Sunset Hospitality: Rising Ennismore of the Middle East?

DUBAI - The West has produced lifestyle hotel brands that prioritize F&B revenues through immersive experiences and entertainment. Think Dream Hotels, 1 Hotels, Edition and those gobbled up by Accor such as Hoxton, Mama Shelter, SLS and Mondrian, among others. Now, an Ennismore of the East may be in the making.

Dubai-based Sunset Hospitality Group is a rising sun in a space thus far defined by the U.S. and Europe. Known more as a leading restaurant, beach club and nightclub operator in the Middle East, the group is now anchoring a global hotel expansion to its lifestyle expertise.

Last November, it launched Sunset Hotels & Resorts, led by CEO Jaime Buxo Clos, formerly its president for Europe, North Africa and Turkey. Assisting Clos as COO is Philipp Knuepfer, who joined this month (July) after more than two decades of experience with Mandarin Oriental Hotel Group.

The mission is to operate 20 new hotels by end-2025, from a clutch today that includes four Mett resorts in Turkey and Spain. The brand counts the likes of SLS, Mondrian, Nobu and Edition in its competitive set.

Beautiful Singapore sunset

In Asia, Knuepfer let on that Sunset is closed to signing an urban resort and a city hotel in Singapore. One is a newbuild with 160 rooms under a management contract, and the other a takeover of a 100-room hotel under a potential lease agreement. Sunset is co-investing in the latter although generally the company is asset light.

Mett Hotel & Beach Resort Bodrum, the first Mett-branded hotel in operation.

Last November, Sunset also announced the debut of a new brand, Somus, with a 250-key hotel opening in Uluwatu, Bali, in 2025. But the deal has fallen through. “We will not proceed with the Somus Hotels,” Knuepfer said.

In Europe, Sunset is co-investing in the Gran Hotel La Florida Barcelona which it will manage under a lease agreement. The hotel will be closed in November for a renovation that will preserve its heritage while breathing lifestyle elements into it. The opening will be in time to celebrate its centenary next year.

By end-2025, Knuepfer envisions the addition of five to six Sunset hotels in Europe, six to eight hotels in Asia, and three to four hotels each in America and the Middle East. Target destinations are Singapore, Thailand, Maldives, Vietnam, Indonesia, Japan, China, Malaysia, Australia, the U.S. (Miami, New York, Chicago, Beverly Hills, Aspen, Scottsdale), Italy, Greece, Switzerland, England, France, Austria, Croatia, Portugal and Turkey.

“We are already present in 22 countries. They are not new markets for us. They are new markets for our hotel expansion, but we already have an operating structure in many of those markets,” he said.

Like Ennismore, F&B accounts for at least 50% of hotel revenues, assuming the property has three F&B venues. Similarly, these outlets are a magnet for non-hotel guests.

“I’ve just returned from our Bodrum hotel and 70% of the F&B business is non-hotel guests,” said Knuepfer, who is based in Singapore.

F&B-driven approach

The difference between Sunset and companies that expanded into hotels from F&B, say Nobu or Hard Rock, is that the group operates more than 40 diverse dining, daylife and nightlife brands, half of which it owns, the rest through partnerships. These brands include Mott 32, in which it has a controlling stake, Black Tap, Sushisamba, Aura Beach Club and Mood Lounge.

We have the brands and expertise in-house – almost any cuisine, bar, nightclub, entertainment you can think of – and that’s our true differentiation.

Philipp Knuepfer

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Founded in 2011 by two entrepreneurs, Antonio Gonzalez and Ahmad Nazih Hafez, Sunset is present in 22 countries and has expanded beyond the Middle East to Europe, Asia and North America with nearly 80 venues, thus far chiefly non-hotels.

So, why hotels now? The group figured that since they operate a lot of venues in nice hotels, they might as well do hotels themselves, according to Knuepfer. “Now we have enough fire power to make it happen,” he said, referring to the launch of the hotels division, the group’s global presence and F&B chops.

“When I talk to owners, developers and asset managers, the moment they see the food and beverage power of Sunset, they get very interested in us. F&B is always important, especially to lifestyle. But many owners, developers and asset managers need to go to third-party restaurateurs, third-party chefs or celebrity chefs. We have the brands and expertise in-house – almost any cuisine, bar, nightclub, entertainment you can think of – and that’s our true differentiation.”

Knuepfer said he treats the company’s daylife, nightlife and dining divisions “almost like a third-party,” seeking their inputs on what facilities and brands are best for the hotel in question.

He agrees there is an F&B rejuvenation in hotels globally but having a restaurant perspective makes Sunset fundamentally different. “I’ve been a hotelier and F&B director. I don’t want to offend hoteliers, including myself [chuckling], but when hotels do F&B, it’s different from when free-standing restaurateurs do F&B.”

That said, not having a hotelier perspective to run hotels should be a concern to investors, especially for a fledgling brand like Sunset’s Mett. The appointment of Knuepfer should address that, given his luxury hotel background, albeit Mandarin Oriental is classic luxury.

Knuepfer is excited to embrace a changing luxury with Sunset. “Customers want a different luxury experience. I don’t think they want to reduce their standards, but they want a more relaxed luxury or lifestyle. There is a focus on getting together, on having fun, be that through dining in our case, or through wellness or sustainability.

“Our mission is to bring people together and have them enjoy life. We do this successfully in our restaurants, and in our hotels. It’s about having a choice in luxury, rather than being pressed into dress codes.”

Loh Lik Ping, director of Singapore-based Unlisted Collection, owner-operator of hotels and restaurants in Singapore, Shanghai and London, sees Sunset succeeding in hotels although there are likely to be challenges.

An example is entering a market like Singapore, which has so many restrictions and regulations on foreign manpower. “None of the other markets they operate in have such onerous rules. They have to adapt their operations to be very much less reliant on foreign talent. They come from the Middle East but almost all their executives are Western and Western-trained,” Loh said.

Nevertheless Loh, who has had a fair amount of interaction with Sunset said, “They are really smart, ambitious and growth focused. There’s a strong streak of the cowboy in them but in a refreshing rather than wild way. So, I can see them succeeding because they are bold and willing to take some risk but with a good grounding in the business fundamentals.”