With an operational philosophy rooted in storytelling for lifestyle resorts, newly formed Parable Hospitality is looking to impart its own lesson on the industry with an owner-centric model.
Launched earlier this year and headquartered in Aliso Viejo, Calif., the nascent management company is led by Scott Roby, who previously spearheaded Pacifica Hotels’ operating division. At inception, Parable Hospitality oversees more than 30 independent, lifestyle, soft-branded and branded hotels for Pacifica Hotels.
Roby detailed the unique opportunity he sees ahead for the management firm.
“We think there's a big white space for a California-based operator that is small, nimble and entrepreneurial. I think being at 30 hotels is a great size to start at. It gives us a little bit of scale, but also a lot of ability to be nimble and to move quickly,” he said.
Roby further acknowledged some of the complications that are part and parcel of running hotels in California, noting there are “less and less” local operators. He added, “this is our home, we live, eat and breathe it every day.”
Nevertheless, while the company plans to be a “regional operator,” its portfolio extends into other Western states. Roby noted in addition to having a presence all the way up the coast to Oregon and Washington, as well as to the island of Hawaii, Parable will potentially go as far east as Utah.
Chris Marquis, executive VP, Pacifica Hotels, expressed his optimism regarding the newly launched company. “We are excited for the new platform launch of Parable Hospitality and its partnership with our coastal, lifestyle hotels,” he posted on social media.
Roby, meanwhile, explained what’s behind the Parable Hospitality name.
“We really continued to come back to this idea of storytelling. So we looked at all the different variations of storytelling and landed on parable, which represents a short story that uses real life situations and people to tell a story,” he said.
In line with that philosophy, Roby was most recently the founder and principal at Storyteller Hospitality, where he provided consulting and advisory services to hospitality companies. Prior to that, he was a co-founder and SVP of operations for Evolution Hospitality, a lifestyle hotel operator. In addition, Roby was an integral part of the spin-off of the management platform in 2011 from the parent company, Tarsadia Hotels.
Shoulder to Shoulder
Referring to Parable as a “stand-alone operator,” Roby eschewed the idea of being a traditional third-party management firm. Rather, he insisted the company will strive for a “shoulder-to-shoulder partnership with owners” as he further assessed the management picture throughout the industry.
“We think this [mindset] is missing in the landscape today and we are here to strategize and partner with owners. We want to have honest, transparent conversations about what the opportunities are, what the challenges are and how can we collectively work together to solve those issues to increase the value of the asset,” he noted.
Roby emphasized that a big point of differentiation for the company would be a non-traditional, more owner-friendly fee structure. While many management agreements are typically structured with a straight 3 percent of total revenue, Roby noted that often results in an unbalanced deal where operators often make money at the expense of ownership.
“The other differentiator that aligns us with owners is we are really looking to shift the idea of how the fee structures and the hotel management agreements are written. We would opt for a heavier weighting on a gross operating profit or [earnings before interest, taxes, depreciation and amortization] driven management fee to further align our interest with those of the owner,” he stated.
Rising Costs, Positive Culture
Of course, one of the biggest issues for hoteliers in today’s current environment is rising operating costs, something Parable has taken tangible measures to control. As an example, Roby pointed out the company recently hired a risk management safety and security team member. “I think this is a position that doesn't tend to exist, but we're working hard with every single one of our general managers to limit or mitigate risk to the extent that we can,” Roby said.
He further explained, “we want to show that we are going to fight and claw for every dollar in the middle of the page, whether that be tech-stack expenses, operating expenses or labor management [costs]. We are going to be working as hard on the expenses as we are on driving top-line revenue,” he noted.
Meanwhile, Roby acknowledged the importance of establishing a positive company culture, which could both attract top industry talent and result in an efficient operating approach.
“We want to create a brand that people are drawn to. We want the current team members to have a high level of satisfaction so they’re all talking about how much they love working for this company and how focused we are on them as a whole person. We’re spending a lot of time talking about building trust and we’re leaning heavily into health and wellness initiatives,” he said.
To that point, Roby noted the company has imported additional talent since being launched, including some personnel from Evolution Hospitality. He also touted the company’s leadership team, which includes experienced team members such as Alie Gaffan, SVP of people and culture, who has been with the company for 31 years. He described her as an “unbelievable culture leader.”
In addition to managing the portfolio of hotels from Pacifica, Roby added the company is very much interested in expanding its portfolio through partnerships with other ownership groups. He added that maintaining sliver equity in select properties is also potentially part of the equation for Parable.
“We are out looking for like-minded, aligned owner partners. We really want to get away from this idea of talking about it as third-party management and really have them look at us as a strategic operating partner,” Roby concluded.