Plano, Texas-based hospitality management company Aimbridge Hospitality's acquisition of Dallas-based hotel management, investment and advisory company Prism Hotels & Resorts was not a deal made in haste. Steve Van, president and CEO of Prism, said the project, which was announced in the middle of December, had been in the works for five or six months. “We wanted to make sure that it worked for our owners and our employees,” he said of the deal.
The acquisition, Van continued, lets Prism keep its lender services and owner program while it secures more resources and more opportunity from Aimbridge. “Aimbridge, at their size, can provide resources in terms of systems, purchasing power, help with personnel [that is] unequaled in the business, so we'll be able to draw on those resources to give even better service to our owners and more opportunity to hire employees,” according to Van.
“Aimbridge’s focus is growth that expands our capabilities, scale and innovation,” said Mike Deitemeyer, president and CEO of Aimbridge Hospitality. “We are confident Prism is the right company to align with, given its strong culture, exceptional portfolio and unique strengths that complement our team.”
Van said a number of businesses had reached out to Prism over the past year to discuss acquisition opportunities. “This is the year for management companies to be acquired,” he quipped. “We've been approached by every major player—some very attractive ones, some great companies.” Deitemeyer recalled that Aimbridge was initially focused on Prism's work in the lender services space, and Van noted the “cultural fit” between the two companies that made the deal compelling.
Prism, Van added, has some programs that Aimbridge is looking to implement. “We have weekly meetings focused on how we make our owners the most satisfied, how to give them what they want—not what we think we want, but what our listening tells us they want.” Prism also has a “very long-term footprint” in the lender services area, including commercial mortgage-backed securities and special services for banks for life insurance companies. Both programs, Van said, are set to grow within Aimbridge.
Shared Resources
For Prism’s owners and employees, Van does not expect much to charge. “They'll still have the same Prism email account, same reporting and same salaries. “But they'll be working within Aimbridge and we'll be sharing resources they have because of their scale and their sophistication of systems,” he said. Van expects Prism to use several of Aimbridge’s systems—and its buying power. “For our owners, our employees, they won't see anything different, and we'll continue to integrate our cultures and our systems throughout the year.” Van expects the two companies to be fully integrated by 2023.
Prism owners likely will see some savings in expenses thanks to the discounts Aimbridge will be able to provide, Van said. “Workers' compensation is a huge expense for owners,” he noted. The combined portfolio, however, has enough hotels that Aimbridge will be able to save “a significant amount of money” on workers' comp insurance. Similarly, in terms of employee benefits, Aimbridge has “some innovative systems” for flexible working conditions. For example, Van said, a housekeeper may only be available to work 19 hours for a particular week. “They've got a way to fit that in,” he said. Conversely, if workers want more hours but the hotel does not need additional staff, they can take shifts at other properties in the area. “So it empowers the employees in the hotels to work more when they want to and when they can.”
Aimbridge also has very sophisticated accounting and business intelligence systems, Van said, which will help float all of the proverbial boats. “They've got an unrivaled database of information [that] helps us with our management of our properties,” he said. The two companies will be able to share group leads—for example, if a Prism property is full for a weekend while an Aimbridge hotel has rooms available (“or vice versa,” Van added), the two properties will be able to help each other.
Van also said Aimbridge has “the best hotel business intelligence system in the world,” and expects the platform to help Prism’s hotels improve forecasts and save on expenses. “They've been able to spend millions and millions of dollars on systems that a company like ours that has 50 or 60 hotels just can't afford to do,” he said. “So our owners will be getting the best of both worlds. They’ll continue to get our personalized service and they’ll be also getting the resources from the world's largest third-party management company.”
That cultural fit Van had cited is also an important factor. “We have a lot of fun at Prism,” he said, acknowledging recent challenges and the demanding nature of hospitality even in the best of times. “Our fun is from taking care of each other and celebrating victories—and [Aimbridge has] that same culture. We feel, already, really at home with the people over there.”
As of press time, the Prism team is set to move into Aimbridge's Plano headquarters in January 2022. Prism will continue operating as Prism, Deitemeyer said, “so from the ownership and employee standpoint, nothing is changing at this time.”
Prism has more than 48 properties across the country in its portfolio. Aimbridge's portfolio has approximately 1,500 properties in 49 states and 20 countries, including its projects in the pipeline. The terms of the deal were not disclosed.