Dream Hotel Group (DHG), New York, had a few false starts under its previous incarnations as Hampshire Hotels Management and Debut Hotel Group. There were less-than-flattering family-related headlines, followed by the short-lived tenure of former CEO Eric Danziger, who announced several new brands before heading uptown to Trump Hotels. Enter new CEO Jay Stein, a seasoned hotelier with stays at Starwood, Hilton and others before working his way up to chief operating officer for Dream Chairman Sant Chatwal.
Just over a year into his new role, Stein seemingly has settled the ship by renaming the company once again, reorganizing and removing some brand concepts, opening a development and operations office in Bangkok and just recently announcing nine hotel developments with 3,239 rooms under the Dream, Chatwal, Time and Unscripted brands. With confidence, he suggests Dream Hotels will double in size from 16 hotels, predominantly via management deals, within a few years. These new properties and potential properties (with nine LOIs) could add 6,990 rooms to DHG’s portfolio, marking 229% growth from 2016 to 2020.
With a new strategy to manage versus developing and creating a large global development team for a smaller boutique operator, Stein said Dream will be able to up the ante on growth – starting with nine hotels across its brand portfolio, including Dream-branded hotels in the Maldives and Delhi; a Chatwal in the Maldives and an owned Chatwal in Bethel, New York; and Unscripted hotels in Vietnam, the Dominican Republic and Long Island City, New York. This news comes along with six hotels and 1,124 rooms currently under development – three of which open this year: The Dream Hollywood (California), an Unscripted in Durham, North Carolina, and Dream Oceanami Villas & Spa in Vietnam.
The global growth plan is pretty aggressive for a boutique operator with a corporate office of about 40 people. “With the Bangkok office, it takes a lot of pressure off the New York team,” Stein said. “It makes it a lot easier for the New York team to focus elsewhere… The only project we have in Europe now is in Birmingham (England), and that deal is just getting announced now. But, you know, it’s no further a flight there than it is to L.A. from New York.”
What generates Stein’s confidence is owner excitement to work with a company that is committed and sees food and beverage as a real opportunity for profit as well as chance to drive social interaction into the buildings, which in turn drives higher demand and ADRs. “There’s no real expense associated with people that want to pay an extra ADR because they like the environment in the hotel, and that’s the hot spot where people want to be,” he said. “That’s our formula.”
Stein said DHG is spending north of US$10 million a year to drive growth. While it has fees coming in, it is running at a deficit today. “The break-even point is getting close in 2018 and definitely in 2019,” he added.
DHG still would develop on its own or with partners to get into markets such as London and San Francisco and is even considering franchising its Unscripted brand down the road. In fact, Stein says DHG already has approvals for franchising Unscripted but will wait until 10 to 15 are operating before reaching a comfort level.
In the meantime, the 61-year-old Stein, who also plays in a rock ‘n’ roll band when time permits, is very happy working with Sant Chatwal. “He’s one of the few people in the world that has even more energy than I have. He’s so committed to the business; that’s what he loves doing,” Stein added. “The only day of the week he’s not happy is Sunday, when the phone isn’t ringing.”