promoted to president and chief development officer of the company in April. During a break at the recent NYU International Hospitality Industry Investment Conference, Sacco said while there’s no target number of hotels for TPG’s portfolio, his job includes increasing its presence across the U.S.
“Being around 60 hotels, the infrastructure becomes such that you have your operating platform set up in a way that it can very effectively take on new hotels,” Sacco said. “Our goal is to just keep adding really good hotels … being as large as we are today and having established the infrastructure we have in place today, I wouldn’t say that there’s a magic number. We’ll continue to grow and probably grow at a faster pace than we have attrition.”
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Paul Sacco, TPG |
Sacco joined the Cranston, Rhode Island-based company in 2013, and his promotion occurred simultaneously with renaming of The Procaccianti Group’s hotel division to TPG. Sacco’s unique dual title provides him the opportunity to lead the company from visible, strategic and operational perspectives as president while continuing to focus on the portfolio growth.
“The key for us is that as an operating company we see things through the owner’s lens,” Sacco said.
Parent company Procaccianti Companies traces its history to 1958. It’s been in the branded hotel business for more than 30 years and currently manages hotels from most major brand companies. The company has evolved into more of a third-party operating company during the past five years, according to Sacco.
“We have sliver equity or straight third party,” he said. “How we grew has really created a culture at the company where we’re strong stewards of the assets and we see things from an owner’s perspective.”
Owning and operating both play an important role in the company’s future, Sacco said.
“We’ll invest in a hotel because we like the hotel, because we like the deal,” he said. “There are certain models where the capital partner wants to have an investment in the hotel as well. … We have the resources to be able to do that.”
Balanced growth in past and future
The company built its portfolio primarily with full-service hotels with 200 to 400 guestrooms, but has branched out in recent years.
“Over the last several years, we’ve also evolved into the lifestyle space with some of our hotels as well as further into the select-service space, largely in urban areas because that’s certainly become a terrific, preferable model,” Sacco said.
He cited what he called “some great brands” in the select-service space, which do well in transient markets that have great amenities outside the hotel. That translates into what he calls “an efficient model” with select service.
That doesn’t mean the company has abandoned the full-service segment.
“The full-service suburban hotels, they’re not going away,” Sacco said. “In the right markets they can be positioned appropriately to be successful hotels.”
He cited TPG’s Boston Marriott Newton and Hilton Boston-Dedham, both located in the Boston area, as examples of the success TPG has had in that segment.
Overall, TPG’s portfolio includes 60 hotels comprising 17,000 guestrooms and representing $840 million in hotel revenue, according to Sacco. The company has approximately 10,000 employees located in 25 states.
“We are focused on growing wherever we think there are hotels where we can actually be effective, whether it’s east or west or central,” Sacco said. “The West Coast is an area where we’ve put a lot of focus lately.”
A lifelong hotelier
Sacco started his career on the operational side of the business as his father, Paul J. Sacco, is a lifelong hotelier. He currently is president and CEO of the Massachusetts Lodging Association.
“I kind of grew up living in hotels, and working in hotels in high school, and it was just a natural career course for me,” Sacco said. “So having worked in global sales and on property and doing a lot of franchise development under Michael Levin at U.S. Franchise Systems, it really taught me about all different facets of the business.”
That education includes some aspects of leadership that he said he wants to tap into in his first opportunity as a company president.
“The best leaders, the people that I’ve worked for that have helped me improve, have operated in a manner where they allow the best in an individual to come out,” Sacco said. “They’re not trying to force something out of someone. They’re willing to take what someone’s natural skills are and instill confidence in that person to let those skills evolve.”
Remaining composed in day-to-day functions as well as during long-term situations such as preparing for the downturn, is also an important leadership trait, he said.
Sacco’s past positions include SVP of development roles for Pyramid Hotel Group and Starwood Hotels & Resorts Worldwide. During Sacco’s nine-year tenure at Starwood, the company’s North American portfolio grew to more than 550 hotels from 228 properties. Sacco also was instrumental in launching the Aloft Hotels and Element by Westin brands.