1.The Dream Hotel Group has gone through some recent change: Eric Danziger, your predecessor, left after only about a year on the job; the name Debut Hotel Group was scrapped in favor of Dream Hotel Group; and some brand names that were launched have now been abandoned. What, then, is the overall stability of the company?
Jay Stein: We had a few too many things out there for us to be focused and to do really well. When the company was handed over to me it was: ‘What are we going to do to keep things going forward?’ We started to drop off some of the non-core aspects, such as asset management, third-party management and a WeWork concept we had been working on, which was a great concept but just too big; it needed its own team. All of these viable things, but a little outside of what our core competencies were.
We put our focus on four brands: Dream, Time, Unscripted, Chatwal. We need to do what we do well first, and be meaningful to consumers and developers of what our core is.
2. Now that you’ve identified the core strengths, what is your overall strategy to drive growth?
Stein: We are looking to grow primarily domestically—that’s where our strength is. The four brands cover a great spread of the market. Dream has the biggest start, but Dream is somewhat limited. I’d say nine out of every 10 developers we speak to, the projects they’re bringing to us can’t be Dream, whether it’s in the wrong location or physically the building just can’t accommodate what the requirements are to be a Dream.
That’s where we needed Time to fit in, where you could have a great sophisticated lifestyle hotel. That could be a Time, but that would never make it as a Dream. The Time opportunity can fit into like 100 different cities in the U.S., and probably 200 or 300 around the world.
As much as we want to grow the luxury part, that’s the least of the assets that we’re going to have the chance to grow in big numbers. We thought The Chatwal was fine (there was the idea to change the brand name to Augustus). The fact that we had The Chatwal in New York already open—and it is one of the great hotels certainly in the city and even in the world. We thought it really didn’t make sense to change.
3. There’s so many brands, so many choices for customers and so many choices for developers, too. What is your pitch, then, to developers? Especially Dream, which is a domestic and international brand with a hotel opening in Doha, Qatar, in 2019.
Stein: When developers look at their options for lifestyle, there’s only a handful of brands that do what we do. We’re a company that when you call, we pick up the phone—you get to me easy. Developers love that.
For developers to see us go head to head with hotels in a city like New York, they take notice. That gets our foot in the door. Sometimes they think we are just New York centric and not going to make sense in Nashville or Dallas. When we meet with these developers, we explain the vision: to be the best, hottest, hippest, most fun lifestyle hotel in any market we’re in.
We are looking at deals right now, meeting with owners in Milan, in Rome, in Barcelona. These are some of the European contacts that we have. There’s nothing signed, but specific deals that we’re working on in the U.S., too. Certainly Austin [Texas] is a market that we’re really hungry for.
4. Unscripted is a carryover from Debut Hotel Group and fits in the upper-midscale category. You give the comparison that Unscripted is to Dream like Aloft is to W. You have one scheduled to open in Durham, N.C., in 2017. What’s the potential?
Stein: To start a brand from scratch is not an easy thing to do and we’re in the process of doing that right now. We are putting a lot of effort into it and have a couple, besides Durham, that we hope to announce over the next six months. It’s going head to head with Aloft and Courtyard. Maybe a 75-room Unscripted makes sense, but more often than not they’re going to be 150 to 250 rooms. The brand makes sense in great secondary markets. Marriott’s doing it with Courtyard, and the living room thing. I don’t think they really do it like we do. We’ve got to prove ourselves, so we have work to do.
5. Your Dream Downtown flagship in New York is currently being marketed by embattled owner Sahara Group. What are the ramifications once the hotel is sold?
Stein: We still have an equity position in that hotel and a long-term management agreement that really can’t be canceled. When we build them ourselves and sell them, we’re in control of how we structure those deals going forward. Whatever partner comes in is going in knowing that we’re the partner and it’ll stay Dream for many years.
We’re excited about what the future’s going to bring for that hotel. We don’t see this as a negative; it’s something that we knew would be coming.