TRAVEL ASIA – Boutique-Hotel Operator Checks in to Asia

Commune Hotels & Resorts

One of the largest boutique-hotel operators in the U.S. is counting on a new acquisition to propel an expansion into Asia, joining a number of lodging companies looking to export this type of hotel abroad.

Commune Hotels & Resorts said last week that the Singapore-based luxury hotel company Alila Hotels & Resorts will become Commune’s fourth brand.

Investor John Pritzker, whose private-equity firm, Geolo Capital, owns Commune, acquired a majority interest in Alila for an undisclosed price last year. This month, Mr. Pritzker merged the Asian hotel brand with Commune.

Commune also plans to use Alila’s corporate office in Singapore as its Asian headquarters to launch in the region its three other brands, including Thompson Hotels.

“I took the job at Commune with the intention of growing the firm internationally,” said Chief Executive Officer Niki Leondakis, who joined in 2012 after serving as president of rival boutique brand Kimpton Hotels & Restaurants. “I saw great potential for lifestyle overseas, particularly in Asia.”

Boutique and lifestyle brands have operated in the U.S. since the 1980s, but they have exploded in number during the past couple of years. Most target younger and more fashionable travelers, focusing on design, a lively bar and a social scene in the public spaces.

After building their presence in the U.S., these brands are turning their sights abroad. InterContinental Hotels Group PLC, which acquired Kimpton a few months ago for $430 million, has said overseas expansion was a big motivation for the deal. Its early plans are for opening Kimptons in Europe and Asia.

Marriott International Inc.’s two new lifestyle brands, AC and Moxy, are already in Europe, while Hilton Worldwide Holdings Inc. is in discussions with hotel investors in Europe, the Middle East and South America about its new Canopy lifestyle brand.

New York University hospitality professor Bjorn Hanson said it makes sense for these brands to look overseas, but their products might not seem as unique in foreign markets. In most countries, independent hotels with local touches are the norm and full-service branded hotels are the novelty, he said.

“Hotel owners may tell the boutique brands, ‘that’s how we do it here anyway,’ ” Mr. Hanson said.

Mr. Pritzker is the son of a founder of Hyatt Hotels Corp., but he left the family business in the late 1980s to pursue his own career. He formed Commune in 2011 in a venture with New York hotelier Jason Pomeranc. In 2013, the two partners went their separate ways, with Geolo buying out Mr. Pomeranc and his brothers.

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