Hotel company HHM buys Urgo Hotels & Resorts

take skift

Expect more mergers between hotel management companies until about 10 companies are left in North America for the most competitive markets.

Sean O’Neill

HHM, a hotel management and investment company, is acquiring Urgo Hotels & Resorts in a transaction that will increase HHM’s portfolio by nearly 30 percent to approximately 235 full-service and select-service hotels.

Philadelphia-based HHM did not disclose contract terms. The takeover of the family company Urgo should be completed before October.

The deal is less remarkable for its size than for the trend it represents, which is a steady stream of mergers and acquisitions among third-party hotel managers.

The transaction would expand HHM’s portfolio by adding Urgo’s approximately 7,000 rooms open or under development in North America to HHM’s approximately 30,000 rooms.

“This HHM/Urgo deal is just the continuation of a trend that began in recent years with mega-mergers in management,” said Alan Woinski, editor of the Daily Lodging Report. “The smaller companies are finding it difficult to compete against these giants and are banding together to offer more to hotel owners.”

In the US, HHM is a leading manager of Marriott and Hilton hotels, but also operates more than 30 independent luxury and lifestyle hotels. The acquisition of Urgo will expand the company’s presence in Montreal, Washington, DC and South Florida.

Earlier this year, HHM completed the purchase of 25 long-term management contracts for Marriott and Hilton, covering approximately 4,000 rooms from White Lodging. In January, HHM assumed management of The Joule, a boutique hotel in Dallas.

Increasing scale allows management companies to increase their leverage and increase return on investment in technology when dealing with hotel owners such as public companies, private equity firms and family office investors. Smaller management companies are struggling to compete with the majors, which have already merged in recent years.

Mergers have grown in popularity since the merger of Aimbridge, North America’s largest independent hotel management firm, and Interstate Hotels & Resorts, a hotel operator, in 2019. Some of the largest third party managers in North America today include Aimbridge, Alberigo, American Liberty, Arbor Lodging, Atrium Hospitality, Banyan Tree Management and Benchmark Pyramid.

Leave a Reply

Your email address will not be published.