Boutique Design | boutiquedesign.com

Boutique hotels have become one of America’s hottest exports.

By Matthew Hall

Six years ago, John Russell launched NYLO Hotels, which subsequently opened loft-style lifestyle properties in the suburbs of Dallas and Providence, R.I. But when Russell left that firm in late 2010 to head up Advaya, a new hospitality company, his ambitions were more global in scale.

Modo, Advaya’s lifestyle hotel flag, is targeting Brazil and India, as well as major U.S. cities. Russell’s mantra for the new brand, which will feature a Bauhas-inspired concrete-and-glass shell and interiors that can be tailored to the hotels’ environs: “It can go anywhere and will be everywhere.”

In a similar vein, while Morgans Hotel Group made its name by opening high-profile locales in such cities as New York and Miami, its current expansion plans mainly involve overseas sites. In recent months, Morgans has announced it will open Delano hotels in Cabo San Lucas, Mexico, and on the Aegean Sea in Turkey, as well as a Mondrian in Doha, Qatar. Morgans ceo Michael Gross says those moves reflect his firm’s determination “to become a global leader in lifestyle hospitality management.”

Even “The Donald” is moving beyond America’s borders. Donald Trump, whose four-year-old hotel chain began by opening properties in New York, Chicago, Las Vegas and Waikiki, launched his first site outside the U.S. in July, in Panama City, Panama. And later this year, his company will take the wraps off a new hotel tower in Toronto.

What’s driving these U.S.-based boutique brands (and others, including Gansevoort Hotel Group, Desires Hotels and Chatwal Hotels & Resorts) into overseas markets? Jeffrey Davis, managing director of Jones Lang LaSalle Hotels, says three main factors are at work: a relative lack of suitable boutique sites in America; a rising tide of younger, wealthy overseas investors who are interested in backing boutique projects; and a desire by hotel operators to tap foreign capital sources for eventual use back in the States.

You may be a bit surprised by Davis’ assertion that the U.S. lacks sites for boutique brands. After all, much of the country’s commercial real estate market has been in the doldrums for the past several years, and many hotel buildings and sites have been on the market at discounted prices.