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HOTEL BUSINESS REVIEW

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Why Hotels Need Third-Party Asset Management

By Walter Peseski Senior Vice President, Asset Management, Garfield Public/Private, LLC | December 2025

DoubleTree by Hilton in Abilene, Texas

The hospitality industry looks very different in 2025 than it did a decade ago. The hotel industry finds itself in a period in which expenses are growing faster than revenue, headlines out of Washington change daily (or hourly), consumer confidence is low, cost of debt continues to hinder the transaction and construction markets, and outside of lower interest rates, which the market has been hoping for the past three years, there aren’t any clear catalysts for growth. What’s an owner or investor supposed to do?

As market conditions, investor expectations, and guest preferences evolve, hotels are becoming increasingly complicated and owners without technical knowledge in hotel operations, finance, construction, and market dynamics are struggling, particularly in cases where an entity like a university, city or nonprofit owns the hotel.

Third-party asset management is becoming the critical differentiator for hotels that thrive in this competitive landscape because it allows someone with unique hotel expertise to properly balance financial performance with operational efficiency, brand alignment, and long-term value creation. A good asset manager is the center of the owner-manager relationship that speaks the language of both parties.

As someone who has spent years working across the investment and operational sides of hospitality, I’ve seen firsthand that third-party asset management isn’t simply about financial performance. It’s a philosophy that unlocks the full potential of a property while protecting ownership’s interests and increasing their property’s value. It’s a relationship forged on trust with both the owner and operator. If optimal financial performance is the north star, it takes experience on both sides of the relationship to help all parties arrive there.

Smokehouse Abilene

The State of the Hospitality Industry: A Market at a Crossroads

The U.S. hotel sector continues to recover from pandemic-era disruptions, but growth is uneven and increasingly complex. According to CBRE, hotel revenue per available room (RevPAR) is projected to increase 0.1% in 2025, but growth will vary widely depending on property class, location, and demand drivers.

Luxury properties continue to capture a large portion of customers, while midscale and economy hotels are under pressure from rising costs, slowing travel, and the continuing impact of alternative accommodations like Airbnb. Revenue across the country is flat to marginally down in the face of rising expenses including utilities, wages, and insurance, which puts profitability under pressure.

On the investor side, capital continues to flow into hospitality, but investors are also becoming more selective. Many are no longer satisfied with properties that deliver top line revenue alone; they want a strategy that ensures sustained asset value.

This is where professional third-party asset management comes into play.

Third-party asset management ensures that a hotel performs well today and is also positioned to maximize its long-term potential. While an operator is laser-focused on day-to-day operations to achieve their budget, asset managers represent ownership’s long-term strategic interests.

That means asking questions like: Is the property operating efficiently relative to its competitive set? Are brand standards and guest experiences aligned with market expectations? Is the management company the right fit for the property’s goals? What capital improvements will maximize ROI and when should they be executed? How does this asset fit into ownership’s broader investment portfolio? When should they look to sell to capitalize on market dynamics?

True asset management blends financial oversight with operational, marketing, and capital planning expertise. Asset managers will challenge previous assumptions, identify missed opportunities, and ensure alignment between ownership and operators.

And while the concept isn’t new, the need for asset management has never been greater.

Standard City View

Why Ownership Needs More Than Just a Management Company

The traditional owner–operator–brand relationship can create blind spots. Management companies are primarily paid on revenue with a smaller incentive fee contingent on achieving budgeted profitability. With brand-managed hotels, management also has pressure to uphold the brand image even if the ROI isn’t accretive to ownership’s interest.

I’ve seen numerous examples in my many years in the industry.

A brand decided to roll out new towels as the brand standard and continued to fail our hotel on Quality Assurance scores because our hotel lacked these new towels. Management was prepared to replace the entire towel stock, despite our hotel only being two years old. We were able to work through the situation with the management team and with the brand to find a solution without ordering new towels, saving the hotel roughly $30,000.

In another example, a hotel was carrying an unnecessary department since opening because it’s what the brand template called for. If left to the hotel, the department would remain (remember, management is paid on revenue, not profit); however, by working with the management, we were able to find a solution to save the hotel $300,000 annually.

Successful asset management isn’t simply preventing management from spending money, but rather thinking through the rationale for each expense. For example, one of our hotels wanted to install Tesla chargers. Rather than obliging simply to satisfy a brand standard, we requested an investment analysis of the Tesla chargers. In this example, there was a clear ROI that we were able to present to ownership, justifying the investment.

Asset managers fill a gap by acting as ownership’s advocate. They evaluate performance beyond surface-level metrics, provide transparency in reporting, and bring accountability to any agreements. Most importantly, they identify opportunities that management teams may overlook.

Without this perspective, owners risk leaving significant value untapped.

Library

The Value of Third-Party Asset Managers

At its core, asset management is about value creation.

Done well, asset management delivers stronger financial performance through both revenue growth and healthier profit margins with long-term asset appreciation. It gives operational accountability with clear benchmarks and consistent reporting. Asset managers have the strategic agility to pivot when market dynamics or guest expectations change. They also provide a broader market perspective and recommend best practices found across brands and chain scales.

It’s also important that owners choose an Asset Manager solely dedicated to Asset Management. That’s why I chose Garfield Asset Management. Asset Management is literally in our name. We don’t manage hotels, own hotels, conduct market studies, appraise properties, or act as expert witnesses. Our team has one task—enhance the value of our hotels—and we do this through fostering relationships with our respective owners and management teams.

This value is measurable. Properties with engaged asset managers consistently outperform peers in profitability and market positioning. Within the first year, we’re able to unlock multiples of value compared to any fee we charge.

Private Dining

The Future of Hotel Asset Management

Looking ahead, several industry shifts are making asset management even more critical. STR and Tourism Economics now projects 2025 U.S. hotel occupancy to decline YOY to 62.5 percent compared to their previous projection in June of 62.8 percent. With occupancy rates predicted to continue falling, it’s important to think about the following factors as you safeguard your assets for the future:

Labor, insurance, and utilities are all trending upward, leaving less room for error in operational decisions. Asset managers help identify efficiencies and prioritize capital spend.

Major hotel companies continue to roll out new brands, giving owners more choices but also more complexity. The right brand can unlock demand, but the wrong fit can erode value. Asset managers provide the analysis to guide these decisions.

Revenue management, digital marketing, and guest engagement platforms are quickly evolving. Asset managers help ownership evaluate which technologies deliver real ROI and which are unnecessary expenses.

Investors and guests are both increasingly focused on sustainability. Asset managers can position hotels to meet these expectations in ways that also enhance asset value.

Many investors now view hospitality as part of a diversified portfolio. They expect the same rigor in reporting and strategic planning that they get from their other assets. Asset managers bridge the gap between hospitality operations and investor expectations.

With these trends shaping the next several years of hotel management, it is imperative hotel owners, especially those owned by less experienced groups, consider switching to third-party asset managers who can balance current best practices with emerging trends, maximizing profitability for the long term.

Conclusion

The hospitality industry is entering an era in which hotel ownership is more complex, margins are thinner, and competition is fiercer. Owners need partners who can look beyond daily operations to ensure long-term value creation.

That is the benefit of third-party asset management. It helps owners maximize returns, protect investments, and position their hotels for the future. Hotels that embrace asset management will not only perform better today but will be equipped to seize the opportunities of tomorrow.

The evolution of the hotel business is happening faster than ever. Compare the strongest third-party management companies, brands, and consumer interests today to those of just a decade ago and the pace of change is undeniable. While the investment profile of hotels remains attractive, the landscape around them has shifted dramatically.

In this environment, owners can no longer rely solely on operational execution or brand strength. They need a strategic partner who understands the intersection of finance, operations, and market dynamics. They need someone who can guide decisions with an owner’s perspective and an investor’s foresight.

In a rapidly changing industry, the level of partnership and property elevation offered by a third-party asset manager is no longer optional, but essential.

Mr. Peseski

Walter Peseski serves as Senior Vice President of Asset Management for Garfield Public/Private, LLC, a national public/private real estate developer. He leads Garfield's Asset Management Division, overseeing hotel performance for third-party owners and lenders while driving operational and financial success. With more than 20 years of experience across the hospitality industry, Mr. Peseski brings a unique perspective shaped by his background in operations, investment, and asset management. His career began in hotel operations with Disney and Hilton, where he developed a passion for the guest experience and a strong understanding of what drives successful hospitality businesses. After earning his Master's degree in Hotel Finance from New York University, he transitioned into asset management and business development roles that combined his operational knowledge with financial expertise. Mr. Peseski earned his Bachelor of Business Administration from Wilkes University and his Master's in Hotel Finance from New York University.

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13. PRIVACY POLICY

The following is the Privacy Policy for HotelExecutive

We can be reached via telephone, email, or online at our contact page. When you visit our site we do not log any information regarding your domain or email address. Information Sharing: We do not share user information with any third parties other than via press release distribution as described below.

Hotel Newswire is a newswire service that distributes press releases on behalf of our users. If you decide to submit a press release for distribution through our system we will transmit your entire press release including any personal information therein contained to our media contacts and online distribution points including search engines. This is the only redistribution of your information that we engage in. Your submission of press releases through our system indicates consent with this policy. The information we collect during your registration process is used to notify users about updates to our service and inform users of any special events hosted by Hotel Newswire. This information is not shared with other organizations for commercial or non-commercial purposes.

Cookies: Our system requires the use of cookies to enable the user to log back into our website to access information from the newswire, without having to log in each time using the required username and password.

If you do not want to receive email from us in the future, please let us know by following instructions included in our communication with you. Users who supply us with telephone numbers online may receive telephone contact from us regarding their account, or informing them of new products and services available on the HotelExecutive website. If you do not wish to receive such telephone calls, please edit your account and remove your phone number from your account profile. This can be done from your user account menu.

Ad Servers: We do not partner with or have any relationship with any ad server companies. From time to time, we may use customer information for new uses not previously disclosed in our privacy notice. If our information practices change at any time, we will post the policy changes to our website to notify you of these changes and provide you with the ability to opt out of these new uses. If you are concerned about how your information is used, you should check back at our website periodically.

Upon request we provide site visitors with access to all information (including proprietary information) that we maintain about them. Users can access this information by logging in to their account.

Security: We always use industry-standard encryption technologies while transferring and receiving user data exchanged with our site. We have appropriate security measures in place in our physical facilities to protect against the loss, misuse, or alteration of information that we have collected from you on our site. We do not store credit card information in our systems.

If you feel that this site is not following its stated information policy, you may contact us.

Sanat Patel
Mike Del Prado
Angela Spangler
Erin Whitlock Brown
Mark Johnson
Marci Zaroff
Robert O'Halloran
Cynthia Mejia
Jacqueline Voronov
Nicholas Tsabourakis
Paul McElroy
Maliha Aqeel
Ranjit Gunewardane
Jeffery Smith
Ashley Labrosse
Coming up in March 1970...