Brian Quinn detailed why the US-based company has recently opened up brands for franchising and recruited a dedicated development team.
What does Sonesta’s hotel pipeline currently look like?
Sonesta has really experienced explosive growth since 2021. This is primarily in the US – growing to the eighth largest hotel company according to Smith Travel. Our growth has also been international more recently with our renewal of our agreement with GHL Hoteles in Latin America (16 hotels) and expanding our reach in Egypt (currently nine sites including six ships on the Nile).
Are there any group brands you’re concentrating on developing?
We really see growth for three big buckets: luxury/lifestyle, extended stay including both upscale and midscale, and premium economy where our Americas Best Value Inn brand was just recognised by JD Powers as the number one economy brand for guest satisfaction in the 2023 NAGSI study.
Why have you recently opened up The James and Royal Sonesta brands for franchising?
These two brands are a reaction to both growing consumer and development demand and a reaction to the capital markets which have begun to acknowledge the power of lifestyle branding. Earlier this year we launched our luxury and lifestyle lodging development team in reaction to this additional demand. Our competitors have more recently doubled down on their ‘lifestyle and luxury’ offerings. Demand for both continues to be strong including newbuilds in Coachella, California and Larimar, Dominican Republic.
What benefits have you already gained from the new luxury and lifestyle lodging development team?
With the addition of this team and focus on franchising and growing these brands, we’re now talking to investment grade franchisees and larger management companies, really aspirational clients (capital dense customers who have a lot of potential for growth). Capital markets are intrigued by luxury/lifestyle space and we’re eager to give them options and opportunities to grow with us. We have a continued commitment to cast the widest net to grow the system.
Why did you decide to enter the Dominican Republic market with the two Larimar City & Resort hotels?
This was a truly unique opportunity to position two of our upper-upscale brands within a significant mixed-use development in a new destination for Sonesta. We’re really excited to see Royal Sonesta Dominican Republic and The James Dominican Republic open late in 2025.
Are there any other new countries or regions you are looking at expanding into?
Given our recent expansion in Egypt, NYC, Miami, Houston and San Francisco, we have a disciplined strategy looking at key markets in Europe and around the world. As we continue to strengthen and build our portfolio and brands in the Americas, we’ll be looking for future growth opportunities to enhance our existing portfolio. In the near term, that means looking to Europe as a logical next step on its own and also as an awareness play for our properties in both Egypt and the Americas. We’re looking for great hotels to add to the portfolio and to enhance the award-winning guest loyalty programme Sonesta Travel Pass with new destinations to earn and burn points toward free stays.
What has industry interest been like for your new Sonesta Essential brand?
This brand was created specifically to respond to market demand for a ‘Sonesta Select light’ approach with limited food and beverage and associated expense of adding these elements to existing hotel footprints. The conversion interest has been extreme with more than 10 hotels set to open within the year, including Sonesta Essential Chattanooga in Tennessee.
Are you intending to launch any further new hotel brands?
We’ve established five new brands and acquired a sixth in the last three years in response to a need in the market expressed to us by our guests and developers. These are Sonesta Select, Sonesta Simply Suites, Sonesta Essential, two new soft brands (Classico and MOD) and The James. At this point there is no intention to add another brand unless or until there is a need identified in the market.
What criteria do you use when choosing suppliers for your hotel projects?
We recommend suppliers based on their ability to deliver quality product on time and within budget. This can be based on past experience and peer reviews, but we also insist on a rigorous model mock-up process for all potential suppliers for full-service projects and for any design changes to our prototypical focus-service brands.
How do you see the Sonesta portfolio developing over the next few years?
We have a significant commitment from ownership to renovation of our focus service portfolios – Sonesta Select, Sonesta ES Suites and Sonesta Simply Suites are all being reconcepted for today’s guest, with an eye to communal spaces that make sense in a post-covid world and guestrooms that reflect the road warrior who might bring family along for a work from hotel/bleisure experience. I’m especially excited about the improvements in our product. We’ll continue to be responsive to the market – demand for lodging and experiences worldwide will only continue to grow, as long as employment holds. With our luxury/lifestyle team in place and the introduction of two new soft brands that are driven by development opportunities that didn’t easily assimilate into the existing Sonesta brand portfolios in the upper-upscale and upscale space, we’re really ready for anything. In 2024 and 2025. Our global aspirations will begin to be realised in important markets in Europe and by expanding our presence in the Middle East.