John Russell
A group of U.S. lodging industry veterans led by NYLO Hotels co-founder John Russell recently announced plans to partner with Chennai-based Auromatrix to form Advaya Hospitality. Advaya plans to create its own brands that cater largely to business travelers, with new or converted properties in India, the United States and other countries, according to Russell, who will serve as the company's CEO. Excerpts from Russell's interview this week with Management.travelfollow.
What is Advaya's development plan?
They want us to develop and launch lifestyle brands for them, both a four-star and a three-star brand. Simultaneous to launching in India, we're going to launch in the U.S. We're putting together about a $100 million fund. We are identifying some conversion opportunities in gateway cities, like New York, Phoenix and Kansas City. We're testing the names right now. Hopefully, we'll have everything in order to launch with renderings and schematics at the Americas Lodging Investment Summit in San Diego in January. We're launching those brands, identifying properties we can convert, as well as our prototype in Kansas City, which will be a ground-up new build. They have 10 sites identified where they own land in India where we can put this lifestyle brand. They also have a package of 10 existing hotels in India. They're also looking in Thailand and in Sri Lanka right now. These hotels are all going to be built for business, both lifestyle brands. The full-service [properties] will have small meeting spaces, not convention space. Our typical size is going to be 150 rooms. There will be three or four small meeting rooms, maybe a ballroom in a market that demands bigger space. We'll have a very robust food and beverage concept in the full-service one.
Do you have any hard goals as far as the number of hotels you'll be opening?
In India, we'd like to, over the next couple of years, be open or out of the ground with about 10, and probably they would be the budget lifestyle brand, where it would cost maybe $80,000 a room to build, plus land. They would be more competitive with, say, a Hyatt Place. In the U.S., it's going to be a little slower. For new builds, it'll be one or two, but conversions will be around five to eight over the next two and a half years. We've identified five projects already, in Atlanta, Phoenix, Kansas City, Miami and New York.
Do you think business travel will continue to rebound over that time?
Yes. It's not like flipping a switch, but it's already started. You see it in New York already. Last year, I could have stayed in New York for $120 at very nice hotels. Now prices are back up to $350 or $390, so small meetings and business travel are coming back. Conventions are going to be a little bit slower, but even that market is starting to slowly come back.
How does the timing work in launching a new brand as we're just beginning to emerge from the recession?
To me, it's pretty good. There were a slew of new brands announced about two years ago. There were about 35 brands in 35 months. Some of them aren't around anymore. The timing is good because there has been virtually no new development, for a lot of reasons. There are a lot of projects that haven't been built--a few in New York City and Miami, where the developer or contractor ran out of money--and you can pick them up at a fair market price. They're good locations, and we can finish them out to what our brand is going to look like. Internationally, it is attractive because the hot places to be are India, where there's capital available, China, Thailand and Brazil, where we're looking very strongly. There are virtually no brands down there, and the people we've been talking to want to develop a Brazilian brand. The U.S. will be a little slower coming back, but it is coming back.
With so many hotel brands already out there, how do you distinguish yourself when developing a new brand?
I'm a big believer in a brand needing to tell a story. If I blindfold you and take you into a hotel room, take all the marketing materials out of it, you can't tell me if you're in a Westin, a Hyatt, a Sheraton or a W, and I can almost do the same thing on the outside. Architecturally and design-wise, you have to be unique and different. We have some unique brand identifiers in the food and beverage component, in the lobby, in the lounge and bar area and the façade of the building, [along with] the service culture, the way you treat your guests, their needs, every amenity that you touch in a room, every experience you have in the bar or restaurant. We'll be huge into music, arguably music-centric. We're going to spend an awful lot of time, effort and money to really generate a music culture, and the same thing with the artwork and design. The whole thing is going to tell a story.