Under CEO Jay Stein's stewardship, Dream Hotel Group has been in expansion mode, and well outside the confines of the U.S. Consider the UK, where Dream has a deal in place with London-based Ciel Capital to bring its lifestyle Unscripted brand to Birmingham in 2020. At the time of the announcement, in October, Stein referred to Birmingham as "one of the most ethnically and culturally diverse cities in the United Kingdom, and therefore an ideal destination for the Unscripted flag." The first Unscripted hotel opened in Durham, N.C., in the U.S., a city that is not so different from the likes of Birmingham, a secondary market to Charlotte some two hours away, but also with the kind of hip factor akin to a Birmingham.
Also in October, Dream Hotel Group signed its first hotel in the Philippines, with the 220-room Dream Carabao Island. The property will be the seventh hotel to join Dream Hotel Group’s expanding Asian network.
Dream Hotel Group plans to open another five Unscripted hotels in new destinations worldwide by 2020. The company is also looking to sign another 30 hotels and resorts worldwide across all its brands—Dream Hotels, Time Hotels, The Chatwal and Unscripted Hotels—over the next four years.
At the International Hotel Investment Forum, Stein will take part in a March 7 session titled: "The Ideas Factory—Sharing Thoughts on the Future of Hospitality." Panelists will share their views on the major trends and concepts that will impact hospitality developments and the guest experience in the coming years, including new lifestyle concepts, room and hotel design and amenities.
Ahead of the conference, we caught up with Stein to get his takes on the current state of the hospitality industry and his company's place within it.
1. What hospitality trends and storylines will dominate discussion at the International Hotel Investment Forum and why?
The major storyline for us is a continued and growing demand for our type of product—a lifestyle experience. It used to be that boutique hotels only worked in the big coastal cities like New York or Los Angles, but now the whole country, coast to coast and everything in between, is also moving toward this lifestyle.
As the lifestyle hotel segment continues to grow, evolve and adapt, and not just in primary markets, but in secondary and tertiary markets, too, more and more investors are getting onboard. Many of these cities have been neglected in the lifestyle boom—and with no good reason behind it. We plan on capitalizing on that oversight.
2. What are the markets/countries that you are looking at for future development and what makes them an attractive investment?
We signed more hotel deals in the last 12 months than any other year in company history and expect to sign another 30-plus deals over the next five years, tripling our portfolio by 2022.
Looking ahead, we’re going to remain aggressive with a focus on major metropolitan cities and secondary markets across North America, Europe, Asia and the Middle East. We’ve become a major player in New York and Miami, but targeting emerging markets like Durham, N.C., where we recently launched our new Unscripted brand, allows us to function globally while investing locally.
We have 18 hotels open today—primarily in the U.S. and Asia—and another 16-plus in the pipeline worldwide, including Dream Nashville (set to open in Nov. 2018), Dream Dallas, Dream Palm Springs, Unscripted Austin, Unscripted Dallas/Fort Worth, Dream Doha [Qatar], Unscripted Birmingham Central Hall [UK] and Dream New Delhi [India], to name a few.
3. With so many brands in the marketplace, what makes them a success and are they differentiated enough in the market? Do both customers and developers understand the differences?
Brand equity is incredibly important in hospitality, as travelers seek what they know and know what they want. One of the interesting dynamics we’re seeing is how national and international brands have found a way to build local connectivity and establish sub-brands that are differentiated by traveler type. That’s what makes a success—the standards expected in an international brand with a unique local twist.
That said, the market for brand selection is very competitive for lifestyle hotels. We feel the best way to cut through the clutter is with a highly differentiated product that gets people talking… and spending, driving money to the bottom line.
For a relatively small brand, Dream casts a large halo in a brand sense. This level of cachet and brand equity creates a huge groundswell of brand advocacy. When people trust and love what a brand does and what it represents, it’s easy to connect the dots back to the entire group. We do this by bringing the same level of creativity, service and experience to all our hotel brands.
4. What are the strategies hotels are employing now to boost revenue and curb costs?
Cost and revenue models are what can propel one brand to success or kill another. For us, F&B is everything. I always say that we are building the hotel’s ethos first for the surrounding community. If we build something that our neighbors love, the transient guest will too because everyone wants to get a feel of the locale.
F&B was once viewed as a necessary evil—a guaranteed loss leader—but we’ve always viewed F&B as an opportunity. In many of our locations, the food-and-beverage component accounts for at or more than 50 percent of gross revenue.
For example, we opened our west coast flagship Dream Hollywood in July 2017 with six dining and nightlife venues. F&B does close to $1 million a week in revenue at that hotel. It’s great to have food and beverage that’s exciting and profitable, but it also adds to the ADR. When people make Dream their hotel of choice because it’s a fun place to stay and there’s a lot of energy, they’ll pay that small rate premium because they want to be there. That $20, $25 or $35 premium isn’t a huge number for lifestyle hotels, but when you multiply it by 80 percent occupancy on 178 rooms, 365 days a year, that’s a couple million dollars in revenue with no expense associated with it. That’s a great benefit in the kind of hotels we run.
5. How has the role of new technology, home-sharing disruption and online travel agencies impacted your business?
Technology is paramount. Consumers today are living increasingly connected lives online and that doesn’t change when they travel. Hotel guests want a consistent and seamless experience at every touch point: before, during and after their stay.
We’re actively looking for ways to integrate AI (Artificial Intelligence) into guestrooms safely and securely. For example, we’re piloting Alexa and Amazon Echo at The Time Nyack (N.Y.), and we’re seeing seen a really positive response from our guests. We’re also working with ALICE and the Google Development Team to pilot Google Home in Dream Downtown (N.Y.) and looking to integrate Google Home voice commands through Alice for guest service requests and their GoConcierge platform.
We’re also upgrading in-room technologies to include BYOD (bring your own device) capabilities across all our hotels. Also known as “casting” via Apple TV, Roku, Chrome Cast, etc., our goal is to have the guest use their own device for in-room entertainment and make it a seamless and frictionless experience during their stay.
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6. What has been keeping you busy in the past year and what will you be focusing on in the year to come?
We opened two new hotels last year: our west coast flagship Dream Hollywood and the first location of our new Unscripted Hotels brand in Durham, N.C. These projects, along with several new investments, have certainly kept us busy. Further building on our new business strategy to manage versus own, in addition to creating a large global development team, we’re upping the ante on growth. With 18 hotels open today and another 17 in the pipeline, I’m proud to say Dream Hotel Group now boasts its strongest portfolio ever. There’s plenty of work ahead, but the future is bright!
The International Hotel Investment Forum (IHIF) is March 5-7, 2018, at the InterContinental Berlin. For more information, visit www.ihif.com.