CEO Jay Stein says Dream Hotel Group is searching for more growth opportunities around the world. Europe is one of the company’s high priorities.
BERLIN—Dream Hotel Group CEO Jay Stein has his sights set on further global expansion, including a much more robust presence in Europe for the New York-based hotel management company.
DHG has 17 hotels open and 16 in development, including its first in Europe—an Unscripted-branded property in a former Methodist Church in Birmingham, England.
“We have one and we’re looking for opportunities,” he said during a break at the recent International Hotel Investment Forum. “London, Paris, Madrid, Rome ... we have a few front-burner items but nothing signed.”
Dream Hotel Group
In late 2016, Dream Hotel Group hired Jason Wischhoff as VP of development for Europe and Africa to help the company better understand the hotel environment on the continent, Stein said.
“They don’t do deals the way we do in the (United) States,” he said. “There are a lot more lease arrangements. We’re starting to get used to what that takes, but our preference is to find the traditional management deals that we’re familiar with in the States.”
There are many opportunities for DHG to expand in Europe, the CEO said.
“We could have 150 to 200 properties that would make sense in locations,” he said. “Thirty to 50 signed in next 10 years would be a success.”
Stein stayed at the 25hours Hotel Bikini Berlin while attending IHIF and said the smaller rooms featured in that property as well as the social atmosphere are what European travelers desire.
“Europe is hungry for that kind of product,” he said. “Everything tends to be a little smaller. You’re restricted on number of floors in many European areas.”
Dream is comfortable developing a 100-room hotel but prefers to handle properties that have approximately 150 guestrooms, Stein said.
“It does limit some of the returns to the investor once you get below 150 unless you are doing a very high ADR,” he said.
The DHG portfolio includes four brands it plans to keep developing:
- Dream Hotels, with six hotels open and nine more in various stages of development;
- Time Hotels, which has two properties open and one in development;
- The Chatwal, which has one hotel open and two in development; and
- Unscripted Hotels, with one property open and five more in development.
Dream Hotel Group also has two hotels branded as “Night” in New York, the Heritage House Resort California, and four other hotels that it refers to as “legacy properties.” The company was founded in 1986 when Sant Singh Chatwal purchased the Best Western President Hotel on West 48th Street in Manhattan. Chatwal is chairman of the board at DHG.
The Dream brand is upper upscale that requires at least four food-and-beverage outlets, Stein said. It typically has up to 35,000 square feet of public-space amenities.
“Our other three brands don’t require as much—they could have it but don’t require it,” he said.
While Dream, Time and Chatwal thrive in primary urban and resorts locations, Unscripted can work in those areas as well as secondary locations, he said.
A big shift in strategy
Dream Hotel Group officials are happy to have the legacy properties in the company’s portfolio, Stein said, but during the past five years DHG has shifted from being an ownership company to a management company that is focused on expanding its brands.
“We are a small company but have big aspirations,” he said, adding that DHG has 18 management agreements signed for hotels that will open during the next two years. “Very rarely are we developing hotels ourselves anymore. We prefer to work with developers around the globe.”
That transition came with a dramatic realization, Stein said.
“I told our chairman that for this to be successful, we’re going to have to make a lot of other people a lot of money,” he said. “We sat awhile, took the idea and took our time to make sure it was the right move for us. To grow in this manner we’re going to have to have other developers reap the rewards.”
Stein said one-off local developers and smaller groups are Dream’s bread and butter.
“We’ve been able to go head-to-head with biggest brands in certain markets and prove we can do a lifestyle hotel as well as they do, and perhaps better,” he said.
Creativity on the F&B and nightlife side of things is one of Dream’s primary calling cards, Stein said.
“That’s been big part of the selling point,” he said, adding that the company’s latest addition—the Dream Hollywood—exemplifies that approach.
No formula desired
The company is seeking opportunistic developers who want build a cool hotel outside of mainstream options, Stein said.
“They are looking for a solution—they’re not operators and they’re certainly not brands—so they want something unique that they can count on,” he said. “Our philosophy has always been to build the most fun, most exciting hotels in that market.
“We really don’t bring a formula—we look for the right solutions for that market,” he added. “We want to have the right amenities for the community that we’re in … the hotel guests generally love there is action and locals using the facility. That’s what creates the magical energy that Ian Schrager created 20 years ago, and what we’ve been building on.”
Great lighting, technology and artificial intelligence components that adapt to the latest trends are highly regarded at DHG properties, Stein said.
“It all has to be intuitive to the guest,” he said. “That’s where voice-recognition technology is a big help, but it’s got to be easy. To order roomservice through these isn’t easy, but to say ‘make my room cooler’ or ‘turn on CNN’ is easy.”
Content casting—which allows a guest to put their own content on the in-room television—is another trend that DHG is keen to address, Stein said. Three of its properties have adopted the technology.
“We’ll never be first in technology … we don’t have that ability,” he said. “But we want to be among the early adopters of forward-thinking technology that makes things better for guests.”
All of this adds up to Dream Hotel Group’s global expansion. While it’s footprint in the U.S. is solid, the company is also looking for opportunities elsewhere, the CEO said.
“We’re equally as opportunistic in Asia and the Middle East,” Stein said.
Abid Butt, the former CEO of Banyan Tree Hotels & Resorts, now serves as Dream’s CEO for Asia Pacific, Middle East and Africa.
The company has two hotels open in India, one in Bangkok and one in Phuket. It has signed deals for properties in the Maldives and the Philippines.
“These things take two to three years to open,” Stein said. “These are great markets for the types of hotels we offer.”
Becoming global has made it more difficult for DHG to spread its resources, but embracing technology makes that process less mysterious than it once was, he said.