Home Hotel management Terrapin Hospitality aims for efficiency

Terrapin Hospitality aims for efficiency

3
0

ATLANTA — September from Terrapin Hospitality acquisition of K Partners came at the start of a wave of mergers and acquisitions of third-party hotel management companies that shows no signs of abating.

Terrapin Founder and CEO Tony Sherman said he was pleased the deal had materialized as doubling the company’s portfolio put it in a good position for optimal scale and effective management at this stage of the hosting cycle.

“I like to think of us as the size of a goldilocks,” he said in a video interview with Hotel News Now during the Hunter Hotel Investment Conference. “When you’re very small, you can’t take over more than one or two properties at a time. …and if you’re very tall, that has its own inherent problems.

Terrapin recently added 17 additional management contracts to its portfolio in mid-March, and Sherman said the company’s current size, at 85 hotels and 9,765 rooms, is optimal “so that we can really effectively manage many hotels for different owners in different markets. .”

The company’s third-party management footprint spans from California to Florida, and the portfolio includes limited and full-service hotels from brands including Marriott International, Hilton, Wyndham Hotels & Resorts, BWH Hotel Group, IHG Hotels & Resorts and Choice Hotels International.

In 2021, Terrapin got a major injection of investment when Waramaug Hospitality founders Paul Nussbaum and Leslie Ng became investors, and in early 2021 Terrapin acquired a portfolio of five hotels from Waramaug.

Throughout the company’s history, strong brand relationships have been an advantage, Sherman said. He called the brands “helpful and really awesome,” adding that “if we lost access to Marriott or Hilton, real estate revenue would drop like it has during COVID.”

Going forward, Sherman will focus on building on the momentum of his strong year.

“Finding owners who might not be happy with their current management company or owners new to the business who need a management company, or investors who are not managing and buying properties” is the top priority of Sherman to expand the company’s third-party management business. .

The purchase of hotels is also part of the strategy.

“I started out as an investor, and I think that’s why I’m a good third-party manager because I think like an owner; I own it,” Sherman said.

Most recently, Terrapin Hospitality purchased the Denver Hotel in Glenwood Springs, Colo., in November for $15 million and the Glenwood Springs Hotel for $9 million, according to CoStar data.

And finally, more business acquisitions are another path to growth, he said.

“There are smaller management companies that we talk to where the owner does everything himself and is just kind of fed up,” he said. “And I can tell them, ‘Why don’t you join us? You can be an executive. We have an accounting department and an HR department and an e-commerce department; you don’t have to do that stuff.

For more from Terrapin Hospitality’s Tony Sherman, including how the company is addressing labor issues, watch the video above.

Back to Hotel News Now homepage.