Sonesta shares more on plans for The James

Newsmaker Sonesta International Hotels Corp. is starting to offer details on its plans for The James brand, the latest arrow added to its growing quiver after acquiring the intellectual property for the lifestyle concept from New York City-based Denihan Hospitality Group in April 2022.

Chief Development Officer Brian Quinn said Sonesta took a few months to truly wrap its arm around the brand and the best potential positioning, which it will franchise as well as manage in the U.S. and Latin America, using the licensed The James Nomad, New York, as its prototype. There will be an increasing emphasis on beverage programming and timeless design, according to Quinn, who estimated conversion costs in the range of $60-70,000 per key.

“One thing I have that my competitors don’t is market availability,” Quinn boasted. “In addition, you can access our executives and I have a capital partner (Service Properties Trust) that’s invested.”

The brand will get its first flags beyond New York in Chicago and Washington, D.C., where there are duplicate Royal Sonesta hotels to be converted. Service Properties Trust (SVC) has also suggested it wants to have marquee asset in Los Angeles and Miami. So, those are the two specific markets Sonesta is watching closely for James opportunities, according to Quinn.

Sonesta also expects to grow in Latin America via its master franchise agreement with Colombia-based GHL Hoteles and it has brought in a development person to spearhead efforts in Mexico and the Caribbean. “Mexico is on everybody’s radar and travel calendar because it took a different approach to COVID,” Quinn added. “They’re trying to get the safety and security concerns under control, and they continue to make headway.”

It was September 2021 when Sonesta Franchising debuted in the U.S. with 14 brands and a complete platform of franchise services, hotel operations and franchise support. The company went from less than 100 hotels at the beginning of the pandemic to nearly 300 before it acquired RLH Corp. in early 2021. Today, it has more than 1,200 properties totaling 100,000 guest rooms across 16 brands in eight countries.

The James brand came into the portfolio in 2022 when SVC acquired the IP as well as four other hotels in New York City from Denihan.

Quinn added that in true SVC fashion, the plan is to try to grow The James without much hesitation, adding that new deals should be announced in 60 to 90 days.

“We are going to get after it pretty quickly,” Quinn said. “We believe it’s our obligation to take out some of these major markets where the franchise and partner community will build out the Sonesta spokes and the extensions, and we were able to even demonstrate that with the James in Chicago and D.C.”

While the brand is likely best suited for major markets and destinations, Quinn thinks it might have deeper potential. “It’s also been interesting for me to watch the secondary markets where people are starting to demand some of those lifestyle choices... The confluence with sports, entertainment and culture – I think will drive demand for The James from some interesting places. So, it’s going to be exciting to see where it goes.”

For now, The James brand will be a conversion play due to challenging macro-economics, but Quinn added that “the worm will turn, and somebody will get a great piece of land in a great market where the boutique and lifestyle concept will work.”