|Paramount Hotel Group has ownership in the Residence Inn Princeton at Carnegie Center in Princeton, N.J.|
FAIRFIELD, N.J.–Paramount Hotel Group, the independent hotel management and ownership company founded in 1999, hired former La Quinta executive Steve Wilson to lead the company’s new strategy of growing its third-party management business.
With a goal to add 8-12 third-party hotel management contracts in the next year and a half, Wilson joins the company as VP of development, charged with growing a new side of Paramount, whose management portfolio until now involved mostly hotel properties the company had ownership interest in.
“Due to the substantial upswing in distressed property sales this year, we see significant demand for third-party operators who can turn these properties around and create new value for investors,” said David Simon, CEO of Paramount.
Simon told Hotel Management the time is right to focus on third-party management.
“We started looking around and saw lenders were taking back properties or they were going to take them back through foreclosure, and we saw a lot of small management companies become managers for third-party owners,” Simon said. “The economy obviously got worse and worse, banks started taking back more hotels, and they needed professional management.”
Currently Paramount has eight properties in its portfolio and has ownership interest in six. In 2007 the company had 35 properties, but sold the majority as pricing got frothy, Simon said.
Wilson said Paramount’s target clients include branded and independent properties along the East Coast, where the company already does business. He anticipates many will fall into the category of franchised select-service 60- to 150-room properties, which have been operating by GMs hired by an owner-operator who isn’t involved in day-to-day management.
“I have had many conversations dealing with properties or owners that have grown from that one- to two- property portfolio to 7-8 hotels, and they’re feeling daily operating pressures,” Wilson said. “We’re the kind of company that can step in and do what they need.”
Other owners Paramount is in conversations with are having trouble maintaining franchise agreement standards, so they’re looking for third-party managers to help, Wilson said.
“ I am talking with folks that have become troubled franchisees,” he said. “For whatever reason—maybe it’s [quality assurance], or whether to complete a [property-improvement plan], or falling into default on paying franchise fees. Many times [they are required to retain] a professional third-party management company.”
“These are people who have had very good relationships with their franchise companies,” he said. “They would like to be able to take advantage of all the services available through their franchise, but it’s troublesome when every conversation is about a cure for default. This really is a smart approach for the smart default owner, who wants to make sure the relationship [with the franchise] stays strong.”
Wilson and Simon said Paramount’s advantage include its focus on sales and marketing, with a strong emphasis on revenue management.
Prior to joining Paramount Hotel Group, Wilson was vice president of franchise development for LaQuinta Inns & Suites. Previously, he was director of development for U.S. Franchise Systems. He began his career in operations with the Sterling Group.