Hotel Size, Structure and Service in an Evolving Industry

DALLAS—The only constant is change in the commercial real estate industry and this is certainly true of retail, industrial and office. But, not to be left out is hospitality, which is undergoing a metamorphosis all its own.

Prism Hotels & Resorts is a Dallas-based full-service hotel management company that manages US hotels and resort properties for leading brands as well as independent and boutique hoteliers. In this exclusive, Prism president and CEO, Steve Van shares how the company’s approach to growth and business enables it to compete with the largest companies in the industry, at the same time keeping employees and owners happy, and maintaining the personal connection with clients and partners.

GlobeSt.com: How did Prism get started?

Van: I founded the company in 1983 with a small group of partners, and we got our start building, buying, repositioning and operating a number of landmark luxury hotels in Texas. Our evolution from a boutique operator in the Southwest to experienced national hotel management company really took off in the 2000s, when we capitalized on our strong reputation and seized opportunities to leverage our hands-on management expertise and national relationships to grow our management portfolio.

GlobeSt.com: While many businesses are typically focused on continuously growing a book of business, Prism has taken a more measured approach to growth. How did you come to that decision and why does it work for you?

Van: We’ve honestly found that the secret sauce for us is to keep our portfolio mid-sized. Big enough to have all the specialized expertise but small enough to maintain the scale of human relationships we value. That means personal relationships with both our owners and employees.

GlobeSt.com:  So you are growing—but strategically—and with a specific end goal in mind?

Van: Absolutely. It’s something we’ve given a great deal of thought to and the growth we’ve seen in recent years is not just opportunistic, it’s strategic. We currently have around 40 properties in our portfolio, and we have about 10 more in the pipeline in 2019. That will bring us to our goal of 50 properties, which we think is our sweet spot.

GlobeSt.com: What makes 50 properties the “sweet spot”?

Van: It’s different for every hotel management company, of course. There are so many different factors that go into creating a successful business approach. For us, size is about determining where we can compete with the largest companies in the industry in terms of sophisticated resources and performance delivery without making sacrifices in terms of our owner-focused culture.

GlobeSt.com: In other words, bigger isn’t always better?

Van: Yes, the size of your organization plays a critical role in shaping your culture. It’s the most fundamental sociological reality: bands are different from tribes, tribes from chiefdoms, chiefdoms from kingdoms and kingdoms from civilizations. To give our entrepreneurial owners the performance and attention they want, we have to limit our size. If you’ve got a portfolio with hundreds of properties, building and nurturing those close connections and tight relationships that are the foundation of a strong, close-knit culture gets exponentially tougher. At a certain point, employees become essentially just numbers, and it’s literally impossible to devote the same kind of meaningful care and individual attention. I firmly believe that if you treat your people like a number, you’ll inevitably end up treating your guests like a number as well. Size at some point dictates treating owners and employees as numbers.

GlobeSt.com: What else should hotel management companies be doing to foster a strong professional culture?

Van: Well, you have to actually do the work. That begins with having honest and connected conversations with every single member of your team. You want to give and receive honest feedback, and that’s only really possible if there’s trust, and if those relationships are genuine. If you can pull that off, you’ll end up with a more creative, constructive and collaborative environment. Your employees will feel supported and empowered. And that positivity carries over, eventually translating into better service, and more positive and memorable guest experiences.

GlobeSt.com: Have those memorable guest experiences you’re talking about become even more impactful today, with the proliferation of social media platforms and independent review sites?

Van: There’s no question. Guest feedback isn’t just more accessible, it’s more impactful than ever. One small moment, whether positive or negative, can set off a ripple effect that can have big implications for your brand and your bottom line. Word of mouth has always been a big deal in this business. It’s just that that message has gotten a lot louder with new technologies. The stakes are higher—but that’s part of what makes this business so fun.