Commune, Destination share common goals
26 JANUARY 2016 9:26 AM
Commune Hotels & Resorts’ Niki Leondakis and Destination Hotels’ Jamie Sabatier said that while the pending merger of their two companies will lend benefits on the back end to owners and employees, the two companies’ brands, identities and commitment to unique experiences will not change.
LOS ANGELES—Just a few days after the planned merger between Commune Hotels & Resorts and Destination Hotels was announced, company principals Niki Leondakis and Jamie Sabatier said the combined company would lead to back-end benefits to owners and employees.
The two executives told Hotel News Now during a break at the Americas Lodging Investment Summit Monday that the unification of the two companies will accomplish several key goals: drive return for owners; offer more choice for guests; and give employees increased opportunities.
“This deal works wonderfully for the whole ecosystem,” Sabatier said. “It gives our team members a great platform for career growth, training and development. Our owners will now be able to pick and choose a brand or an independent solution.
“The ability to cross-sell, to drive enhanced revenue to every property and get scale, this will have cost benefits to our owners. We can do something here that’s exciting and differentiating that leverages our strengths.”
Destination operates more than 40 independent hotels and resorts around the country, and is a privately owned subsidiary of Lowe Enterprises. Commune operates more than 45 hotels in North America, Asia and Europe under the Thompson Hotels, Joie de Vivre Hotels, Tommie, and Alila Hotels and Resorts brands.
Sabatier and Leondakis stressed that the new company’s brands will remain intact, noting the two portfolios have little overlap in terms of offerings and guests.
“When you look at our portfolios and how they come together, there’s a wonderful marriage of our differences and our areas of expertise. Now the combined company has a stable of brands and independents that offers guests the complete vertical,” Leondakis said.
Leondakis said the goal of the pending deal isn’t about blending brands, but more about back-end merging.
The combined company will be based in Denver, with offices in San Francisco, New York City, Singapore and Shanghai. Over the short term, Leondakis and Sabatier said management already is focused on integrating systems that can drive immediate value for owners, such as sales and marketing.
“It’s imperative that the integration allows us to enhance what we’re doing from a cross-selling standpoint,” Sabatier said. “Destination has had a lot of success on the group side and Commune’s had a lot of success from a transient point of view. Our sales-and-marketing and revenue-management folks are already starting to work together.”
Honing in on brand differentiation and employee satisfaction will be a top priority as well, Sabatier said.
“We need our owners to see us delivering and our team members as well,” he said. “Whenever there’s a change there’s uncertainty, and it’s important we have a smooth path for all our team members.”
A commitment to unique
Sabatier said the unifying theme between both companies is “locally relevant, locally authentic, inspiring service experience permeating throughout.”
“We both believe in creating unique experiences and creating hotels that are unique,” Leondakis said. “We share a common DNA around a passion for hospitality. Today, (the hotel industry) has become so much about competing with (online travel agencies), competing with Airbnb and asking, ‘How do we fight the big guys?’ We felt the passion of hospitality was going away.”
“We’re focused on accentuating each of the brands, but what’s going to bring them together is that real understanding of the importance of making people feel part of the locale,” Sabatier said.
Moreover, Leondakis said the planned merger isn’t “about trying to compete with OTAs or home-stay platforms.”
“The best way to compete with the Airbnbs of the world is to be better at the art of hospitality, and that’s what we both share—a passion for the guest experience,” she said. “If we continue to hone that, it’s the best way to compete.”
Loyalty program in the works?
Down the road, Leondakis said the company will focus on marketing its full portfolio to offer guests the wide range of choices at different price points and locations. Part of that will be building a new loyalty program that reflects the unique, experiential nature of the company.
“We don’t want to do a traditional loyalty program driven by miles and points; that just adds excess cost,” she said. “Plus, we think today’s traveler is more driven by value in experience, so we’ll endeavor to create a program that’s more about enhanced experiences.”