SH Hotels' Arash Azarbarzin on the reopening process and learning from China

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A pioneer within the luxury and sustainable hospitality sectors, SH Hotels & Resorts -- whose portfolio includes the 1 Hotels, Baccarat Hotels and Treehouse Hotels brands -- began reopening its U.S. properties this summer, starting with the 1 Hotel South Beach in June and the 1 Hotel Brooklyn Bridge in early July. Hotels editor Christina Jelski recently caught up with SH Hotels & Resorts president Arash Azarbarzin to talk about the group's reopening process, his outlook on New York's tourism rebound and what's next when it comes to expansion.

Arash Azarbarzin
Arash Azarbarzin

Q: With 1 Hotel's Miami and Brooklyn outposts recently reopened, what's the latest in terms of travel trends in those two markets?

A: There is pent-up demand, but this is still a pandemic. Miami opened up very successfully in June, and we actually saw demand come back right away. But as you can see from recent news, Miami has had to take a step back due to the number of cases there. There are now restrictions that were put back in place, and that has impacted the demand and the level of business that we were seeing there.

What we've seen in Brooklyn so far is that demand has been very, very nice. It's been mainly drive market and locals coming in from different boroughs or from across the tri-state area. We finished close to 40% occupancy over the [Fourth of July] weekend. We weren't planning to take more than 40%, because we feel that as you open up a hotel, you don't want to overwhelm the property and compromise the safety of guests and team members with overcapacity.

Q: With New York at one point an epicenter of the Covid-19 pandemic, what's your outlook on a recovery in that market in particular?

A: New York is usually the first market to go down, but it's also usually the first market to come back up. It's the epicenter for business and commerce and, to a certain extent, tourism in America. That said, tourism might take a bit longer to rebound as we wait for international travel to come back and for the airline industry to see some relaxation of requirements. But believe it or not, there's actually good opportunity for some corporate business to come back before the tourism business comes back to New York. Offices are reopening now in New York, and the retail business is coming back, as well, and I think we might be able to see some local corporate and business travel start up again. Some people, for example, are commuting in from the boroughs for work, and they may say, "Hey, might as well stay in the city and not get on a train." We've also gotten some requests from executives who don't want to keep driving or getting on a train to go to and from Connecticut or Westchester.

Q: It's been less than a year since you opened the first outpost of the Treehouse brand, in London. What's the update on that concept?

A: We launched Treehouse London last November, and we never closed it [during the pandemic]. We did reopen our restaurant and our rooftop bar on July 4, which was the first day that the U.K. government pulled back their restrictions on indoor dining. In terms of expansion of the brand, we're still very active and very busy looking at new opportunities. We actually think that Treehouse will be as strong, or even stronger, post-pandemic because it has the same DNA and sustainable nature of 1, but it's geared toward a younger audience. And I believe the younger audience will get back to traveling a little quicker than the guys my age, and definitely more quickly than the people who are older than I am.

Q: What about the pipeline for 1 Hotels and Baccarat Hotels?

A: Thankfully, it's all systems go. Right now, we have 1 Hotel Nashville, 1 Hotel Paris, 1 Hotel London, 1 Hotel San Francisco, 1 Hotel Melbourne and 1 Hotel Hanalei Bay on the island of Kauai, all at different levels of construction and development. On the Baccarat side, we've had several meetings with the Baccarat Bordeaux, and that project is taking shape and coming back in a strong way.

Q: SH Hotels & Resorts also has a presence in China, with the 1 Hotel Haitang Bay in Sanya. With China ahead of us in terms of the pandemic timeline, are there any lessons you've gleaned from that market?

A: The thing about the Chinese market is that people do tend to abide by simple recommendations and rules, like wearing a mask, and follow those recommendations religiously. We saw that hotels that did well on that front were able to come back quicker than hotels that were a little more lax about those requirements. While in the hotel world we're used to never saying no and always accommodating our customers, we learned that wearing a mask within a hotel is not something that should be up for conversation or debate.

In terms of demand, our Sanya property opened in January of this year, and we never closed, though we were at very, very low occupancy in March and April. In May, we started marketing again and our pickup has been great, especially since the Chinese traveler can't leave or doesn't feel comfortable leaving the country. So Sanya has become a great destination for them. Our property reached 70% occupancy last weekend, and other properties in Sanya are already getting 80%, 90% occupancy. So our hope is that by the fourth quarter, we will get to some level of normalcy there. 

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