Two Roads’ pipeline full of new-build hotels
 
Two Roads’ pipeline full of new-build hotels
19 MARCH 2018 8:23 AM

Two Roads Hospitality has several new-build projects in the works, including Thompson-branded hotels in Texas, Los Angeles and Washington, D.C., and a Joie de Vivre and Destination hotels in California. 

DENVER—Two Roads Hospitality recently celebrated its two-year anniversary, and coming off a big 2017, CEO Jamie Sabatier said the company is “moving forward in 2018 fully aligned.”

This year, the company is moving forward with a full slate of new-build hotel projects and conversions, both in the United States and overseas, most notably in Asia.

It’s all part of the company’s continued goal to grow into a fully unified single company, following its 2016 merger of Commune Hotels & Resorts and Destination Hotels.

“We’ve put a lot of work into bringing (these two companies) together and making it happen,” Sabatier said. “We really represented that in 2017—as a portfolio, we gained four points of market share. In 11 out of 12 months, we gained share. Every brand gained share.”

Today Two Roads has 88 properties (16,909 guestrooms) in its global portfolio, 71 of which are in the U.S., comprising 15,041 guestrooms.

Sabatier called 2017 the company’s “biggest development year, both in North America and Asia.”

“This past year saw quite a bit of growth for various brands under the Two Roads umbrella,” he said. “In spring 2017, Joie de Vivre introduced its first hotel in New York, with the openings of Hotel 50 Bowery in the heart of Chinatown. Alila Hotels & Resorts entered the North American market for the first time in October with the opening of (Ventana Big Sur-An Alila Resort). And upcoming openings include the launch of three Thompson Hotels across Texas.”

Hotel projects in the works
Sabatier said the company is engaged now in both short- and long-term goals to continue to grow its footprint. While there are exceptions, he said that “if you look at our portfolio, most Thompson and Alila hotels will be new-build, while Destination and JDV hotels will continue to be a fair amount of conversions with some new-builds.”

On the conversion front, he said one of the company’s strengths is “taking over existing properties where owners want to see improved performance. We already have a couple slated for the first quarter of this year.”

Looking out longer, Sabatier cited several new-build projects in the works that will continue the company’s momentum.

“If you look at our pipeline, 2019 and 2020 will see a significant number of new-builds coming online,” he said.

Texas will be home to three of those upcoming projects: Thompson Hotels-branded properties in Dallas, San Antonio and Houston.

Dallas is a “complete gut” conversion and the other two are new-builds.

The Dallas project is under construction as a complete conversion of the city’s former First National Bank building and is part of a mixed-use development called The Drever.

“We do a lot of adaptive-reuse deals, and I take great pleasure and pride in them,” Sabatier said.

The Thompson San Antonio, owned by DC Partners, broke ground in January. The Houston Thompson hotel, set to break ground soon, will also be part of a mixed-use development, the Buffalo Bayou project in Houston under development by DC Partners.

Earlier this month, the company announced another new-build Thompson-branded hotel would break ground in Washington, D.C., slated for a 2020 opening. The Thompson D.C., developed by Geolo Capital and JW Capital Partners, would add 225 guestrooms to the city’s The Yards mixed-use development.

Also in the works: The new-build Thompson Hotel in Hollywood, which broke ground last March, from real estate developer Relevant Group.

And don’t forget the debut of the company’s long-anticipated Tommie lifestyle brand, under development near the Thompson Hollywood site.

“My sense is we’ll have the Thompson complete in 2019, and then later in 2019 we’ll have the Tommie,” Sabatier said. “We’re plugging along, and it’s a matter of getting through some of the typical development challenges you face in Los Angeles and California as a whole.”

Despite those challenges, California has long been a key state for Two Roads brands, and it will continue to be that way, Sabatier said. The company in January announced two new-build oceanfront hotels in the Southern California enclave of Oceanside, near San Diego.

The adjacent hotels, developed by S.D. Malkin Properties, will operate as JDV and Destination hotels.

“It takes the patience of Job to get entitlements on a property in California close to the beach, and to S.D. Malkin’s credit, they got it done,” Sabatier said. “We’re excited. We don’t have many situations where we have a JDV and a Destination right next to each other. The properties combined will have about 400 rooms. The Destination will be more oriented to the meetings customer, and the JDV will be more in a resort setting, but urban in feel.”

One fun fact about the JDV hotel, Sabatier pointed out, is that the property includes local icon the Graves House, also known as the “Top Gun” house, where Charlotte Blackwood’s character lived in the 1986 movie. It will be restored and launched as an F&B outlet.

What’s next?
As the company continues to expand, Sabatier said he always has a list of markets he would like to be in and is actively working toward.

“We’re working on projects in Atlanta—we think that would be a great market for us,” he said. “We want to be back in Miami, so we’re working on opportunities there. Boston too—we have a strong New England resort presence, and we’re well-represented in New York and Washington, D.C., so we feel we can be successful along that Amtrak corridor. And we’ve been looking at opportunities in Portland.”

This spring, the company is slated to open Hotel Revival at Mount Vernon Place, a Joie de Vivre hotel. In Baltimore.

Outside of the U.S., Two Roads has 23 Alila-branded hotels slated for openings throughout Asia in 2019 and 2020.

Still, he stressed that mindful growth is the company’s top priority.

“In general terms, I would say each one of our brands is underpenetrated geographically, relative to our competitors, so we see a path forward for each brand to grow,” he said. “But we want to be sure that when we grow, we grow purposefully—being smart with owners we work with and projects where we can add real value.”

At the end of the day, Sabatier said service is what sets Two Roads apart.

“Everyone loves lifestyle, but I’m starting to see that the average customer is starting to understand the difference between a hotel that has a fancy design and celebrity chef and a hotel that has those things plus an experiential feel—that combination of experience and service that makes people leave and say, ‘this hotel has a real soul,’” he said. “For a while, people had the notion that lifestyle simply meant celebrity clients, but that’s not it. It’s about being treated well and having experiences that make us feel good.”

“Taking that further step of immersion into the location and having service experiences that make people feel great—those are the differentiators,” he said. “It’s easy to talk about but hard to do day in and day out. It’s all about every interaction and creating those memorable experiences.”

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