It is not uncommon for someone to completely shift gears in their life and go in a new direction, whether that is changing careers or moving to a new city or country. But for a company that has been in business for nearly 35 years, that is somewhat unusual.
Yet that is exactly what Stonebridge Companies has done. First launched as a hotel owner and developer, the company has now solely focused on third-party management.
The company was founded more than three decades ago by Navin and Rita Dimond. “Navin bought his first hotel and fell in love with the business and decided that there was a greater niche to build,” said Rob Smith, CEO/president, Stonebridge Companies.
Over the years, Dimond developed 74 hotels, with the company acquiring properties, repurposing them and growing the company’s portfolio. However, as he began selling these hotels, owners who purchased them asked Stonebridge to continue managing the properties.
These requests marked the beginning of Stonebridge’s transition into third-party management. As Smith explained, the transformation was gradual but purposeful.
“As he started selling the properties, some people asked, ‘Can you stick around and manage it after we buy it?’” Smith shared. “So, he reluctantly got into third-party management. By the time he sold the company in February of 2022, we had about 40 hotels that were third-party managed.”
For Smith, who joined the company last year, the next step in Stonebridge’s evolution was clear. The company embraced its new identity as a third-party operator. “The whole plan was to go full-fledged into third-party management,” he said.
In the same month that Smith joined the company, Stonebridge acquired Real Hospitality Group, a move that grew the firm significantly. The acquisition not only expanded Stonebridge’s geographic reach from 12 states to 25 but also brought in a wealth of experience in full-service and boutique hotel management.
“We treated it as a merger because the talent really complements what we already had,” he said. “It gave us density in markets where we already had a presence, helping us provide better costs and support for our hotels.”
The merger with Real Hospitality Group also brought Stonebridge closer to its long-term goals, ensuring that the company remains focused on providing superior service to hotel owners while reducing costs through economies of scale. According to Smith, the merger has already resulted in significant cost reductions, such as a 35% decrease in payroll processing.
The company now manages 160 hotels across 25 states, including a notable presence in Denver, where the company is headquartered. Smith added, “We also have a cluster on the East Coast, and then we’re spread throughout the country. We even have hotels in Alaska.”
Smith said that company he inherited was already in great shape when he took over the reins, but he wanted to improve some areas.
“When I came in, I quickly realized that we had the best top-line revenue management and sales organization I’d ever worked with,” he said. “We have best-in-class accounting, and where I wanted to build out was operations and sales. Some of it had to do with adding additional vertical expertise, and some of it had to do with adding additional leadership coverage, but it’s complete now.”
Since he has come on board, the company has added several key executives, including Lee Palaschak as EVP, operations; Chris Cheney as EVP, commercial services; and Chad Goodnough as SVP, sales strategy & innovation.
“We haven’t gotten rid of anyone,” said Smith. “It’s all about just continuing to build our infrastructure and organization—not necessarily for growth, but for today—and the best way to grow is to perform and have results. When you look at the growth that we have in the next 45 to 60 days, the number-one area we’re growing is new hotels from existing owners. I think that’s a testament to our results.”
Growth strategy
The CEO said that the company is committed to adapting to industry trends and evolving to meet the needs of hotel owners who increasingly prefer outsourcing operations. Unlike many companies that grow too large and lack the agility to provide customized services, Stonebridge has made a deliberate choice to grow steadily, focusing on maintaining high-quality operations.
Smith’s goal for the company is to “slowly” get to 250 hotels. “We don’t want to grow too large,” he explained. “We want to grow in a very tempered, strategic fashion with the right partners and infrastructure. We’re not under any pressure to grow, but we want to ensure that as we expand, we continue to execute well on our owners’ investments. We don’t have any grand targets. We’re not under any pressure to grow. But, of course, like any investment, we want to grow, but we want to grow at a very tempered pace.”
While the company’s roots are as an owner and developer, Smith believes that experience gives it an advantage over other management companies. Many Stonebridge employees have been with the company for years.
“We have a lot of longevity and a very low turnover,” he said. “They think like an owner, and it really helps us in how we manage because they’re very savvy and conscious about how we spend money.”
One of the keys to Stonebridge’s success in this transition has been its ability to integrate various operational departments, such as accounting services, revenue management and engineering, into a cohesive whole that strengthens the management of each property, according to Smith.
“The way I’ve presented this company to the market is, first and foremost, that we make money solely through our base management fee,” he said. “We run several cooperatives within the company, such as accounting services and revenue management, and we even offer engineering services. These are traditional services, but we run them as cooperatives to make our operations stickier and more integrated. We don’t outsource anything. I think a lot of people are focused on companies that are too big, but I also believe we’re strongly positioned against companies that are too small.”
Stonebridge has not only expanded in terms of the number of properties it manages but has also ventured into new types of hospitality segments, such as luxury and resort operations. The company has already taken on several luxury hotels, including converting a W Hotel in Atlanta to a JW Marriott. “We’re excited about growing on the luxury side,” Smith said.
The company recently opened an office in Miami and brought on Marco Selva as SVP, business development & operations, luxury & lifestyle, to specifically focus on this sector and the Southeastern U.S., the Caribbean and some parts of Latin America.
“We think that there’s a lot of opportunity coming up for third-party management in the Caribbean,” said Smith. “There’s going to be growth, in my opinion. First, the great majority of the properties in the Caribbean have historically been brand-managed, and the brands want to get out of that part of the management business by and large, so there aren’t a lot of third-party companies that have the infrastructure and are the right size. There are a lot of very small companies that are doing it, and they just don’t have the right infrastructure. That’s why I think there’s an opportunity for us to take the existing infrastructure, which is fantastic, and apply it with our operational knowledge and get into that segment.”
Smith spent 20 years of his career in the Caribbean and Selva spent 15 years in the Caribbean. The management company also added David Wahba as VP, sales, luxury, lifestyle and resorts, who also has experience in the region.
“We’re building out the Miami office so that we can take advantage of the rest of the company’s infrastructure and grow in that segment,” said Smith.
Looking ahead
For the foreseeable future, Stonebridge expects to continue its methodical growth while maintaining the quality and efficiency that has earned it a strong reputation in the industry. Smith emphasized that the company’s growth strategy is centered on executing results and strengthening relationships with current owners. “The number-one area we’re growing right now is new hotels from existing owners,” he shared.
As the success with its acquisition of Real Hospitality has proven, the company is open to looking at purchasing other companies, but, “if we are to acquire another company, it has to be accretive to our owners and accretive to their owners,” he said. “There’s no reason to buy a company just to grow your company. It has to be something that, first and foremost, makes sense to enhance the operation and to reduce the costs to the existing owners. That’s when it’s a win-win, and that’s where we’re interested in doing it. We’re really focused on doing it not only to expand into markets we’re not in, but also to create more density in markets we are in, because we find when we have density, we’re able to provide better oversight at less expense.”
As Stonebridge moves forward, its focus remains on being recognized as the best third-party operator in the hospitality industry.
“We want to be known as the best choice for an owner’s investment,” said Smith. “When people invest with us, we’re going to execute on their investment and provide the right expertise to run their hotels.”
