What’s next for Next? Expanding its 37-hotel roster
What’s next for Next? Expanding its 37-hotel roster
21 NOVEMBER 2018 9:29 AM

Next Story Group’s newest executives plan to grow the company’s hotel portfolio primarily through its Next and Sage brands, in addition to a shared-workspace brand called Kafnu that will include some accommodations.

HONG KONG—The next chapter for the Next Story Group is to add to its 37-hotel portfolio primarily through its Next Hotels and Sage Hotels brands.

Singapore-based NSG also is going full speed ahead with its Kafnu shared-workspace brand that at some locations will include hotel accommodations.

The management and branding company, known as Silverneedle Hospitality Group from 2011-17, in March hired two executives to lead the growth story:

  • Darren Edmonstone, formerly the managing director and EVP of Asia-Pacific for Outrigger Resorts, as CEO of the Next Hotels & Resorts division; and
  • Andreas Flaig, formerly with Radisson Hotel Group and JLL, as group chief development officer.

“When I spoke with (NSG Group CEO Anand Nadathur), we very quickly had the same opinion of where the hotel company could go and where the brands could go,” Edmonstone said during a break at last month’s Hotel Investment Conference Asia Pacific. “It is a family-owned company. It hasn’t got the corporate overlays that a lot of the big brands do, so we’re able to shape the company into the direction that we want it to go. We can create something very special.”

Edmonstone said he and his executive team are in the midst of reshaping the plans, but one thing is clear: With the vast majority of its portfolio located in Australia under the Country Comfort, Chifley Hotels and Sundowner hotel brands, Next Hotels is looking to expand into other areas of the Asia-Pacific region.

“The focus with the pipeline is on the core brands of Next and Sage,” Edmonstone said.

Next has five Sage properties open and one Next Hotel in operation.

“Asia is obviously a very important market for us,” Flaig said. “We do want to bring the brands into Asia—initially Southeast Asia, but we also see opportunities beyond that.”

Edmonstone said the company is “looking to add a few more hotels in Australia … but the real focus for us is all about Asia.”

It makes sense for Next to target Thailand, Indonesia and Japan because they have such large development pipelines, according to Flaig.

“These are also markets where we already have some presence,” he said, noting that NSG has two hotels in Bangkok as well as a joint-venture project under way in Colombo, Sri Lanka.

The company would like to add 20 hotels to its portfolio during the next five years—a 50% growth rate, according to Edmonstone.

“That growth would primarily come through leasing or management—at least in the near future, that’s what we’re focusing on,” Flaig said.

Next’s hotel pipeline includes a project in Colombo, in which it is a 50% joint venture partner, scheduled to open in 2019. The Colombo City Center project incorporates an international-standard shopping mall, a 167-key Next Hotel and high-end residential, Edmonstone said. It will also be the company’s first hotel to incorporate the Kafnu concept.

The company is also developing a leased Next Hotel in Melbourne, Edmonstone said.

The CEO said the Next Hotels brand will be categorized in the upper upscale segment and will focus on innovative offerings and guest experiences anchored by simple luxury design.

“We don’t say we’re luxury, but it will be design driven,” Edmonstone said.

Brands in its competitive sets will include Unlisted Collection, Ovolo Hotels and QT Hotels, he said.

“They are city-center hotels, so they are attuned to business traveler—a lot of our business is corporate business,” Edmonstone said.

The Kafnu concept includes accommodations
NSG’s commitment to business travelers is extended through the launch of its Kafnu shared-working space. The company calls the brand “an urban village or the new generation of creators” as it plays off the growing trend of people wanting office space in a shared environment. Its goal is to have a mix of Kafnu locations in hotels and as standalone businesses, according to the executives.

“If it’s in our control, if we’re taking on a lease, we would certainly promote (placing a Kafnu in one of its hotels),” Edmonstone said. “If we’re doing management contract and the owners don’t want to, we can go in a different direction.”

Flaig said added the company’s preference is to integrate Kanfu “if we find a hotel opportunity and the space allows.”

“On the flip side, we’re also pursuing space opportunities, real estate opportunities, for Kafnu exclusive of hotels. We don’t necessarily have to have the hotel and the infrastructure to make it work, but of course we see the synergies between the two brands and the guests,” he said.

As with the newly opened Kafnu Hong Kong in The Kerry Hotel, the spaces don’t have to be located in hotels controlled by Next Story. Standalone Kafnu locations can include their own accommodations components, Flaig said.

By the end of the year, there will be five Kafnus open, including three with accommodations, the executives said.

“It’s not a 100% requirement, but if licensing and real estate allows us to, we have very much a strong preference to include as it an amenity—as one element of a Kafnu/accommodation,” Flaig said, adding that those instances will have between 15 and 30 guestrooms. “It’s not a large amount, it doesn’t represent a very large component of a Kafnu, probably 20 to 30% of the total space, but we think it’s a differentiator.”

The growth model for the Kafnu concept is a hub-and-spoke approach. The hub locations would ideally have accommodations and an on-site restaurant, Flaig said.

“In any given capital city, we would like to have at least one Kafnu hub—a fully amenitized version with all the components we want—and we’re supplementing that with two or three spokes in the same city to allow members ease of use and to tap into the network in a given city,” he said.

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