With its acquisition of Marshall Hotels & Resorts just over two years ago, TPG Hotels & Resorts entered a new era. A host of subsequent moves and ongoing initiatives demonstrate that the longtime owner/operator is clearly “leaning in” to the changes that are designed to take it to the next level.
A recently launched division for independent and lifestyle hotels, a new operational hub in Dallas, and several key personnel additions are among the highlights for TPG since the Marshall merger and acquisition in early 2022. That deal brought some 70 third-party management properties to the company’s portfolio, which now stands at roughly 130 hotels.
President/COO Ben Perelmuter—who joined TPG Hotels & Resorts last March—touted future growth for the management arm of Procaccianti Companies, a real estate investment and services firm. Describing the family-run company as an “entrepreneurial organization,” Perelmuter elaborated on his first year at the helm of the company and some key areas of focus.
“We’ve spent a lot of time in the last year focusing on process, people enhancements, and communications, and I thought we did a really good job. We brought in a lot of people that have a wealth of background in the hospitality space and have had proven successes,” he said, later adding, “I would rate my first year as president as electric, exciting, and fun.” Perelmuter offered his assessment of the current third-party management landscape, as well as his formula for success.
“It’s focused on operations, and the winners in this very competitive space right now are going to be those that are able to really balance the employee satisfaction component and create a really good, trusted environment for growth. So, getting that employee piece is huge. You must also be able to demonstrate effective cost mitigation and creative cost mitigation and be able to execute in the market with the brands and the bottom line. Those are the companies that will succeed.”
2023 Performance
That success is measured largely through the performance of its portfolio. According to Perelmuter, in aggregate the company grew market share last year and has positive momentum going into Q1 in most markets and segments.
Meanwhile, the company netted some 15 additional hotels in total last year, including three upscale independent boutique properties in Buffalo, New York. Those properties include The Richardson Hotel, The Roycraft Inn, and The Mansion on Delaware, all of which will be part of the Intera Collection (see sidebar on page 38).
Perelmuter said he expects unit growth to be similar in 2024. He added the company has the benefit of parent company Procaccianti Companies, and through its finance company Smith Hill Capital’s relationship with Bain Capital, TPG can leverage a $1 billion private lending platform it created to serve the hotel sector.
However, while he acknowledged that he’d be “lying” if he said the company isn’t concerned with growth, Perelmuter emphasized that it’s not necessarily the driving force behind its efforts.
“We’re really more about value creation. Where can we add value to owners? Where is it a good match for both of us? So, the conversations that I have on a regular basis here—when I talk to my team, when I talk to the owners—it’s not a daily conversation about growth. It’s about, is this the right fit for us? Are we the right fit for you? And, of course, we want that to result in net unit growth and net revenue growth,” he said.
Thinking Like Owners
Because TPG owns 38 of the assets within its portfolio—which dates back to the early 1980s—the operator brings a valuable perspective, according to Perelmuter.
“On a regular basis, we think like owners. So, when you compare that to other organizations that don’t really see it from the owner lens on a regular basis, I think that we’re set up more for success. We are regularly having those communications with our owners,” he said. Of course, a key issue for any operator these days is the deployment of technology and how it will impact both the guest experience and the bottom line. Perelmuter pointed out that the company will never be focused on “the new and shiny penny,” but rather technology that is user-friendly for properties.
“At end of the day, it’s about getting out in front of customers and making a great impression on the arrival experience. Having a clean hotel and engaging employees is the grassroots of the industry. You can’t try and automate all of that. You can do certain things, and we have and will continue to do those things, but you just can never take away what the industry is actually about. So that is why we do focus a lot on basics here and getting basics executed at a very, very high level. Then we try to use the right technology to help the managers get their jobs done more efficiently,” he said.
Cost-Control Focus
When describing TPG’s operational culture, Perelmuter emphasized there has been a deep focus on “cost mitigation,” while adding he hasn’t had to change much from that standpoint. “There are lots of people that have been here for a very long time that are just absolutely fantastic at what they do. I was fortunate enough to walk into a situation where there was a really good culture, pride, and tenure,” he said, adding the Marshall merger brought in some associates “who maybe do things a little differently.”
Finally, Perelmuter is no stranger to merger and acquisition activity, both large and small, having served as division president at Aimbridge Hospitality. He oversaw a host of acquisitions during his tenure there. He acknowledged that has helped him in his current role. “I’ve seen enough to know what goes right and what goes wrong. I feel like that has allowed me in my first year to come in with some thoughts and execute really quickly, without falling,” he said.
New Operational Hub: TPG Opens Headquarters in Greater Dallas
TPG Hotels & Resorts continues to forge a new identity, opening a new headquarters to serve as its operational hub in the greater Dallas area—a location President/COO Ben Perelmuter characterizes as a “hospitality mecca.”
At press time, the company had just opened its national operations headquarters within the District 121 mixed-use community located in the Dallas suburb of McKinney, Texas. TPG’s offices will be on the fifth floor of the eight-story, 190,000-square-foot iconic office tower. The office tower location features direct access to the 121 Dallas North Tollway and easy access to DFW Airport as well.
“Greater Dallas has quickly become the nation’s hub for leading hospitality management firms, and it is exactly where TPG Hotels & Resorts belongs. The strategic decision to centralize our operations platform in Dallas, specifically McKinney, was based on multiple factors that position us as the premier hospitality management firm in the industry,” said Perelmuter. “Dallas is an ideal location with its deep pool of hospitality talent and ideal central-U.S. location, making travel easy and efficient for clients, brands, partners, and staff.” Perelmuter added, “You’ve got a lot of reasons to go there if you’re an investor.”
While McKinney will be the new home of TPG’s operational division, Procaccianti Companies, the firm’s parent organization, will maintain its corporate headquarters in Cranston, Rhode Island.
