Dorchester Group Remains Cautious But ‘Committed’ To Expansion

NEW YORK— London-based Dorchester Group, whose holdings include California’s Beverly Hills Hotel, is continuing a search for more luxury properties, but it plans to err on the side of caution before just jumping on any opportunity. Here in the Big Apple April 18, the Group’s COO Ricci Obertelli told HOTEL BUSINESS® his company “is committed to expanding and is looking for opportunities to expand,” but stressed “we don’t want to make any mistakes in acquisitions. We’re very targeted.” He added the company “might do something in the next 12 months.” Two years ago, DG’s name had been tossed about as a possible contender for acquiring hotels within Starwood Hotels and Resorts’ Ciga portfolio of luxury European properties. However, no deal ever materialized with DG and the portfolio remains on the block. The Group, which is 100% owned by the deep-pocketed Brunei Investment Agency, last year did take on the management of the five-star 187-room Hotel Plaza Athénée in Paris following its acquisition by BIA from Prince Jefri Bolkiah. DG’s other properties include The Dorchester in London and the Hotel Meurice in Paris. “The expansion of the group is very focused and we know that the Dorchester Group brand name has value,” Obertelli said. “We envision adding one property at a time because we believe that’s the natural way to grow. We might be able to add two properties [at the same time]if the opportunity arises.” The COO acknowledged that Europe and North America are targets, but said entry “depends on when [certain cities]become available for us. The main gateway cities in Europe would naturally be able to be associated with the Dorchester Group. We have a very loyal group of clients who follow us and we’re trying to expand where we feel their destinations take them. New York would be an obvious target because of the density of our market here in North America.” That market represents some 35%-40% of business for the three European properties. Toward that, Obertelli said in terms of investments in sales and marketing resources (e.g., advertising, corporate client visits), DG’s largest investment is in North America and will continue to be. “We feel our product is very accessible and there is a very good marriage between our hotels and the North American market.” Right now, Obertelli said the company is looking to consolidate the databases it has for the hotels to ensure there’s “cross-fertilization” as far as hotels and clients are concerned. “Everything is driven by the client,” said the COO, who pointed to the multimillion-dollar renovations experienced by both the Meurice and the Dorchester, which includes layering in advanced technology. “It’s a much bigger step than perhaps other hotels have taken, but it’s going toward the profile of client that is much more relevant— and prevalent— in our business mix.” Obertelli said he’s been encouraged at the increase of business for the four properties, which were affected “in line like everyone else in our segment of the market immediately after the [Sept. 11] events. What was pleasantly surprising for us was the pickup at the beginning of the year; it’s been very positive. We have actually seen very little changes in terms of comparisons with previous years for the first three months. So, we’re looking at things in an optimistic way.” He added the hotels did not compromise standards or service in reaction to the downturn, and “worked creatively” to keep operations and staff functioning at peak performance. “The beginning of the year has been very good for us,” said Obertelli, “and North America remains very important for us.”