16 experts advise on what’s to come this year.
Kimpton Hotels & Restaurants CEO Mike DeFrino talks:
Kimpton Hotels & Restaurants is on a path for growth, not
just in the U.S., but also in Europe, where it opened its first property in May,
the Kimpton De Witt in Amsterdam. Lodging editor Julie Sickel spoke with CEO Mike
BTN: So you're
owned by InterContinental Hotels Group. Has that changed the Kimpton identity at
years ago IHG acquired the Kimpton management company; with that they did not acquire
any of the real estate. We're one of IHG's nine brands, but we're fully managed;
we don't have a franchise model. And a big part of what we offer is the fully managed
Kimpton way, from design to operations to restaurant programming to restaurant concepting,
activation, hiring and training of the employees. IHG has been very careful to make
sure that Kimpton is held somewhat separately and allowed to do what we do the way
we've done it. We say that our company is powered by IHG and delivered by Kimpton.
BTN: And how do
you work together on operations and sales?
DeFrino: We are still,
and plan to be for the long term, based in San Francisco. I'm one of the only Kimpton
employees who actually has a reporting line into IHG. I report to the CEO of the
Americas Elie Maalouf. We have all Kimpton salespeople on property, which is the
majority of our sales efforts, and we use IHG's above-property sales teams. Some
of the Kimpton national sales team members also moved over to the IHG team and sell
the whole portfolio. We're also using IHG's resources out in the world. They have
three other main offices: one in London for Europe, one in Singapore for EMEA, and
one in Shanghai for China. We work through those offices to try to get hotels in
BTN: How has the
portfolio changed since Kimpton was acquired?
DeFrino: We're about
the same size. At the end of the year we'll be larger. We had some hotels that left
the system [in California], but we opened up more hotels last year than we ever
have before. We have about 60 hotels currently. We just opened our first in Europe,
in Amsterdam, and we have seven more to open this year.
We're going into some secondary markets like Milwaukee and Cleveland and Winston-Salem and Pittsburgh, which we hadn't done before."
BTN: There's a
lot of investment talk in the midscale segment at the moment. What's the appetite
for an upper-upscale brand like Kimpton?
DeFrino: Since our
hotels are more expensive to build than a midscale hotel, they have to command a
higher rate. Higher rates are found in places like New York, Chicago and L.A. Now,
some markets are perceived as being overbuilt, so financing is tighter than it used
to be. But the appetite is still voracious. Developers want to develop, so they
are trying different things, different combinations to get deals financed and get
things across the line. We're going into some secondary markets like Milwaukee and
Cleveland and Winston-Salem and Pittsburgh, which we hadn't done before. In Charlotte,
we're opening a hotel that has a giant office building connected to it. In Sacramento,
we're opening one that has condos attached to it, right next to the [Golden1Center].
More real estate developers are looking for a unique, highly stylized, youthful
offering to anchor or be a part of their complex.
BTN: A number
of new brands describe themselves as lifestyle or boutique, and now we see the same
with soft brands. What are your thoughts?
DeFrino: The fact that there are a lot of these boutique
or collection brands is a tribute in some respects to the niche. The boutique or
independent or lifestyle or whatever people want to call it is here to stay, and
it is actually valid and attractive to both customers and owners. The collection
brands have some commercial validity, but they are very different. There is complete
inconsistency in product delivery; there's no standardization. At Kimpton, we're
very conscious that every hotel's got to behave in its own way and has to have its
own certain cha-cha, but the experience, the charm will always be identifiably Kimpton.
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