WILLEMSTAD, Curaçao — The Caribbean region has seen an evolution in hotel management over the years, and it's the third-party operators' game to lose.
Speaking on the topic at the 2025 Caribbean Hotel Investment Conference & Operations Summit, a panel of third-party hotel operators said that while historically brands have dominated hotel management in the region, that's not the case any more.
Michael Register, partner at Hotel Equities, said brand leadership have said on record that they'll move away from managing hotels and stick to distribution and loyalty programs, which is what they do best.
"Brands are starting to encourage third-party managers to become more and more active. I think this region [has] been very underserved by professional management for years," he said, explaining that brands had to get into management in the region out of necessity.
He added as brands recede from management in the region and owners decide they are better off focusing on development, "you're going to see a lot of movement. A lot of changes and opportunities for third-party management are going to be tremendous over the next five to 10 years in this region."
Tide shift
Navigating hotel management in the Caribbean is different from the system that's in place in America for owners, operators and brands. Brands have had a big presence for hotel management in the region, but now that this has evolved, there's a change in the dynamic between the three parties.
"I think the relationship with the brands is much more closer today than what it used to be," said Marco Selva, senior vice president of Stonebridge, adding that it's now more of a partnership. "As a matter of fact, brands very often come to us as third-party operators and are saying, 'we have an asset here in this place that we think you guys could probably do better than we can.'"
U.S.-based hotel operators growing in the Caribbean — such as Hotel Equities, which launched its CALA division earlier this year — have to approach the region a little differently.
"What we've discovered over the years that we've been involved in the business is that you really need to sell like an American, but manage like a local," Register said. "You just can't impose the systems and processes and procedures that you have with the North American companies in different island nations or different countries in the region. It just doesn't work."
Finding that balanced approach to the business is key, as is communicating what a third-party hotel manager brings to the table and differentiating between what the brands have to offer.
Patricio del Portillo, senior vice president of LATAM development at Aimbridge Hospitality, said he believes that a non-brand operator is more aligned with an owner's goals of generating a profit.
"As a third-party management operation, I can tell that the biggest difference with the brands is that the brand is more interested in putting flags on the map, and us, as a third-party management company, we were more interested in the profitability of the investor," he said.
Keith Oltchick, chief development officer at Remington Hospitality, agreed with Portillo, saying that a third-party operator should be a partner with the owner, working in step with them and sharing motivations.
"If you look at third party versus brand management, there's a lot more flexibility in the contracts than there would be if one of the big brands is managing for you," he added.
When it comes to contracts, the hotel management company executives all agreed that when it comes to the timeline for hiring an operator for a new construction, the sooner the better. They also agreed that they prefer longer contracts — five to 10 years. Or, as Register said, if owners want to sign on with an operator for the same 15- or 20-year deal they have with a brand, that works too.
Regardless, third-party operators cannot go in with a one-size-fits-all approach, Portillo said.
"The first thing that you need to understand is that each negotiation with each owner is completely different," he said. "I mean, every time you sit with an owner here in the region is just like starting all over again. And the first thing that you need to you need to do is to figure out what their motivation is, because otherwise you're going to start [talking] terms and conditions that probably is not going to address what they're looking for."
Niche down, hire locally
As third-party management continues to grow in the Caribbean region, hoteliers face three big island-related challenges: lengthy development timelines, hiring and procurement. While construction and procurement will always be a challenge for island resorts, certain hiring strategies can improve human resource obstacles.
"We realized very early on that you can't manage in every country or island the same way that you've tried" in the U.S., said Oltchick. "I think it starts with understanding the local culture first to understand the employees and what's important to them, and then trying to integrate them into your company."
Selva said he thinks its a mistake to "convince someone" to move to work somewhere. It doesn't work in the long run, and he recommended "to recruit locally, or at least someone that understands the demographics of the market really well, and to train locally, to develop so they can eventually take over."
The operators also pointed out that with the brands stepping aside on management, there's going to be more competition in the region for third parties — for hiring and securing hotel contracts. One thing operators can do is find their niche, Portillo said.
"We're going to focus on the niche," he said. "For example, I can tell you that we're going to stay away from limited service, and probably there's going to be another third-party management company that is going to be focused on small boutique hotels."
When a lot of third parties entered the Caribbean's hospitality management space, they took whatever business they could. Now, they are being more strategic.
"I think there's tremendous growth and tremendous opportunity for third party companies ... because we're only going to get better at what we do right under this competition," Selva said.