‘Mid-major’ management company wants to grow into sweet spot

GREENVILLE, South Carolina — Is there a sweet spot for a “mid-major” size third-party hospitality management company? Hospitality America CEO Ben Campbell thinks that number is in the 25 to 40 range.

He said hotels managed by larger companies have approached his company in the past. They tell him they like the company’s resources and procurement power but ultimately feel like a number on a spreadsheet. He said he’s also heard from hotels managed by much smaller companies that don’t have the power of the bigger companies.

Hospitality America has a speciality of managing Hampton Inns in urban cores like the Hampton by Hilton Miami Brickell.

“They see value in us as a mid-major company to be able to play in both fields,” he said. “That’s what I tell a lot of our owners all the time: you can use our expertise but also get your individualized attention. All of our owners can pick up the phone and call me at the drop of a dime, and we will focus on the property.”

Campbell transitioned to the CEO role for Greenville, South Carolina-based Hospitality America after spending the past two years as COO.

Hospitality America currently has a portfolio of 17 hotels, but it will have 19 by the end of the year and 25 by 2025. Ultimately, he wants the company to reach 40 in five years.

Where it wants to grow

Hospitality America currently works with five different ownership groups in Chicago; Washington, D.C.; Greenville, South Carolina; Northwest Arkansas; and Miami. Campbell said in the past, the company has specialized with Hampton Inns in urban settings.

“It really comes down to our development partners. They have a keen eye on how to make a project like that happen in an urban setting,” Campbell said. “Then, for us, it’s execution from an operations standpoint. We’ve been able to help with the site selection and [finding out] what hotel will work and where and why.”

Campbell said Hospitality America is now looking to grow in more tertiary markets (think second or third-tier markets on the rise — the company’s biggest pipeline is now in Northwest Arkansas). He would also like to be in Texas and Ohio. But he isn’t looking at the biggest markets.

We’ve found a niche with owners and new developers who may have been in multifamily or office and are looking at hospitality but haven’t done it before and are looking to get into it. It can be intimidating. We help them through the process.

Ben Campbell

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“We like to play more on the fringe and then ride a market that we think is on the rise,” he said.

Campbell said his company has worked successfully with owners with other real estate experience and now looking for their first hospitality investment.

“We’ve found a niche with owners and new developers who may have been in multifamily or office and are looking at hospitality but haven’t done it before. It can be intimidating,” he said. “We help them through the process. We have it lined out from A to B, even on the acquisition side, and then we’ll do the underwriting.“

Hospitality America was founded in 1995 by its two owners, Bo Aughtry and Chris Cargen, who recently stepped down from the CEO role and assumed the newly created position of board chairman. 

Campbell said Hospitality America will have equity stakes in the hotels they manage, ranging from 1% to 10%.

Attracting smaller fish

Campbell said to mitigate the fact that business travel hasn’t fully returned to 2019 levels, Hospitality America is going after the “smaller fish.”

“We’re going after the small corporations that are traveling. So, we’re not going after the big fish in these markets, the Fortune 500 companies, because much of their travel hasn’t returned,” he said. “Traditionally, in our industry, we would say, ‘If they can’t give us 100 room nights a year, don’t give them a contract.’ We are looking at those companies and asking, ‘Can we build a coalition of these travelers to give us that base to replace the Fortune 500 businesses?’”

Catering to different hotel guests

Campbell says the company’s core hotel guests are transitioning away from baby boomers who were driving corporate business to millennials.

“That’s why we are really leaning into the soft brands, making [the hotel] unique, and looking for brands that can embed into the community. So, it doesn’t seem like it’s your mom and dad’s kind of hotel,” he said.

He also said the company leans on local experts in the markets when finding better F&B options for its hotels.

“We’re not standing up a restaurant or establishing a concept. What we do is find the right fit for the hotel. So, we might find a restaurateur that is local to the community,” he said. “We’re building a demand… We see it as taking risk off the table by bringing in someone who already knows the market's clientele or someone who has experience in entering a new market. We see it as a good play for us to have the hotel side and for them to be able to scale their business on the F&B side.”