Growth is always a baseline expectation for any brand and management company such as Dream Hotel Group, but with a portfolio of unique lifestyle brands finding the right location is not as simple as it may be with some of the more ‘traditional’ flags.
That’s where the ‘Dream team,’ so to speak, comes into the picture, according to Karan Narang, vp, acquisitions and development analysis, Dream Hotel Group. The New York-based currently has some 19 properties open and roughly 20 hotels in the development pipeline within its four distinct brands; the flagship Dream Hotels brand, Unscripted Hotels, Time Hotels, and The Chatwal.
Narang offered some insight into how the company approaches acquisitions. “We’re definitely very market specific looking at which markets our brands fit in and where the demographics are an ideal fit for us,” he said.
An example of just such a market is Nashville, where the company had its most recent opening. The Dream Nashville held its grand opening in March. Narang described it as an “up and coming market” which was “a pretty straight-forward one for us.”
He elaborated on how the project takes shape following the initial conversation with developers. “We look at it at a high level but then our team actually flies down to the property and makes sure they understand the bones, makes sure they understand the market and that we can deliver a product that they’re looking for and that will actually work for that market,” said Narang.
He went on to detail the company’s approach and objective with new any project.
“We look at the product, we look at the box. We look at what programming we can bring into that product. We don’t want to overbuild and we don’t want to underbuild, we want to make sure it’s optimized for that box to give the return to our investors,” he said.
With the addition of the Dream Nashville, the Dream brand has seven locations, including Dream Hollywood, which opened in July of 2017, as well as two in New York City, the Dream South Beach, the Dream Bangkok and Dream Phuket. The brand also has an active global pipeline with product in development for Dallas, Atlanta and Palm Springs within the U.S. alone.
While the brand is made up of primarily new builds, Narang noted the brand got its start with The Dream Downtown, a New York City conversion he touted as one of the company’s biggest success stories.
“Based on where it is now to where we started I would say it’s even more than a home run. When we came in there it kind of activated the whole area. All the office space around us is now getting sold but when we opened that area was still up and coming.
It’s been a big home run for us,” he said.
Narang also cited The Time New York as a stand-out project. “That was probably our first step into the lifestyle [segment] in 1999. I think only Ian Schrager was doing that at that point. Activating that whole neighborhood and that whole building has been a big success for us as well,” he said.
Narang emphasized that food & beverage has proved to be a major point of differentiation for the company. “With the F&B concept that we have and the activation we bring that kind of takes us to the next level compared to any other hotel brand,” he said.
Narang further added that the company’s strategy when it comes to food & beverage is very much market specific. “We look at who’s doing what in that town and what would fit for us once we go in there. We definitely try to take an entrepreneurial approach to that. We don’t try to take what we have in New York and put it in Nashville, for example. Our F&B team does an amazing job with that trying to understand that aspect and basically figure out what would work for this market and make sure we create a product that corresponds to that,” he said.
Finally, Narang acknowledged cost is always a major consideration when it comes to any development project. As an example, he noted the per key cost can range anywhere from $400,000 a key to $650,000 a key depending on a number of factor such as land value, number of F&B outlets and the size of the structure itself.
“When we’re building something from the financial side we definitely look at the cost per key to build it. Is it union construction or non-union construction? Is the labor going to be union or non union. We want to make sure we’re delivering a product that does well, but also delivers something at the bottom line that the investor is looking for and make sure that they’re satisfied with the returns that they are getting. That’s very important to us,” he said.