Chad Sorensen: Hotel Asset Management, Margins, and Guest Experience

Ask Chad Sorensen what wins in 2026 and he will not say growth; he will say execution and margins. This episode of the Distinguished Podcast was recorded on the road at the 2026 NYU International Hospitality Investment Forum in New York City, with guest host Kaushik Vardharajan, Director of Boston University School of Hospitality’s Real Estate Program.  

Chad is CEO of CHM Warnick, a leading hotel asset management and advisory firm, and vice chair of Boston University School of Hospitality’s Real Estate Advisory Council.  Tune in to hear this insider’s perspective on: 

• Using AI to find savings without compromising the guest experience 
• The risks in changing brand and manager at the same time 
• Advice for owners on making strategic capital investments 

The “Distinguished” podcast is produced by Boston University School of Hospitality Administration. 

Host: Arun Upneja, Dean
Producer: Mara Littman, Executive Director of Strategic Operations and Corporate Relations
Research and Content Creation: Lan Lu
Marketing: Anne Dawson
Editing: Isabella Laikin and James Leon

Music: “Airport Lounge" Kevin MacLeod (incompetech.com)
Licensed under Creative Commons: By Attribution 4.0 License
http://creativecommons.org/licenses/by/4.0

Transcript

Introduction: Chad Sorensen at NYU IHIF

SPEAKER_01 0:06

Ask Chad Sorensen what wins in 2026, and he will not say growth. He will say execution and he will say margins. This is the distinguished podcast from the Boston University School of Hospitality Administration. Recorded on the road at the NYU International Hospitality Investment Forum in New York City. With guest host Kashik Wardarajan, Director of a Real Estate Program.

Why sentiment is beating expectations

SPEAKER_01 0:32

Chad is the CEO of CHM Warnik, a leading hotel asset management and advisory firm, and vice chair of a real estate advisory council. He explains why the year ahead is won line by line on the PL, how his team uses business intelligence and AI to find savings without touching the guest experience, what is behind the wave of owners changing brands and manager at the same time, and how he counsels owners on where to put their capital. Let's get started.

SPEAKER_02 1:06

Alright, so this is the Boston University School of Hospitality Administration Distinguished Podcast on the road at the NYU IHIF conference. And I'm here

2026 is about execution and margins

SPEAKER_02 1:16

with our next guest, Chad Sorensen, CEO of CHM Warnik. Chad, thank you for making the time to join us.

SPEAKER_00 1:22

Great.

SPEAKER_02 1:25

I hope you're having a great conference.

SPEAKER_00 1:28

Absolutely. You as well. There's been uh a lot of enthusiasm on this first first morning, which is which is great.

SPEAKER_02 1:35

Yeah. What are you seeing generally in terms of sentiment?

SPEAKER_00 1:39

Uh I would say the sentiment is definitely more positive than you know than we were thinking, you know, way back in January in Alice. And I think that comes on the heels of a Q1 performance across the industry that was generally better than than anticipated. So I think after a couple years of uh uh of real challenges and you know most everyone looking forward looking into 2026 as a year where RevPar growth was going to be muted uh and actually seeing that it's you know at 3.5%, I think, through Q1 is really encouraging. We've got a lot of year to go. Uh but I think that helps with the way people are feeling around here today.

SPEAKER_02 2:23

Yeah, I think that's great news for everyone across industry. Uh you know, you previously stated that 2026 uh our success in 2026 isn't about growth, it's about execution, it's about margins. So can you talk to us about how you're going about it with your owners?

SPEAKER_00 2:43

Yeah, should I start with uh how I was wrong? Because I think that's the case, right? As I as I mentioned, it's been it's been a really good story so far. Uh our portfolio through Q1 actually saw a double-digit RevPAR increase. You know, we do feel we'll lose some ground uh over the the next three quarters, uh, but should absolutely find uh find ourselves with uh you know respectable RevPAR growth uh by the time we get the end of the year, at least that's now the the plan, I hope. That being said, with uh inflation uh being where it is at, uh you know, that negates the real growth uh unfortunately, uh, but we are seeing we are seeing growth. So I think we're you know what we are seeing is uh under the expense side, that has not taken our focus off, right? Having good top line, especially on the room side, uh has not taken away from the importance of really focusing on the the details of of the operation. And we've been talking about labor, labor wage rates, uh, et cetera, for the last few years. I'll say I believe it stabilized, I would call it last year. And as we work through 2026, it's been uh it's been predictable, is the word I would use for that. It's uh uh you know, labor is still costing us more than we'd like to pay, uh, but it does seem more predictable in this environment. So we spend a lot of time on other areas in in the business, right? Hotels are a really complicated uh business, uh, but the positives of that is that means there's a lot more levers you can pull and buttons you can you can push. So uh while labor is the biggest expense, you know, we're spending a lot of time uh on items below the line, whether

Protecting margins without losing the guest

SPEAKER_00 4:28

that's uh helping clients you know refinance uh their projects. We're we know we're definitely seeing more opportunity there. Insurance costs uh have stabilized to a degree in many markets, uh which has been which has been good to see. Uh there's always work to do uh when it comes to taxes. And then on the operating side as well, I think AI is starting to introduce some some really interesting uh solutions. Uh can't say that we're seeing a lot of you know a lot of impact at GOP yet, but I think we will we will see that. Uh you know, we continue to take the P ⁇ Ls apart line by line and really leaning into uh business intelligence, which we've we've been in that game now for for over 10 years, and as we've layered AI in over the last uh last probably 24 months, uh we are finding ways to cut expenses in ways that we really didn't discover before, uh, which is exciting. It's really it really is exciting to see how you know data and and technology can help uh help drive drive performance.

SPEAKER_02 5:35

Yeah, that's great. So I think one of the challenges or concerns at least is that in an attempt to protect margins, that we'll often it it seems like some people are going the other extreme and compromising on the guest experience, compromising on the basic service model. How do you stop yourself from doing that and how do you find that balance?

SPEAKER_00 5:58

Listen, if you're not taking care of the customer and you don't have a focused plan as an operator on that, uh, you know, it's going to be a really challenging year and you know and and beyond. Uh, you know, I don't think most of us didn't see what was coming out of COVID where our guest satisfaction scores uh had really plummeted. And it didn't matter the brand, it didn't matter the location, it didn't matter the the segment. Uh it was a big unintended uh kind of situation that we all found ourselves in. And so the the the good operators uh and the asset management firms like ourselves, we are absolutely dialed into uh the guest experience and you know, cutting your way to the bottom and trying to find ways to offset uh expenses if it's gonna impact uh guest satisfaction, I think is a very short,

The wave of brand and management changes

SPEAKER_00 6:50

short game, uh, and not the way to the way to look at this. Uh we've got to stay focused and and really it's you know it's kind of seen from all from through all lenses, the brands as well, right? The brands uh generally speaking have been working with owners to deal with what is probably the biggest issue out there, uh, which is CapEx and PIP and maintaining buildings to brand standards. Uh and the core metrics on that is guest satisfaction. If the guest is telling the brand and the owner that they're not happy with uh the experience or they're not happy with the quality of the product, uh the brands just aren't going to you know uh uh sit on the sideline and not push the the owners and the management companies. And so it it's definitely a push and a pull as we try to you know recover some of the GOP that we lost coming out of COVID. Uh but it's a sh it's a short game if you're trying to do that through expenses. You you know you need to double down and continue to find other ways to cut expenses. Uh but saying laser focused on guest satisfaction, uh it's is is really key to being successful long term, I think.

SPEAKER_02 7:56

Okay. I'm glad to hear that. Uh yeah. So Hama last year in the fall uh you know conducted their survey, which I thoroughly enjoy reading. And the survey shared that roughly about 25% of asset managers are seeking both an brand and management changes at the same time in their assets, right? That seems quite aggressive that you're making dual changes at the same time and that twenty-five percent of them are doing that. Why do you think that's happening now?

SPEAKER_00 8:26

That's uh an easy question with a really complicated answer because there are uh uh there are a number of factors, I believe, that that go into that. Uh kind of when when we talk with our clients uh on their acquisition strategy or just optimizing their you know their investments, um almost everybody is if you own the asset, you've you've had to rewrite your investment thesis. And when you rewrite that, uh you have to step back and take a look at uh you know what does the operating business require moving forward. And and a lot of times you know, going through that exercise will identify that you know maybe the property isn't branded correctly or may not be the right type of management company. There was you know just so much change in the world of management companies, you know, post-COVID. You know, the large brands, the Marriott's, the Hilton's, the Hyattes, you know, as we all know, they've expanded the number of brands that they have, uh, but they've also generally taken uh you know a step back from the type of assets that they need to manage, right? So they're still in the management business, but it's the key assets more than ever. And so what that's done is you know created this kind of what I call uh a frothiness in the market for third-party management companies. And uh and the the third party management companies, you know, they were hit hard during COVID, so they've had to rebuild their rebuild their companies as well. And so uh there I think there's just been all of these different dynamics that have changed. The brands getting out of management means there's more need for third-party managers, the third-party managers uh, you know, again, they they didn't see coming like we haven't, generally speaking, the shortage that we were going to have on the staffing front, and that's both at the line level and the management level. Uh and so you I think you're finding owners that don't have strong you know advisors, uh, i.e. the the asset management, uh they many times are ending up with the wrong brand or the wrong management company uh for the new investment thesis. And so that has led to, and I think will continue to lead to

Advising owners on capital deployment

SPEAKER_00 10:37

just you know churn in the space. You know, having the right brand, the right uh the right manager can absolutely be the difference of uh an investment being a success or not. And it's it's very expensive uh to pick the wrong operator uh and then have to change them out, say in a year or two or three years. You've not only lost that period of time, it's the disruption that comes along with making a change. So uh, you know, majority of owners don't take uh you know rebranding or uh you know changing up the management company structure lightly because it's really disruptive, and at the end of the day, that costs a lot of money as well. So I think we'll continue to see that though. I mean the transaction market, you know, obviously is is is heating up a little bit more, but they're gonna continue over the next several years to be a lot of deals where the the investment thesis is is underwriting it for an acquisition uh just looks different from a need perspective, which is gonna drive uh drive change. Brand management, brand and management. Uh you have to look at all those different scenarios.

SPEAKER_02 11:44

Okay. Yeah. And Chad, in in addition to kind of pro being an asset manager for specific assets, you're also a trusted advisor to a lot of these owners, and you know, you're and oftentimes they come to you asking you for your thoughts on capital deployment, if they have capital. What are you telling them? You know, how are you addressing kind of the buy, hold, sell kind of analysis or discussion? And what are you recommending owners do if they have capital today?

SPEAKER_00 12:12

Well, you know, it all begins with what's the objectives, right? I mean, that's one of the really interesting uh and kind of competitive advantages of running a third-party asset management advisory firm is we we have a very diverse group of clients that all have different needs. Uh at the same time, we have a lot of diverse assets and management companies and brands where we've got this really wide lens. And so it starts with a conversation around, you know, what is your investment thesis? What is your hold period? You know, what are you trying to accomplish? What are your goals? Uh and surprisingly enough, you know, you you've got a lot of individuals or groups uh that are maybe new to this space where they can't clearly articulate that. And so a lot of times we start at the kind of starting line with them, take them through that process and understand uh not only what they're looking for, but why are you looking for it? What's the what's the end of end objective? Uh and then we you know we are with them as their advisor and their expert throughout the throughout the process, uh, whether it's helping identify key

The $100 million question

SPEAKER_00 13:21

acquisition targets, uh, you know, there's you know the I would say there's as many deals getting done outside the brokered world than there is in the brokered world, and we're seeing a lot of assets come around the second, third time in the bro the brokered world. So you know part of it is being patient because there's so much capital out there, but being dialed in and what your strategy is and having a and have a platform in place to evaluate those deals that maybe fit your parameters. So we spend a lot of time on the analytics uh around the why uh instead of just the you know help us find an asset to buy. Uh and we we find ourselves as educators, honestly. It's just you know, we because we you know, like you say, we can touch a project all the way from cradle to grave, right? Somebody may come to us uh with an idea, a piece of land, a bag of money, and we can take them from that and help them execute on their on their vision, and there's just a lot of decision-making points uh uh along that along that path.

SPEAKER_02 14:28

Okay. So now Chad, my last question for you. So if you woke up tomorrow morning and you had a hundred million dollars in your bank and you had to invest that in the hospitality space, what kind of assets would you buy? What markets would you go buy in?

SPEAKER_00 14:46

Boy, that's a tough uh that's a that's a tough question. It goes back to my answer on the last one, right? What's what's the what's the strategy? What's the investment thesis? So what's yours? Uh what is mine?

SPEAKER_02 14:58

Um This is your own personal hundred million dollars.

SPEAKER_00 15:01

You know, I I again it it's it's uh while not uh not not sexy in that solid select service space uh is always uh you know less risky, I would say. But uh I I think from an acquisition standpoint or a full in the let me get back up. So I guess on the full service space, you know, it has to be an acquisition uh because development's just too expensive uh uh anymore. So uh I would say it's either solid, you know, solid uh secondary markets where I know there's things that we can do from the level of sophistication that our that our platform has that we can easily kind of outsmart the the market.

Closing thoughts

SPEAKER_00 15:42

Uh and I still think there's opportunity in the in the distress space, uh, but it's it's it's not gonna it's not gonna show up on your on your front door. You've got to figure out uh what's behind the scenes to be able to get into those types of deals, which I think we're you know we're pretty good at and we've had good success post-COVID. So I'd I'd probably take that uh that money and again kind of leverage uh my team's exposure and experience and and partners uh in the marketplace. Uh I do believe uh that all the prime air markets are going to come back. It's just a matter of time. I mean you said we've got the Portlands and the Seattles and the in the Minneapolis, but uh you know, in some of those markets, there's great acquisition opportunities when you're kind of buying by the pound versus by the by the by the cap rate. Um so I guess there's a the go back, it comes down to the strategy, right? And you know, I've got the money, what is the you know, what are you what are you trying to accomplish? I think there's there's multiple paths uh you could you could go down.

SPEAKER_02 16:49

Okay. Well, that's all we have time for. Chad, thank you very much. So this was uh Chad Surenson's CEO at CHM Warning. Great and vice chair of our real estate advisory council. So Chad, thank you for joining us.

SPEAKER_00 17:02

You're welcome.

SPEAKER_01 17:02

Thank you, Kashik. That brings this episode to a close. Thanks for joining us on the road at the NYU International Hospitality Investment Forum, and our thanks to our guests for sharing their time and insight. The Distinguished Podcast is produced by the Boston University School of Hospitality Administration. If you enjoyed this conversation, follow or subscribe wherever you listen and share it with a colleague or a student who would find it valuable. To learn more about our programs and the work coming out of the school, visit pu.edu slash hospitality. We will see you next time.