Boutique Design - September/October 2011 - 40

I N T E R N AT I O N A L

O U T L O O K

To encourage social interaction, the lobby/lounge areas within Advaya’s new Modo lifestyle hotel chain will offer several seating arrangements.

Big Brands’ Overseas Plans
Smaller, independent boutique chains aren’t the only ones expanding overseas. The boutique ﬂags operated by several major American hotel companies are also making that move. Some examples:

Resorts’ 37-unit W Hotels and W Resorts ﬂags have a development pipeline that includes properties in London; Paris; St. Petersburg, Russia; Guangzhou and Shanghai, China; Bali; Vieques Island; Koh Samui, Thailand; and Verbier, Switzerland. Hyatt Corp.’s ﬁve-unit Andaz chain has announced plans for future properties in Amsterdam, Netherlands; Delhi, India; Papagayo, Costa Rica; Sanya, China; and Providenciales, Turks and Caicos Islands.

• Starwood Hotels &

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• Marriott International’s

Boutique Design | September+October 2011

Courtesy of Advaya

ﬂedgling Edition chain, whose ﬁrst two hotels are in Honolulu, Hawaii, and Istanbul, plans properties in Barcelona, Bangkok, London and Mexico City.

ects, that will eventually also lead to money making its way back into U.S. projects,” Davis explains. Beyond tapping the growing crop of overseas investors, U.S.-based boutique operators are adopting several other strategies to make their way into foreign markets. Morgans, for example, has been getting out of the hotel-ownership business (in May, the company sold its Royalton and Morgans properties in New York, along with the Mondrian Los Angeles, while holding onto the management contracts) and focusing its efforts on managing a growing network of hotels under its Mondrian, Morgans and Delano ags in overseas markets. Morgans’ Gross said the hotel sales by his company represent “a continuation in our shift toward an ‘asset light’ business model, allowing us to focus on highermargin management and branding opportunities.” And to help fund its ongoing growth, Morgans, which is publicly held, announced in July that it had closed on a $100 million secured revolving credit facility, with an additional borrowing capacity of up to $110 million. Another potential path to overseas markets is franchising. That’s the route being pursued by Chatwal Hotels & Resorts, which announced early this year

that it had entered an agreement with the Wyndham Hotel Group to franchise its Dream and Night boutique hotel brands globally. Sant Singh Chatwal, chairman and ceo of Chatwal, said linking with Wyndham “will take the development of the Dream and Night brands to the next level.” So, which markets are most likely to be of interest to U.S. boutique brands looking to go overseas? Jones Lang LaSalle’s Davis notes that the proliferation of such properties has occurred in a series of waves over the past couple of decades, starting with Eastern Europe, then spreading in more recent years to the Baltic region (Turkey has been especially popular) and the Middle East. Now, the hottest markets include India and China, each of which presents its own challenges. “In India, construction costs are cheap but land is very expensive,” says Davis. “And in China, choosing the right local partner is of utmost importance.” Back in the Western Hemisphere, Davis believes Brazil represents a major growth opportunity for boutique brands. “Brazil’s economy has been in overdrive in recent years, and it also has a younger population that’s interested in staying in design-forward hotels,” he notes. BD

Boutique Design - September/October 2011

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