Denihan Hospitality Group turns 50 this yearand just because its had a long heritage in hotels doesn'tmean it cant redefine itself. (Liam Neeson didn't become an action movie star until he was 56.) We asked Denihan president David Duncan the top trends impacting his business--a hot topic at the Bisnow Lodging Investment Summit in April, where hell be speaking.
1) Travelers Seeking Lifestyle Hospitality
People are looking for a local, authentic experience and were beneficiaries of that trend, says David (above, on a dirt bike riding trip with friends in Baja Mexico; the thrill seeker also recently tried jetpacking in Miami). Denihans 400-room The James Royal Palm Hotel in South Beach opened this January with substantial F&B operations: two restaurants, four bars, and food/bar service on the beach. (If you're still hungry after all that, see a doctor.) Developers have been inquiring about The James and Affinia--the firms lifestyle brands--which Denihan is looking to expand into most urban cities, particularly Boston, NYC, DC, Miami, Chicago, San Diego, San Francisco, LA, and Seattle. It recently opened a West Coast development office.
2) Increased Emphasis on its Restaurants and Bars
This year, David expects Denihan to reach gross revenues of $100M from restaurants and bars within its hotelsa jump from the $20M five years ago. The key: making it a local concept, like restaurant The National within NYCs Benjamin Hotel (above), led by Iron Chef Geoffrey Zakarian. Restaurants like these are the unofficial front door of a lifestyle hotel and a good business model for hoteliers, he says.
3) A Heated Acquisition Market
The ability of REITs to raise money and generate equity has made pricing competitive. While Denihan continues to explore development opportunities, its also deploying capital into repositioning current assets which often brings a higher return than acquisitions, David says (above is The James Royal Palm Hotel). That includes an $18M repositioning of Manhattans Affinia 50, where its adding 41 keys; and The James Chicago, where it's complementingits David Burke Kitchen andadding speakeasy bar JIMMY, modeled after the successful JIMMY at The James New York in SoHo. The company is on both sides, he says: If a REIT snaps up a hotel, Denihan can manage it, and if a REIT decides itdoesn'twant a certain hotel, Denihan can buy it.
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