New blood for Ennismore’s Delano brand

Ennismore has a new partner in its Delano brand with news breaking on Thursday that Cain International is acquiring a minority stake. No money was exchanged as part of the deal, according to Phil Zrihen, head of Americas for Ennismore.

Cain, which acquired the still-closed South Beach flagship Delano in 2020, will subsequently collaborate with Ennismore to support Delano’s global growth ambitions and help deliver its current expansion pipeline, which currently includes third-party management deals in Seoul, Istanbul, and Cartagena, and several other locations under negotiations. Zrihen told Hotel Investment Today that Cain could potentially co-invest with other developers on projects.

Phil Zrihen

“There’s no capital contribution [in the partnership] – it’s being done in the context of the management contract with us in Miami Beach. We are structuring it that way,” Zrihen said. “We are looking at opportunities together, but there’s no obligation for them to invest in new assets. Obviously, they are a real estate player, and the intent is to try to work together to grow the brand. But we are the ones who are operating and managing all the other properties. So, a majority of the growth is going to be third-party brand management.”

Zrihen said that because of the pre-existing relationship between the two parties, conversations about a closer affiliation have been ongoing. With Miami Beach having become the hub of the pandemic recovery, it became even more important for the partners to figure out the way forward there, giving the property and brand a fresh start to take advantage of what is expected to be ongoing strong market conditions. “There’s quite a bit of traction around both the Delano and Maison Delano brands. So, we're just happy to get it going and have a partnership to help grow it together,” Zrihen said.

Currently, a licensed Delano is open in Las Vegas and the recently launched, urban-focused Maison Delano (“a bustling cocoon without too much fanfare”) opened its first location in Paris about three weeks ago

As part of the partnership, the flagship Delano South Beach will undergo a substantial renovation with a reopening date yet to be determined. Undoubtedly, the brand will be aided by Thursday’s announcement, including having the Miami Beach asset back on track.

Expect Ennismore to look to Cain, which last year invested $900 million in Aman Group alongside Saudi Arabia’s Public Investment Fund, for their perspectives on how to grow the brand. It is also worthy of note that Cain was an investor in SBE, the former owner of the Delano brand. Since they own the flagship, Cain will also help define what the brand will do moving forward, according to Zrihen.

Growth will focus on selective gateway cities such as London and Paris, as well as resort markets with enough demand to justify premium rates. “I think Maison Delano has a little more flexibility in terms of room counts, urban centers and resort destination,” Zrihen added. “But we’re going to focus on growing responsibly versus going crazy.”

Zrihen added that interest in residential components is very high for a lifestyle brand Like Delano and it should play a role in almost every new project.

How the brand evolves in the current climate has been an ongoing conversation and it will have at least a few nods to the legacy property in Miami Beach, Zrihen said. What will change is more of a focus on fitness and wellness, and the Miami property will take food and beverage deeper into the property, including at the beach, pool and surrounding bungalows. “We’re trying to ensure that there’s that balance between what the Delano was and what it needs to be,” Zrihen said.