Warren Fields outlined how Pyramid Hotel Group and Benchmark Global Hospitality joining forces means that the united entity is progressing with a portfolio of 240 properties in the US, Caribbean and Europe.
Best of both worlds
Fields was a founding partner of Pyramid and was instrumental in the process of bringing Benchmark onboard. “For the most part, the really hard things from the merger are done and I’m very proud that it didn’t really impact our hotels at all, because we’ve had record performance at our properties in the last year, both at the top and bottom line,” he said.
“Both companies were really good at what they did, with Benchmark specialising in independent luxury lifestyle hotels, and while Pyramid has some of those independent sites, we are primarily a branded oriented organisation. So we really have the best of both worlds together. The merger has clearly put a stake in the ground that as an operating company there isn’t a product or a segment that we’re not in or doing well at.”
Currently, Pyramid Global Hospitality has an annual operating revenue of hotels under management of more than US$3 billion.
Fields analysed: “When you look at our footprint, just in North America it goes from Maine to the Caribbean to as far west as Hawaii. From an owner’s perspective, Pyramid Global Hospitality is a one-stop-shop – we can run lifestyle independent hotels and we also have around 30 select-service hotels. The depth and the breadth of the organisation is second to none.”
Pacific northwest additions
At the end of last year, Pyramid Global further feathered its nest with the acquisition of Portland, Oregon-based Provenance Hotels’ operating division. The transaction added 12 full-service, independent hotels to the group’s national network.
“Those are fabulous hotels in a part of the country where we had some presence but not in Seattle, where we’ve added three hotels, or Tacoma, where we’ve now got one. It’s a really nice portfolio in the Pacific northwest, particularly in Portland, where we now dominate from a product perspective.
“Provenance’s teams are really good and as we’re now a larger company our employee benefit package is even better and more cost effective. We have a very robust national sales office and our own central reservations platform which generated 43% conversion in 2022, which is outstanding – close to US$40 million in revenues. Provenance will plug into all of that and we think we can help them on both the top and bottom line as well as recruitment, so it’s a good deal for us and them.”
While Fields wouldn’t be drawn too much as to whether there is any further merger and acquisition activity in the offing, he did detail the firm doesn’t have any “solid targets” and that the company has taken learnings from the Benchmark merger, as well as its 2020 Hamilton Hotel Partners tie-up with UK-based Hamilton Hotel Partners to form a European arm, Hamilton-Pyramid Europe.
He said the latter deal “allowed us to go into eight different countries in the EU, whereas beforehand we were only in the UK and Ireland”, adding: “If we can find something strategic that fits a hole for us like the Benchmark and Hamilton deals did, then we’ll spend time on it.”
However, he cautioned: “Growth just to get big doesn’t really move the needle for us. In my opinion, good growth is to find something that’s interesting and that has a differentiator to us.”
Last year, Hamilton-Pyramid Europe established a joint venture (JV) with the Canada Pension Plan Investment Board (CPP Investments). The investor has committed €475 million to the JV, which will focus on acquiring operating hotels in key gateway cities and select resort destinations in Europe.
The first acquisition for this portfolio was W Rome, which comprises 162 luxury hotel rooms, re-opened in April 2022 after a full redevelopment. “W Rome was a really good buy for us, in that the strategy with CPP Investments is to find core-plus assets in major markets that we as an operator or asset manager believe we can make a difference to. W Rome is just that,” detailed Fields. “There are some renovation dollars that will go into there but that will be more focused on an operating perspective.”
EU asset search
On the JV’s overall aims, he added: “We’d like to find some more assets for CPP Investments. They are actively looking, and the goal is to help them attain their growth targets and put the money in it. W Rome we paid all cash for, which is a leg up on some of our competitors who need debt financing. A year before the debt crisis the bid-ask spread was pretty large, but now I think that’s shrinking and hopefully we’ll be able to find some more assets that are attractive to us.”
As to which type of properties would fall into the attractive category, Fields cited urban EU markets and full service hotels. “They have to be substantive assets. The goal is to keep them in the portfolio for a longer period of time so we’re really looking for complex sites that have the ability to outperform in the good and bad times.”
But overall, what criteria does Pyramid Global use to choose which hotels to take on? Fields revealed: “The main thing we look at is whether our operating team is able to go into that asset and make a positive difference to the bottom line. Some of that means execution of a brand change or renovation but ultimately if we don’t think we can make a difference with the systems in our platform, then we move on.
“There’s nothing worse than having a hotel in your portfolio that’s not performing because that is then where all your time is spent. You’re constantly trying to reassess it because you don’t want to fail.”
On the subject of how the company assesses when refurbishment is required, he relayed: “Effectively every hotel on the planet needs some refurbishment at various times, it’s a capital intensive business. I think the difference is if you look at your customer comment scores and they start telling you that you have a problem, you know you have to make some changes. We try to avoid that, because if you fall behind, it’s sometimes really hard to catch back up.
“From a branded perspective, the brands give you product improvement plans that you have to deal with, but for the most part our owners listen to us and we have a healthy dialogue about where to spend dollars and how to maintain assets. We have really good owners who want to maximise value and you can’t do that without spending some money to maintain the property.”
On rare occasions Pyramid Global builds hotels for its own account, though Fields said that: “I’ve done it more than I care to. The problem with new construction is you’re changing individuals’ travel patterns. You’re trying to convince them to go somewhere they haven’t gone in a specific market, whereas if you bought or took over a hotel you already have a loyal following base.”
Where the firm does provide technical services to owners, it assists with everything from how to make the hotel efficient and how to structure the food and beverage offer, to how the site’s kitchens are laid out. Fields detailed that the company is involved in hundreds of millions of dollars of renovations each year, especially via its Pyramid Project Management division.
Pyramid Global has a robust pipeline of 31 projects it is currently involved with in the planning, design, or construction phase, including an expansive water park in Oklahoma; a large resort in St George, Utah with a golf course and retail element; a renovation in La Quinta, California; a Residence Inn refit in Boston and a new InterContinental construction in Bellevue, Washington. Other brands with developments underway involving Pyramid Global include Marriott International’s Autograph Collection, encompassing Autograph Collection Hotel Jacksonville; Hilton Worldwide’s DoubleTree by Hilton and Curio Collection; Hyatt Hotels Corporation group sites; and Margaritaville Hotels & Resorts, as well as several independent live hotel projects.
These projects stretch right to Q1 2026 and consist of 10 newbuilds resulting in 2,773 keys and 21 renovations across 5,319 keys. The developments are taking place throughout the US, with 14 sites in the east, 10 projects in the country’s central region and six in the west.
Fixtures, fittings and equipment suppliers on these projects are typically chosen by the owners, but Fields reported that Pyramid Global can make recommendations to assist the proprietors.
The road ahead
Looking to the future of the firm, he summed up: “The number one reason that we like to grow is so that we can provide opportunities for our people to actualise what they want to do in their careers. I’d hate to lose a really good person within our organisation because we haven’t been able to provide them opportunities.
“If we were to double the size of the company, we’d have to do it in a fashion that doesn’t burn the team out as well as impact our current operations. Everything that we do from a corporate perspective should not affect what happens in the properties on a daily basis. The corporate team is supposed to be for support, to make everyone’s lives easier and make us a better operating company. So as long as we can grow within that sort of framework, we’re going to continue to grow.”