Mike DeFrino, CEO of Kimpton Hotels & Restaurants, was first hired by the brand as the GM of the Alexis Hotel more than 20 years ago. In the years since, Kimpton has grown a lot—and has been acquired by InterContinental Hotels Group (IHG)—but has always remained true to its quirky nature. The brand’s top executive recently sat down with Hotel Business to discuss Kimpton’s international expansion, its approach to franchising and the spread of boutique hotels to secondary and tertiary markets.
Two years ago, Kimpton opened its first European location. How have expansion efforts in Europe been going? We’re just at the forefront. When we were acquired five years ago, other than Canada, we’d never been outside the U.S. After the IHG acquisition, one of the big tenets was to grow the brand globally; IHG has the ability, reach and infrastructure to do that. We plugged into that, especially on the development side, and trained their development sales managers on how to sell a Kimpton—what it is, how to explain it, what we bring to the table in terms of design, restaurant concepts, training and style. They found a fair amount of success—it’s been a good time in the industry to be doing that.
When you first go into a region, you want to go in major gateway markets. Our first opportunity was in Amsterdam, one of the hottest hotel markets in Europe, so that was an easy decision. We got into an agreement with a portfolio for four hotels in the U.K., so that’s how we ended up in Scotland, Manchester and London. Paris was an obvious decision, Barcelona was an obvious decision. We would love to be in perhaps some more leisure destinations in Europe.
How about elsewhere in the world? We also opened the Grand Cayman hotel, and we’re expanding more into the Caribbean; we think there’s a lot of opportunity for our type of hotel there. We’re opening in Roatan—an island off of Honduras—as well as in Grenada, and we have a few irons in the fire in coastal Mexico as well. We think there’s going to be a good story to be told there.
Then, Asia is just beginning to evolve in terms of boutique hotels. They have great luxury hotels, great traditional hotels, grand and beautiful, but they haven’t really leaned in—even some of the major markets like Tokyo or Singapore—to a big boutique hotel presence. We’re seeing that changing and we’re at a good spot for that. IHG has good distribution, good presence and credibility there, so we’re finding opportunities. I think there’s a reluctance in some of those markets to go true, completely independent still. Not so much in Europe, of course, but in Asia. Kimpton and IHG provide a certain safety net.
As you’re opening these hotels internationally, have there been any lessons learned? Fortunately, in most of the markets we’re going into, our parent company has already broken the ice. We’re able to use their lessons learned and resources to get a lot of work done. That said, there are different cultures that we need to be sensitive to.
While boutique hotels were traditionally found in major U.S. markets, we’re seeing a demand for this segment in secondary and tertiary cities. How is Kimpton approaching this? Bill Kimpton was doing it 35 years ago when he went into Portland—Portland was not really on the map back then. But in the past several years when we’ve opened in secondary markets—we went into Milwaukee, Cleveland, Austin and Nashville, and other small cities—we found they were not saturated with boutique hotels and, in some cases, had no boutique hotels. We were very successful in those markets. There was a thirst or a pent-up demand for our type of hotel in these secondary markets.
There’s also a demand for secondary locations in primary markets. Once you’re in Manhattan, it’s easy to go to Brooklyn. We’re finding those extensions to be popular right now. We’re not going into uptown or downtown, but you go into the subculture of a major market. We’re happy to be in these little niche areas that are fun to discover.
It’s like going to Honduras. That wasn’t on the list, but it makes sense; we have this big presence in Grand Cayman, and we can run a lot of hotels regionally. We think the same thing is going to happen in parts of Mexico. We’re opening in Mexico City next year, and we think there’s a lot of interest in what we do. Mexico hotel developers are looking for ways to tap into the American traveler; they’re looking for American brands that are credible, that are trusted, that are unsaturated in their markets. Kimpton is one of those brands where it can be the first—and it doesn’t have to be luxury. It can be upper-upscale; it can act and feel—but not be built out—like an ultra-luxury hotel.
Tell me about your approach to franchising. We’ve chosen a few different operators who we think can help deliver the experience we’re looking for. We’re still very involved in design, still very involved in restaurant concepts, very involved in look and feel, and will be involved in the training and the openings of the hotels, but through these partners, we’ll be able to go to places like Omaha, places we wouldn’t have gone necessarily on our own right off the bat.
How do you foresee that franchising strategy evolving? In order for the brand to evolve, I anticipate that we’ll probably balance out at about one-third franchise. I don’t think it’ll get to 50%, not in short order, anyway. We’re going to want to continue to control the product, but the people in the groups that are managing our hotels are like-minded and they’ll be great stewards of the brand; we know them—a lot of the people who run these are old Kimpton employees, so we have a lot of faith in their direction and their management style. You have to look at opportunities. You wouldn’t want to pass up a tremendous location in a great building with a great owner who appreciates good design, and be reluctant to dive into that. Although we’re protective of our brand, we’re also a very daring group. HB