Dream Hotel Group CEO Jay Stein shared his company’s plans for growing its global footprint while staying true to its commitment as a lifestyle hotel company.
LOS ANGELES—Dream Hotel Group has picked up its development pace, opening up new hotels and signing new deals for properties that should open within a few years.
CEO Jay Stein sat down with Hotel News Now at the 2019 Americas Lodging Investment Summit to talk about his company’s new deals, his vision for Dream Hotel Group moving forward and what it means to be a lifestyle hotel company.
Dream is continuing its entrance into the Catskill Mountains area with its second project, the Unscripted Catskills in Bethel, New York, Stein said, which is about two to three miles from its first project in the area, the Chatwal Lodge. While its first hotel in the area will be a luxury property in the wilderness, the Unscripted is an upscale property and near a main road, allowing it to hold larger events and provide additional keys to the Chatwal Lodge, he said.
The company is using robotic modular construction to build the Unscripted property, Stein said, making it quicker to market than regular modular construction. The guestrooms are being built in a manufacturing plant about the size of a football field that completes a hotel room every four hours, and there are only about 15 people working in the whole complex.
The Dream Nashville opened a few weeks ago and is going through the preview stage before its grand opening on 7 March. It has a live music venue with what Stein described as a hipster takeaway sandwich concept, a dive bar, signature American brasserie restaurant and a coffee bar. The property is in Printers Alley, and it’s the fifth lifestyle hotel to open there within the last 12 months after not having a single one just a year ago.
“It’s pretty amazing to see what’s going on in that area,” he said.
Deals and development
Dream Hotel Group has 19 deals that are signed and open currently, Stein said, and some of those are legacy deals from before the company became a brand and management company. Of the 19 hotels open, 12 are existing brands, while others are different legacy projects, such as a Days Inn and two Night Hotels in New York City.
The company also has a number of deals signed that should open within the next two to three years, he said. A majority of those projects are owned by other entities, while four will belong to Dream Hotel Group.
“We’re excited,” he said. “This year I would venture to say we’ll probably do about one-and-a-half deals a month. So maybe in addition to the two we have announced this year, we may announce another 15 deals this year.”
Stein doesn’t have a specific target in terms of portfolio size, but he noted the company must grow and generate more fee revenue to justify the investments made so far. He said the company will be in a more comfortable position once there are 10 or more new properties up and running.
“I wouldn’t be surprised if we get to 200 to 300 properties in the next five to six years,” he said.
The company is looking at every international market, Stein said, adding that Dream has an international team looking in particular at growing in the Asia/Pacific and the Middle East/Africa regions. The company is involved in the Maldives and Bali and all of the primary Asian markets and some great secondary resort areas. In the MEA, the company has projects in Doha, Qatar, and Dubai, United Arab Emirates, and is active in Israel looking for a deal.
Dream Hotel Group has an Unscripted project in Belgium in a royal forest as part of a 500-room recreational village concept, he said. The property will be roughly an hour from the big urban locations, and is accessible by train from London, Paris and Amsterdam and a 20-minute shuttle to the resort.
The company signed three deals in Mexico over last year: an Unscripted in Tulum, a Chatwal in San Miguel de Allende and a Dream in Valle de Guadalupe,* and executives are already looking at additional sites in Valle de Gaudalupe and Cabo.
Any new deal has to be in a market that makes sense for a premium lifestyle property to operate in, Stein said. There are a lot of definitions for lifestyle, but to Stein, that means needing a market that has guests who care about design, social engagement, and great food and beverage options. That doesn’t only mean downtown urban centers only, referring to the new Unscripted location in the Catskills.
Dream Hotel Group doesn’t do limited- or select-service hotels, Stein said. There needs to be enough of a community to use the restaurants and bars to create a social scene. It’s not just for the hotel guests to get breakfast and leave for the day; it has to be a place that brings in the local community as well.
The owner and/or developer has to be aligned with the vision for a hotel invested in its community and the need to be a social hub, he said, adding that it’s offensive to call these hotels a restaurant with rooms on top. Having a great guest experience at a hotel is absolutely important, but having a great F&B experience is as much a primary goal as the hotel side.
“Having a great stay, having a quiet, calm place to go back to sleep is super important to us,” he said. “We’re not just a place to party, though we are definitely a place to have fun and come to. We know we’re not a good hotel if we can’t provide a great sleep experience as well.”
Being a lifestyle hotel company has actually gotten easier now that the major brand companies are exploring the space, Stein said. Many people in the industry who want to do great lifestyle hotels don’t want to be part of those, and with the bigger brands buying up the smaller lifestyle brand companies, it helps his company stand out.
Every hotel should be a lifestyle hotel, Stein said. No one wants to stay in the “boring” brands, he added, which is why those companies are exploring the space and creating new brands.
Dream has been a true lifestyle hotel company since 1999, he said, and others don’t have the same longevity or commitment to food and beverage and authenticity.
“We truly believe that, to the point where I always say our F&B concepts are designed for the community,” he said. “I do not care if the hotel guest does not like what we’re doing in those areas. Very few of those big companies would make a statement like that and really believe it.”
The goal is have its F&B concepts be part of the fabric of the community, he said, because then the guests come down and see the locals having fun in that space.
“My goal, our team’s goal is to make every hotel that we do, whether we own or for other owners, to become the most fun, exciting hotel in the market that it’s in,” he said. “We don’t bring a formula to get that. Each one, we take a fresh look.”
*Correction, 8 February 2019: This story has been updated to correct the spelling of Valle de Guadalupe.