Not all management companies are created equally. That’s the message that Paramount Hotel Group wants to send to the rest of the industry as the company looks to expand its third-party management portfolio.
Ethan Kramer, Co-founder and President, Paramount Hotel Group, recently outlined the company’s blueprint for growth.
“We’re making a concerted effort to increase our third-party portfolio. To grow in this market just by finding acquisitions is difficult, there is so much capital out there competing [for deals]. We still think there are opportunities to find on the acquisition side, but we do a really good job of management so we want to expand that on the third-party side,” he said.
The Fairfield, NJ-based company currently has 12 hotels in its portfolio, the majority of which are select-service, major branded properties. In addition, Kramer noted the company has a few properties in various phases of development. Prior to the most recent recession roughly a decade ago, Paramount had more than 30 properties before selling all but 6 hotels. As it looks to build the portfolio back up, Kramer noted the company is equipped to take on the operations for anything from a 100-room select-service hotel to 500-room full-service properties.
In April the company brought David Hale on board as vp, business development. Hale was most recently with Spire Hospitality and has more than 24 years of hospitality experience, which includes a tenure with Hilton. Hale’s been charged with leading the company’s effort to expand third-party management agreements.
“Bringing David on is key, he’s got good connections and he knows the business. He can sell what we do well; what sets us apart,” said Kramer, who also touted his operations background.
Kramer elaborated on what he believes sets the company apart.
“We do think there are differences in management companies, differences in reporting to owners and communicating with owners and performance,” he said, emphasizing the company’s strong corporate team and experienced revenue management and sales teams.
Kramer continued, “We treat every property as if it was owned, that’s our mentality, that’s where we came from. That’s where our growth is. We have close relationships with our owners because we’re very strong on owner communication. We know what owners want to see and we provide it to them. We don’t like surprises and we don’t like to give surprises.”
Paramount added a couple of properties to its portfolio this past May with the Hotel Indigo Newark Downtown and the Courtyard by Marriott Columbus West. In addition, Kramer noted there are a couple of properties under construction as well, including a Tru by Hilton in Middletown, NY, and a Marriott-branded extended-stay property in Westchester, NY.
Paramount Hotel Group has three subsidiaries, including Paramount Management Associates, Hospitality CPM and Book My Group, a national sales organization that specializes in hospitality group reservations.
Kramer extolled the benefits of Hospitality CPM—a construction project management firm specializing in asset management of hotel renovations, repositioning and new hotel construction projects—particularly as it relates to taking on new projects.
“It’s a great asset for us when you have a construction expert that can tell you what the real numbers are on an acquisition. Whether we like it or not, we know what the real cost is. That’s a benefit to us and to our clients,” he said.
Kramer noted the company’s capital partners are made up of institutional equity, private equity, and high net-worth individuals. He further pointed out that while the company is looking primarily for third-party deals, it would be willing to consider sliver equity in the right deals.
Kramer—who has served as President since the company’s inception in 1999— remains bullish in general on the overall health of the industry going forward. “Supply is the most important metric. Other than the economy not falling completely apart, if we keep supply in check as a whole we’re not going to see a lot of dips or a significant valley in the hotel business,” he said.