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.
Under the arrangement, Mr. Pritzker kept the boutique hotel operator Joie de Vivre, which was founded in the 1980s by Chip Conley, now head of global hospitality for home-rental company Airbnb. Mr. Pritzker also acquired the Thompson brand.
Commune has 31 hotels with about 4,000 rooms, and an additional 13 properties in the pipeline, the company said. Alila brings on board 11 more hotels, in Indonesia, India and Oman. Most of these properties have fewer than 100 rooms and rates as high as $800 a night.
The company is also about to open a new microhotel brand called tommie. It is the latest entrant to offer rooms of 150 to 200 square feet, roughly half the size of a typical U.S. hotel room, aimed at guests who want to spend time in the city or socializing in the hotel lobby, rather than in their rooms.
Tommie opens its first property in downtown New York this fall, with another to follow in midtown Manhattan in 2016.
While the space will be compact, rooms will include more upscale elements such as high-end linens, floor-to-ceiling windows and plush king beds. Commune owns the brand and manages the properties.
Quadrum Global, a London-based private-equity firm, owns the two tommie hotels opening in New York. Quadrum’s head of U.S. investments, Seth Schumer, said the new brand could do well as part of Commune’s overseas effort.
“Tommie would be great in London and probably great in Hong Kong,” said Mr. Schumer. “It could work in any city where it’s expensive to stay and land costs are high.”
