Sam Nazarian's SBE is returning to the hotel business, saying on Monday that it plans to offer a new “smart lifestyle” hotel as part of Wyndham Hotels & Resorts' soft brand, the Registry Collection. Announced.
Soft brands have fewer rules and “standards” from Wyndham headquarters than so-called hard brands, which dictate decorative details and require more investment.
SBE (short for Sammy Boy Entertainment) became LA's largest nightclub operator in the 2000s. In 2005, he founded the hotel brand SLS and later founded Hyde & Mondrian. In 2016, it acquired Morgan's Hotel Group for approximately $700 million. In 2018, Accor became a half-owner of SBE and began selling its hotels.
The pandemic has hit SBE hard. The company sold its remaining 50% stake in the hotel brand to Accor. To pay down debt, it exchanged the marketing value and management rights of about 100 hotels for about $300 million. SBE retreated to building a lively restaurant.
Currently, SBE aims to open 50 hotels with 7,500 rooms in six years. Rates will likely range from $250 to $500 per night, executives said. Music artist Marc Anthony and his company Magnus are making a strategic investment.
Project headquarters hotel
“Project HQ” is the tentative name for SBE’s new hotel. The concept is that each hotel will be located in the heart of its city or university campus and will serve as a restaurant, nightlife, spa and fitness “headquarters” for targeted Millennial and Gen Z guests.
Celebrity and influencer chefs will anchor restaurants at each property.
Food and beverages are an important part of marketing for owners. SBE expects the overwhelming majority to be conversions of existing properties.
For hotel owners who feel that their properties are outdated or underperforming, SBE offers its existing network of celebrity chefs to create spin-off concepts and cost-effectively upgrade their properties. It can be established.
“What we are seeing is [development costs] $30,000 to $50,000 per session [guestroom] It’s the key,” Nazarian said.
The hotel project will also include branded residences, making the economics more attractive for owners. Unlike the pure luxury condos offered by luxury competitors like Montage and Four Seasons, Project HQ will include a mix of upscale student and workforce housing. The goal is to ensure a thriving sense of community and take full advantage of campus amenities.
Executives hinted that by adding the company's stylish branding to homes, owners could effectively price their units up to 20% higher than they would otherwise.
What Wyndham brings
Wyndham said it does not consider Project HQ to be its 25th brand, but rather as part of its existing Registry collection. Wyndham does not manage the hotel and will rely on SBE to handle day-to-day operations.
As part of our strategic partnership with SBE, here are the highlights of what we are offering hotel owners:
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Asset and revenue management software.
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Demand comes from some of the 105 million members of Wyndham's loyalty program.
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Tools to digitally upsell and cross-sell guests on other services.
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Mobile check-in and check-out and mobile keys.
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Sales, operational support, etc.
What you get with Wyndham
Wyndham is the world's largest hotel franchisor. The majority of the 9,100 hotels are mid-range. Travelers who earn points in loyalty programs are looking for more exciting destinations when redeeming their rewards.
“This aspirational redemption opportunity that we feel right now is exactly what we have,” said President and CEO Jeff Ballotti. “It’s completely, completely different.”
Barotti met Nazarian when Nazarian was first trying to launch a lifestyle hotel brand. At the time, Barotti was at Starwood, which had similar brands W and St. Regis. The two remained connected.
Fast forward to the present. “It was just a quick text message asking Jeff if he wanted to call me for a second, and he was kind enough to oblige,” Nazarian said. “Our team came together. This shows the ambition of CEOs of large companies to dedicate their time to innovators like us.”
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