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The Road To Success

Broad Lifestyle Brand Portfolio, Destination Growth Drive Two Roads’ Future

Friday, March 17, 2017
Dennis Nessler
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As a newly created international lifestyle company with a growing presence outside of the U.S., gaining entry into the Caribbean was not a matter of ‘if’ but more a matter of ‘when’ for Two Roads Hospitality, which recently assumed management of a high-end golf resort in Puerto Rico through its Destination Hotels collection.

Royal Isabela, a family-owned property, originally debuted in 2012 and is located on 2,000 acres of oceanfront in Northwest Puerto Rico. Destination’s newest property features luxury casitas and privately owned residences, along with an 18-hole golf course.

Jamie Sabatier, CEO of Two Roads Hospitality, touted the importance of the addition of Royal Isabela to the Destination portfolio. “Given the strength of our resort business we have been looking to expand into the Caribbean. We view Puerto Rico as an attractive resort market and we felt that we wanted to take advantage of this opportunity. We’ve looked at other opportunities, but we felt this one was a great starting point for us. The property quality is at the absolute highest level,” he said, pointing out that while Puerto Rico isn’t technically considered to be part of the Caribbean it “certainly acts and feels like it.”

Sabatier declined to give specifics, but he acknowledged strategies have been discussed that would enhance the spa experience and expand the overall resort. “The plans going forward that the owners have to take it from where it is today to a much broader resort community was something that was very attractive to us as well,” he said.

Destination—which operates nearly 45 luxury and upscale independent hotels—merged with Commune Hotels & Resorts last September and both now operate under the Two Roads Hospitality umbrella, which encompasses five brands and nearly 95 properties.

In addition to Destination, the brand lineup of Two Roads includes Joie de Vivre Hotels, Thompson Hotels, tommie, and Alila Hotels & Resorts. Sabatier maintained the combined company brings together the urban strength of Commune Hotels with Destination’s reputation on the resort side to offer a “much more broad-based portfolio of services.”

He further detailed the progress of the ongoing integration of the two companies.
“Given the nature of a merger, which is always potentially difficult, I think it’s gone incredibly well. We’ve done all the heavy lifting to bring our companies together as one…We have an organizational structure that’s fully integrated. So as we look forward into 2017 it’s really business as usual in terms of being very focused on property performance and being very focused on continuing to tell stories and create real engagement with our guests from a brand standpoint and customer experience standpoint,” he said.

Sabatier stressed the importance of being able to leverage the strengths of both companies when it comes to areas like revenue management, finance, IT, sales and operations. He also highlighted the value of being able to build an “A team” with the best people from both companies.

And Sabatier pointed to another other major benefit of the merger that’s produced results. “Clearly scale also brings its advantages. We’ve been able to deliver this past year over 10 million dollars in savings to our owners through better purchasing deals and better deals with some of our distribution partners. I think that’s been really helpful. We’ve also been able to approach each property with a broader portfolio of tools to be more successful from a top-line perspective. That’s why we were able to gain share as a portfolio in the midst of putting two companies together,” he said.

Sabatier charted the progress of Destination while underscoring the brand’s pension for operating unique properties and referred to its tagline, “being true to our place but with diversified design.” He noted that Destination’s guest recognition program has close to 1.5 million active guests.

Sabatier noted that the company has made a concerted effort of late to have the Destination brand be better understood by the consumer. “We feel like its connecting with consumers. It’s been well known as a B-to-B brand in past, but we’re pleased with how quickly it’s caught on as a B-to-C brand,” he said. That said, Sabatier further added, “I will say we don’t ever want the Destination brand to be more than a soft brand or collection brand. We think that the stars of the show are the individual properties within the Destination portfolio,” he said.

The Caribbean is just one of the international growth ‘destinations’ for the company, so to speak. Sabatier also stressed the company’s expansion in Asia through Alila, a luxury hotel brand with a focus on mindfulness, wellness and sustainability.

“Two Roads Asia has been going gangbusters and will continue to do so this year and into the future in terms of success and growth. We have a strong presence in Asia with a full management team. The cross selling we’ve been able to implement relative to having the Asian customer staying at our properties in North America, and then vice versa, has also been something we view very favorably,” he said.

The company currently has some 11 properties in the Alila portfolio, and Sabatier expects that by the end of the year there will be 17 open and operating. He added, “the pipeline is extremely robust from ‘18 to ’19, so the growth is going to be pretty rapid there.”

Sabatier noted the company just inked deals for two Joie De Vivre Hotels in Asia and elaborated on the company’s long-term expansion strategies. “We’re continuing to grow the Alila brand in Asia, but also looking to take it into North America. The brands we have in North America we are actually growing in Asia as well. Again, the integration between our efforts in Asia and North America are only going to get stronger,” he said.

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Dennis Nessler    Dennis Nessler
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