A Hotel Recipe for Success

BOSTON—Pyramid Hotel Group is ranked in the top three by revenue among independent hotel management companies. The company manages 80 hotels and 25,000 guest rooms. It is a co-investor/partner that works with investors to educate on each investment and has a reputation of being thorough with no closing surprises.

This strategy seems to have worked, with half of Pyramid's management contract business that of a repeat nature. In addition, a great many of its clients have been with Pyramid through several cycles. In a recent interview with John Hamilton, SVP of acquisitions with Pyramid Hotel Group, the key points of the company's acquisitions and business development strategy were discussed.  

GlobeSt.com: Tell us a little more about how Pyramid approaches an investment. 

John Hamilton: By using a variety of benchmarks to evaluate investments, Pyramid has been able to grow its portfolio through a highly effective business development group to evaluate acquisition criteria and management opportunities. When evaluating three- to five-star properties—primarily in the top 25 travel markets—we consider trends in population, airports, key demand generators, business environment and new supply dynamics in key markets.

GlobeSt.com: What is Pyramid's business development strategy and what brands do you gravitate toward?

Hamilton: In terms of business development strategies, the majority of our projects are acquisitions and the remaining 25% are new developments. Some of our most common brand companies we work with include Marriott, Hilton, Starwood and Hyatt, and we have over 20 independent or soft-branded hotels and resorts.

GlobeSt.com: What role does technology play in your investment operations?

Hamilton: Pyramid has the latest technology, including an extensive operating database, key performance indicators from similar properties Pyramid manages, real-time financing terms and financial modeling from lender quotes, and an extensive database of financials from properties and markets not managed by Pyramid. In addition, we have current market and competitive property knowledge most commonly in those top 25 travel markets where there is more consistent growth and barriers to entry. And finally, we are an avid trend follower, particularly in the areas of e-commerce, yield management and social media.

GlobeSt.com: What sets Pyramid apart from other hotel investors?

Hamilton: Pyramid is passionate about the business and is proud of the talented professionals in our organization. Pyramid has a reputation for hiring the best and brightest out of top-notch hotel and business schools, along with providing extensive training and on-property experience. Each of our analysts participates in multiple transition task forces, which provides invaluable insight into operations. We review projections and assumptions at every level in the organization up to the chief operating officer. In addition, our senior executives provide operating, revenue management, e-commerce, branding and positioning strategy. We use best practices learned throughout our history of transitioning properties and through our involvement with the brands for which we have been asset manager. And we have a project management department that provides detailed PIP evaluations, costing and negotiation to establish accurate capital requirements.