Rob Smith knows big. Nearly 12 years of his career were spent with Aimbridge Hospitality, the largest third-party management company in the world, the last two as president of the company’s full-service division. In 2024, he decided to downsize. That’s when he assumed the position as CEO & president of Stonebridge Companies, which, at more than 160 hotels, is not small by any stretch, but it isn’t Aimbridge and its thousands.
It’s a change, sure, but one he has eased into with aplomb. Here, he shares his biggest wins so far, the delicate dance between owners and brands, how best to drive profitability and his expectations for the next 12 months.
HOTELS: You’re two years into your role as CEO of Stonebridge Companies. What’s been your biggest win? What’s been your biggest surprise?
Smith: My biggest win was really choosing my current role with Stonebridge. When you make a move like that, you know exactly what you are leaving, but you do not know what you are stepping into until you are in the seat. I joined a company with a great baseline; I just had to integrate the teams and create a new culture.
Over the last two years, we have focused on strengthening the team through a combination of internal promotions and the addition of top talent from across the industry. Today, I believe we have one of the strongest leadership teams in hospitality, and that has positioned us for meaningful growth.
The biggest surprise has been where that growth has come from. In a typical cycle, management company growth is heavily tied to transactions. With transaction activity muted, our growth has been almost entirely driven by management changes to underperforming assets. Owners are looking for operators who can drive results.
HOTELS: Managing hotels is challenging—it’s maybe never been more challenging than now in the face of higher expenses that are stressing the P&L. How do you make sure you are doing a good job not only generating revenue, but keeping owners more of it?
Smith: Managing the middle of the P&L is table stakes. Every operator talks about controlling expenses, but the difference is how you do it. I have spent my career as an operator, both on and above property, and our approach at Stonebridge reflects that. The two highest costs in any hotel are payroll and customer acquisition. Many operators try to improve profitability by taking things away from guests and associates. We focus on guest service and experience, having the most profitable segmentation mix and attracting and retaining the best talent.
HOTELS: There’s a lot of pressure on margins and profitability. Hotel owners have been squeezed while brand companies have flourished. What has been owners’ chief worry or complaint and how do you balance the relationship between brand and ownership?
Smith: Owners want to know that every dollar they are investing in brand programs is generating a return and that they are accretive to brand loyalty and guest acquisition. They also must make sense financially. If the brand is delivering north of 50% of the hotel’s business brand direct, then the hotel will be successful, and the owners won’t question the cost of brand programs. We make sure the brands are aware that we are focused on brand delivery.
HOTELS: The K-shaped economy has shown the almost unfettered success and resilience of the luxury hotel segment. Management companies see that and are looking to grow in the luxury and lifestyle segment. What is the opportunity there?
Smith: There is no question that upper upscale and luxury hotels have been some of the strongest performers in our current market. I also believe lifestyle is not limited to luxury. Lifestyle is about creating an experience, and that can exist at every chain scale if you are doing it right. On the luxury side, there is no room for shortcuts. Luxury is only partially about the property. The challenge is to understand guest expectations and deliver a consistent experience every day. Luxury travelers know what they want; they are willing to pay for it; and they will take their business elsewhere if the experience does not meet their expectations. The opportunity is there, but only for operators who can execute at that level.
HOTELS: You recently hired a new chief operating officer, a position that is crucial to overall organizational success. How do you view leadership and, drawing on your experience, what makes or defines a great leader in the C-suite?
Smith: We are hyper-investing in performance. One of our secret sauces is that we keep our people at very low hotel capacities to make sure our above-property engagement is best in class. We have what I believe are the best results in our space and operations does not mean only financial performance. It starts with the work environment, the talent we attract and retain and the guest experience we provide. Paul Eckert was our choice to lead this effort with all these areas intentionally targeted.
HOTELS: There are hundreds of third-party management companies. How do you stand out from the crowd and why?
Smith: Our number one focus is our owners’ investment returns. We feel that if we are successful in this singular focus, all other areas of our business will be successful, and we will be able to invest in the growth of our people. Our owners feel this in every decision we make and in how we approach both them and their assets.
HOTELS: Crystal ball: How do you handicap the next six to 12 months, and what will be the defining conversation or theme vis-à-vis the hotel industry?
Smith: The next 12 months will look a lot like the last 24: Transaction activity will continue to be muted, owners will be holding firm on valuations and capital costs may improve marginally. Performance should remain steady, with growth driven by rate gains, rather than occupancy. Execution will continue to be the biggest differentiator. In an environment with challenging market conditions, strong operators will rise to the top. That is why I believe you will continue to see more management changes as owners look for partners who can consistently outperform and increase profitability.