Why Aimbridge’s founder is optimistic about the company’s recent changes

Editor’s note: Read Part 1 of this interview with Dave Johnson, where he talked about his Horizon Capital Partner’s big Margaritaville project, his other developments and where he sees future growth.

McKINNEY, Texas – When asked about all the recent changes at Plano, Texas-based Aimbridge Hospitality, the company he founded in 2003, Dave Johnson, still a major shareholder, acknowledges that some changes were needed. He likes the recent changes the company has made, especially naming former Choice Hotels CEO Steve Joyce as executive chairman of its board.

“I’m hoping for the best like everybody else, and I think there needed to be some changes,” Johnson said. “[I like] making Steve Joyce the executive chairman. Steve has been a friend and colleague for many years, and he’s a hotel guy. So, to bring in a hotel guy, I give them a lot of credit.”

In the management company world, I think the big will keep getting bigger. You’ll always have niche players, but it’s tough to be small and really be significant and profitable in both areas.

Dave Johnson

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In November, Aimbridge announced that CEO Mike Deitemeyer and CFO Thomas Song were stepping down. In February, the company named long-time Marriott executive Craig Smith as its new CEO. It also announced plans to split into two operating divisions, create an owner relations team and redeploy above-property operations by geographies.

Johnson said Aimbridge manages several of his company’s hospitality assets and is a big cheerleader for the company’s direction.

“I think [Joyce] is going to bring a perspective to the boardroom that has been needed since I left a couple of years ago,” he said.

Believer in scale

When asked if its large scale was the problem at Aimbridge, Johnson said that talk comes from the company’s competition.

“You always want to know what your competitors are saying about you,” he said. “In my first 15 years with Aimbridge… you didn’t want to hire Aimbridge because we were too small.

“And then we were outsizing our competitors every which way from Tuesday, right? Our market share was dominant in the industry, and it was all organic growth. Then you didn’t want to hire Aimbridge because we were growing too fast… And now you don’t want to hire Aimbridge because they’re too big.”

Johnson said the bottom line is that owners speak for themselves when choosing Aimbridge.

“That noise was coming from [Aimbridge’s] competitors because you have to say something. I consider it a strong argument as to why it’s good to be big.”

In fact, Johnson remains a big believer in the strength of scale. “Even though it was 20 years ago, and I was one of the new kids on the block for a management company. I said, ‘Nobody has true scale. Nobody’s an institutional quality operator.’”

Johnson also believes that the big brands continue to lose management contracts to third-party operators because the operators are more aligned with owners.

“We don’t work for the brand. We work for the owner,” he said. “When you look at M&A over the next few years, I’m a big believer that brands will continue to consolidate, and the big will get bigger. In the management company world, I think the big will keep getting bigger. You’ll always have niche players, but it’s tough to be small and really be significant and profitable in both areas.”