Aimbridge EMEA Replaces Interstate as Their EMEA Brand
Date: September 2022
Location: Global – Affects EMEA
What Did They Say: No longer Interstate…now Aimbridge EMEA
Who They: Aimbridge Hospitality, the parent company that acquired Interstate Hotels & Resorts in 2019
Main photo: The Hotel Indigo The Hague, an Interstate managed hotel
After spending many years as one of the most well-known global third-party management companies, the Interstate Hotels & Resorts brand is being retired by its parent company, Aimbridge Hospitality, and being replaced with the Aimbridge EMEA moniker.
The existing Interstate Hotels & Resorts portfolio, which has operated as Aimbridge’s international division since 2019, comprises some 114 properties (15,000 rooms) across the UK and Europe and includes brands such as Marriott, Hilton, IHG and Accor, as well as independent hotels. Globally, some 1,550 properties (more than 200,000 rooms) now fall under the Aimbridge name. The move also follows Aimbridge Hospitality’s creation of six new operational divisions earlier this year, focusing on vertical operations and geographic divisions, including Latin America, to bolster international growth.
While the move apparently does not come as a surprise to owners of Aimbridge-managed hotels in Europe, the Middle East and Africa, and there will be no changes to existing deals or operating structures, what the new identity does is help existing and potential investors in the region lean more toward Aimbridge EMEA as their manager of choice because of its existing reputation and size, David Anderson, divisional president of EMEA at Aimbridge Hospitality told HOTELS a few weeks ago.
He specifically referenced all the U.S.-based investors snapping up property in a market like Spain. Many of them have existing relationships with Aimbridge in the States and will now more instantly recognize the name and reputation in a foreign market like Spain. “Choosing the largest third-party operator in the world, rather than a division of one, obviously is a great strength,” Anderson said. “It’s going to help us really put our footprint into Europe going forward.”
In addition to the usual synergies that come with scale, Anderson added that the change will also generate greater agility and allow Aimbridge EMEA to pick up the pace on implementing proprietary operating tools, for example. He cited big technology-related deals being done at Aimbridge in the U.S. right now which previously required Interstate to draw up distinct contracts with vendors. That red tape goes away with every unit now falling under the Aimbridge umbrella.
“It’s really about being not only the world’s largest third-party hotel manager but being the best,” added Mark Tamis, who in May 2022 became president of global operations for Aimbridge. “That was the impetus for us to create six operating divisions – so each division can become hyper-focused partnering with their owners to maximize value.”
When asked about the pipeline in EMEA, again, Tamis and Anderson mentioned the strength of the Aimbridge name translating well to markets where it is seriously prospecting for opportunities today, including Germany, Iberia, as well as the DAC and Gulf regions. While they wouldn’t cite specifics in mid-September, they do expect a number of deals, including portfolios, to transact before the end of 2022.
“The pipeline has been building strongly in the last 12 months because we’ve had focus more into Europe, rather than just the U.K.,” Anderson said. “So, we’re very excited and hopefully we’ll be able to announce deals in the coming six to 12 months about entering into new territories.”
Further elaborating on deal potential, Anderson referred to Iberia, which he said in the last five years has been much more M&A-driven with transactions volume reaching north of US$3 billion and approximately 58% of those deals involving U.S.-based investors. “That certainly helps us,” he added.
“Some of the deals have been slowed down by fund’s inability to leverage capital right now. But at the same time, we have the ability to swing toward investors that don’t require bank debt. We are actually in discussions on a number of projects with that particular type of investor.” – David Anderson
A potential deterrent to growth, however, must be macroeconomics. “Some of the deals have been slowed down by fund’s inability to leverage capital right now,” Anderson said. “But at the same time, we have the ability to swing toward investors that don’t require bank debt. We are actually in discussions on a number of projects with that particular type of investor.”
Creativity is, of course, the other deal driver with Anderson referencing a hybrid lease deal with Hyatt Hotels Corp. last year. “We structured that deal in a way where, for us, it would act as a straight management agreement. But the landlord wouldn’t have the operations exposure of straight HMA – so for them, it acted like a lease,” said Anderson, who adds that key money is another route Aimbridge will use when it’s strategically important.
“We have the will, we have the ways to increase our growth,” Tamis added. “The biggest challenge for us is to keep growing, and that’s what we do well.”
On the performance front, Anderson and Tamis said Aimbridge’s revenue generation index across the CIS in September sat at 120 for 2022. In Central Europe, it was at 114, while UK regions stood at 108 and 112 RDI.
More specifically, Aimbridge’s EMEA forecast for September and October occupancies were in the mid-80s with rates on average trending up 20% versus 2019.
“We’re in a really strong position and in a very dynamic mode with this rebranding,” Anderson said. “We’ve increased our feasibility and development teams in Europe to facilitate growth. We’re also increasing the number of strategic partners. That’s been one of my big aims – to go to these funds and align our interests. We will ensure that when they want to exit, that they can do so unencumbered, and a lot of competitors, perhaps, don’t have that same ability.”
THPT Comment: What’s in a name?….totally logical for Aimbridge to bring their EMEA brand name into line, but we guess most of their hotel-owner clients knew that Interstate and Aimbridge were one company
First Seen: HOTELS magazine
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