According to Paul Sacco, chief growth and development officer, PM Hotel Group, the strategy of the privately owned third-party management company moving forward is to keep on keeping on. While speaking with LODGING at the Hunter Hotel Investment Conference, he explained that this approach means sticking with what’s been working for them, especially since they switched to a third-party management platform.
While the company, which is celebrating its 35th anniversary this year, began as a smaller owner-operator, Sacco claimed that it is now at more than 90 percent third-party operation and the 15th-largest independent hotel management company in the United States.
PM Hotel Group’s Growth
PM’s independence, he said, has enabled the company to be nimble in making and implementing decisions and to therefore thrive in the competitive third-party management environment. “We can grow the way we think is sensible. We don’t have to be at a certain number of hotels; we can just do good deals and grow in a smart way, one that leverages our talent to operate hotels where we think we can do really well.”
This approach, he explained, is reflected in their relationships with team members, owners, and partners; technology adoption; and the ability to identify and take advantage of market trends, such as adventure travel. Describing the structure of the company now, Sacco said, PM operates properties for large private equity firms, including what he called their “ownership affiliate” The Buccini Pollin Group (BPG), as well as Starwood Capital, REITS, and smaller regional owners.
Observing that RevPar growth “may not be at its greatest,” Sacco said that PM includes in its bag of tricks an operational analytics team that works closely with its revenue and commercial team to develop best practices across its portfolio. With this environment in mind, Sacco highlighted how artificial intelligence is a useful tool— “but not the only tool”— in all areas of their business.
The Impact of AI
In considering deals, he contended, AI is most helpful for initial market research. “We are deep into CoStar and other formats for this. It’s great for a first look as you’re entering a market to quickly gain an understanding of what’s happening from a supply, demand, and location perspective.”
According to Sacco, AI is also a valuable shortcut to understanding how and why people are booking travel. “Now that they’re using things like ChatGPT and Gemini to book travel, we need to make sure our hotels come up on those searches. We need to know how to turn that information into reservations and understand what guests are looking for, which can in turn help determine what we offer at our hotels as well.”
From a labor perspective, Sacco stated that he expects AI-provided data around booking, check-in, and checkout patterns to prove useful for the assessment of staffing needs and therefore scheduling efficiently. Regarding labor, Sacco said, “it’s been a challenge for years,” but he maintained, “We’ve been really good at retention,” through the efforts of its corporate office, which is called the support center. “One of our foundations really is our people and culture; we constantly have practices in place to educate and engage with employees. They feel good about where they work.”
Sacco also declared that the company’s own growth is good for its employees. “They know their company is looking out for them, looking to help their career. It helps that we are now 80 or 90 hotels, depending on activity in pipeline development, so we have more opportunities across the nation for our employees.”
Momentum for the Future
While PM is now about one-third full-service hotels and another third upscale select-service, Sacco said, it is its lifestyle division, Modus by PM, that has seized upon what he called the most reliable source of demand since the pandemic, that is, luxury, lifestyle, and adventure travel. “Modus is our boutique and independent operating division. We have a couple of Evo hotels, which are adventure-based hotels, and we’re running a Field and Stream in Bozeman; we’ll also be opening up glamping tents in San Luis Obispo.”
Sacco repeatedly stressed that it is PM’s independence that gives them the freedom to seize opportunities. “It’s been exciting to be at the forefront of that exploding trend.”
