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New York-based Dream Hotel Group has evidently dropped plans to expand in Asia, closing its regional office after recently hiring new executives to push for growth.
The group’s development team on its website no longer includes Asia, Europe, Middle East and Africa region, only the Americas, Latin America & Caribbean.
Dream first established an Asia-Pacific development team in Bangkok in early 2017. Its presence in Asia was dampened by last week’s news that the developer of Dream Phuket Hotel & Spa, Singapore-based Castlewood Group, is in liquidation. The hotel opened in November 2015 under a franchise agreement which also called for “20 Dream Hotels over the next 10 years.”
The Straits Times of Singapore reported that Castlewood owed creditors, comprising mostly retail investors, about $107 million. Some of the disgruntled investors had even lodged a police report suspecting now Castlewood might have been a scam, said the local paper. It quoted an investor as saying she had stayed at the resort with her husband in 2015 on a trip paid for by Castlewood and felt assured that she had invested in a credible development. The couple invested about $210,000, received $16,000 in the first year and no payouts since.
Contacted by Skift, Dream Hotel Group CEO, Jay Stein, said the franchise with Castlewood won’t be terminated. “The hotel continues to operate as it has from its initial opening,” he said.
Stein added the company has a “renewed” focus on North America.
“We have eliminated the Asia corporate team and have moved all global business development and operations out of the global headquarters in New York City. We have a renewed focus on development in North America including the U.S., Canada, Mexico, Central America and the Caribbean. That being said, we will continue to look at opportunities in Asia, Europe, Middle East and Africa with select local developers in top global locations,” said Stein when contacted by Skift.
Dream Phuket Hotel & Spa told The Phuket News that the hotel is not affected by Castlewood’s liquidation. “The liquidation is for Castlewood’s Singapore assets only, and not its Thai assets. The hotel is not being liquidated and we are operating as normal,” its general manager Chris Adams was quoted as saying.
“We have been a strong performer in the Phuket market for the last four years and we will continue to build our business for many years to come,” he said.
Aside from the Phuket property, the only Dream that is in operation in Asia is Dream Bangkok, which the group owns and which has been in the market for more than a decade. Plans to renovate the hotel, comprising two buildings with around 100 rooms each, have not materialized.
But Stein said, “Dream Hotel Group continues to operate the Dream Bangkok and we are still looking at plans for a hotel renovation.”
A Dream Hotel in Pattaya, scheduled to open in 2019, is off. As well, other signed deals, including a Dream and a Chatwal in the Maldives, and one Dream each in the Philippines (Carabao Island) and India (New Delhi). Skift understands the properties have not yet been built and their management contracts are up for grabs.
It’s quite a turnaround from two years ago.
In 2017, a respected hotelier, Abid Butt, was appointed CEO for Dream for Asia, Middle East and Africa. To the industry in Asia, Dream’s Asian ambitions had looked more sure-footed with the appointment.
Butt was CEO of Banyan Tree Hotels & Resorts and vice president asset management of Host Hotels & Resorts. Aside from his expertise and local knowledge, Asian owners were seeking new brands. Brands such as Dream, which is driven by food and beverage, had potential. He also brought in professionals with proven track record for Dream’s expansion push, including Kitmun Fung as regional vice president Asia and Sunny Li as vice president development — China & North Asia.
A source said under Butt, Dream was “a breath away” to signing two further deals in secondary markets in Vietnam and the Philippines. “They were gaining traction with some owners,” said the source.
Dream’s choppy history with Asian expansion shows yet again the importance of having the right partners and leaders, and a real commitment to the region.
Just because Asia has huge opportunities does not guarantee success.
This article has been updated with comments from Dream Hotel Group CEO Jay Stein