Dream Hotel Group's Jay Stein on commission rates, expansion plans

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A pioneer of the lifestyle hospitality segment, Dream Hotel Group is known for its portfolio of high-end, boutique-style brands, including the Dream, Chatwal, Time and Unscripted flags. Earlier this month, Dream Hotel Group announced it would be extending a temporary increase of its group booking commission rate from 10% to 12% through the first quarter of 2019. Hotels editor Christina Jelski talked recently with Dream Hotel Group CEO Jay Stein about the rate increase and the company's other growth strategies for the year ahead.

Q: Why did Dream Hotel Group extend its 12% commission on group bookings?

Jay Stein
Jay Stein

A: Prior to making the jump to 12% last April, we were kind of lumped in with the thousands of other hotels offering 10%. But after most went down to 7% and others remained at 10%, we really made our mark with the 12% rate, and we instantly became a much bigger player in a very small pool. All of our properties saw an uptick in [requests for proposal] and more leads. And while we don't have any large, convention-type hotels, we do have great event space. Many of these planners aren't looking for a typical hotel meetings setup, so we can really offer something that's more creative and still fits their needs.

Q: Will Dream Hotel Group consider further extending the 12% rate?

A: We have talked about extending it, and we will take another look at it further into the quarter. I don't want to say whether we're able to do it or not, but I think there's a good likelihood that we'll possibly extend it later into the year.

Q: What's on the horizon for Dream Hotel Group in terms of expansion? Can you highlight a few of the company's recent openings and plans for additional growth?

A: We're currently in what we call our preview period with the Dream Nashville, so we don't have all the rooms and venues there opened yet, but we should be fully operational by the beginning of March. We've also seen a lot of developer interest with the Chatwal. We've only got one open in New York right now, but we're doing what we're calling the Chatwal Lodge, which is a wilderness version of a five-star, luxury hotel, in Bethel, N.Y., and we've also signed a deal for the Chatwal in San Miguel de Allende, which is a great tourist-destination city in Mexico. Mexico is becoming one of our fastest-growing markets. We've announced the Dream Valle de Guadalupe and an Unscripted in Tulum, and we've got a couple of deals in Cabo we hope to announce in a couple of months. We're also looking to expand in Asia and hope to announce maybe four or five new deals in that market by the summertime.

Q: Dream Hotel Group has carved out a solid niche within the lifestyle food and beverage (F&B) scene. What's been the secret to the company's success on this front?

A: Our formula is that we don't bring a formula. We look at each market and figure out the right F&B solution that allows that hotel to be the most fun, exciting hotel in that market. Most people feel that you can't make money with F&B, or you're lucky to break even. But we feel that there is an opportunity with F&B, and we do make money, as a rule. But that's only part of the benefit. When we create these fun hotels, they get good PR, and I'm able to drive a little higher [average daily rate]. And that may only be a $15, $20 or $25 rate premium, but you multiply that by 200 rooms and 80% occupancy, 365 days a year, and that turns into a couple million dollars.

Also, I always say that when we try to come up with the right programming, the last person I care about liking our F&B is the guest staying the night. You might think I'm being tongue-in-cheek, but I'm not. That hotel guest, particularly in an urban market, what do they really care about? Maybe having a cup of coffee and breakfast in the morning and then a place to grab a drink later in the day. Other than that, most of them aren't too concerned about F&B. But when it comes to the local community I'm in, if I can create something that gets them excited and into my venues, then I have a guest come downstairs and they see all these locals having fun. So that's been a key part of our special sauce.

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