Finding opportunity in a challenging economy
Toward the end of 2021, a time when hoteliers were continuing to wonder whether the industry would ever get back to prepandemic levels, Summit Hotel Properties announced it was acquiring a 27-hotel portfolio from investment firm NewcrestImage. The news was another indication of the hospitality industry’s value despite economic uncertainties.
To sift through the importance of this acquisition – to Summit/NewcrestImage and the industry at large – NewcrestImage Chairman & CEO Mehul Patel, CHA, CHO, offered his thoughts on the deal’s impact. An AAHOA Lifetime Member and Past Chair (2013-2014), Patel also understands the influence members wield in the industry, and here he explains the connection between the vibrancy of AAHOA Member balance sheets and the industry at large.
WHY IS THIS ACQUISITION A BIG DEAL?
Mehul Patel: For Summit, the transaction is significant because it increases the company’s portfolio by about 35% and expands its presence in key markets of the fast-growing Sun Belt, all with properties that carry premium brands and that have an average age of less than four years.
For NewcrestImage, the transaction launches an exciting new chapter in the company’s rich history. We intend to focus on a three-pronged investment strategy that has proved undeniably successful for us by actively developing new hotels, responsibly acquiring existing properties, and carefully managing our portfolio.
HOW DOES AN AGREEMENT LIKE THIS HELP CUSTOMERS?
MP: NewcrestImage has always created properties that offer guests distinctive architecture, the latest amenities, comfortable decor, and convenient locations. We’ve helped popularize trendsetting travel concepts such as dual-brand properties, adaptive re-use of historic buildings, and the lifestyle hotel campus, which creates vibrant mixed-used neighborhoods.
We are committed more strongly than ever to developing innovative projects and, thanks to this deal, we’re fortunate to have an extensive base of financial resources that will enable us to turn big ideas into bold reality.
HOW DOES THIS REPRESENT AAHOA MEMBERS IN A POSITIVE LIGHT?
MP: For the hotel and banking communities, this transaction underscores the powerful role that Asian-American hotel owners have in this country’s hospitality industry. For AAHOA Members, this transaction demonstrates the value and impact of our association. AAHOA exists to help members be smarter and more successful hoteliers.
I’m a better hotel owner today because of my experience with AAHOA. Like every AAHOA Member, I’m building on my knowledge and my contacts to create prosperity for myself, for my children, and for future generations of my family.
WHAT IMPACT, IF ANY, DO AGREEMENTS LIKE THIS HAVE ON THE HOTEL INDUSTRY?
MP: When you have strong properties, there will always be interested buyers. That’s the biggest lesson of this transaction.