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US-headquartered Dream Hotel Group is undergoing an extraordinary period of growth, with its pipeline due to more than double its current property count. So how and why is it expanding so rapidly?
TOPHOTELNEWS talked to the group’s chief development officer, David Kuperberg, to get the lowdown on the Dream vision.
Double vision
The group currently has 16 hotels open across four upscale and luxury brands: Dream Hotels, Unscripted Hotels, Time Hotels and The Chatwal. And with a further 25 sites under development, Kuperberg signalled this won’t be the end of the expansion: “We have quite a number in the pipeline to be announced in the coming months, so doubling or tripling in size in the next three to four years is not out of the realm of possibilities.”
He further detailed: “We’ve been on a bit of a tear in these last few months – I think we’ve announced six hotels within the last five months, so we are definitely rapidly growing.”
Pandemic pause
One of the factors influencing this recent ramp up has been the pandemic. Kuperberg is particularly proud that no planned projects were cancelled during this period, which he believes makes Dream a rare beast in the industry. Though some developments were put on pause, the ball restarted rolling towards the end of 2021. “Last October things came back really strong, all of our projects got signed off at once and are moving forward quickly,” he said.
And while the Omicron variant’s appearance did temporarily make investors a little nervous again around the turn of the year, Kuperberg reported that it’s been full steam ahead over the last few months. “Our existing properties are doing well and everybody sees this wave of people travelling. The developers we work with are going to figure out a way around any challenges and continue to build hotels and work with us.”
Top and bottom line
One of the possible stumbling blocks is the rising interest rate in the US, with Kuperberg noting: “It’s making everyone a little bit nervous, but on the flipside our own room rates have never been higher. Our top and bottom line have never been better so even though it might cost a little bit more to build, everybody sees the upside on the top line.”
He feels that despite inflation, investor confidence is growing: “There’s now more certainty with pricing than six months ago. I think people are getting a handle on it and feeling more comfortable with construction budgets. Before there was a 20% swing in cost but is now becoming less of a swing.”
Creating a Vegas dream
Kuperberg believes that the recent groundbreaking of the landmark Dream Las Vegas, as well as the imminent ones of Dream Miami and Unscripted Wichita show that market assurance has returned. The Las Vegas development is a particular milestone for the firm, being one of only around 30 hotels situated on the vibrant Strip itself.
He praised: “This project has been huge for us. People always thought we were already in Vegas because we are somewhat of a Vegas-style brand. So when this opportunity came up on the Strip we jumped at it – our DNA is made for Las Vegas. None of our competitors have their own hotel on the Strip, a lot of them are a hotel within a hotel, so to have our own identity and place there takes us to a whole other level as a company. We have two great development partners on that, Shopoff Realty Investments and Contour. They’ve worked with us from the very beginning of the idea, and now it’s happening for real.”
Out from New York
The 531-room Vegas hotel is due to open in 2024, along with Unscripted Wichita, with Dream Miami scheduled to follow in 2025. This widespread US roll-out marks a change of tack for the group, as Kuperberg detailed: “For many years we were really focused on New York City. We’ve been around for more than 30 years and I came on board 10 years ago to help expand out of New York.
“When I started, the idea of going someplace that wasn’t LA, San Francisco or London wasn’t even on our radar. Now we have learned that there are so many great markets out there with a creative class that are craving something we have. Even this was magnified with the pandemic – a lot of people are staying in secondary or tertiary markets and that’s where we’re seeing tremendous growth.”
Newbuilds which will cater to this demand are Dream Cleveland, due to add 207 rooms to the company’s portfolio in 2024, and Dream Louisville, following in 2025 with 168 keys.
Global opportunities
Internationally, the upcoming Dream Doha, which will open by the end of the year, plus the recently-launched Your Nature: An Unscripted Eco Resort Belgium, near the French border, will form a springboard for further global reach, according to Kuperberg. “They really create a great foundation to grow from, and especially Doha is creating more opportunities. This more than $400 million project in the heart of the city will truly be a flagship for us. We think we’re right for Dubai and other key markets in that region.”
In terms of which group brands are proving to have the most development potential, Kuperberg found it difficult to choose: “All of our brands are growing. We’re learning that there is a demand for all of our brands, from the luxury to the upscale. They are all in a tie right now in our pipeline.” However, he underlined: “We think there’s a huge demand for luxury within a wilderness environment. We opened The Chatwal Lodge earlier this summer in the Catskills and that concept has already got us a number of other opportunities around the world.”
Siting selection
So what factors does Dream consider when deciding where to set up next? “We build for the community first,” Kuperberg emphasised. “We’re a firm believer that if you get the local community eating, drinking and playing at your hotel, that’s where guests are going to want to stay.”
Locality is also important to the company when it comes to its hotels’ supply chain. “Everything is custom to each market. Of course there are some suppliers that we love and trust and continue to use, but we definitely treat each project differently – each is special,” he said.
Looking ahead
So is there a specific development target in the years ahead? “We’re different to the large companies where I may be told to develop a certain number of hotels a year,” said Kuperberg, concluding: “We’ve been very successful with not having that pressure. We have our internal goals but for us a development has to make sense. We’re too small to make a huge error and so all of our hotels have been successful.
“It’s very hard to find a hotel company like ours that hasn’t lost hotels during the pandemic. For the most part we’ve really kept our whole portfolio together and we’ve done that by not making these critical mistakes and putting a hotel in the wrong place.”
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