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New York-based Dream Hotel Group has evidently dropped plans to expand in Asia, closing its regional office after recently hiring new executives to push for growth.
Dream first established an Asia-Pacific development team in Bangkok in early 2017. But Dream’s presence in Asia was further troubled by last week’s news that the developer of Dream Phuket Hotel & Spa, Singapore-based Castlewood Group, is in liquidation. The hotel opened in November 2015 under a franchise agreement which also called for “20 Dream Hotels over the next 10 years.”
The Straits Times of Singapore reported that Castlewood owed creditors, comprising mostly retail investors, about $107 million. Some of the disgruntled investors had even lodged a police report suspecting now Castlewood might have been a scam, said the local paper. It quoted an investor as saying she had stayed at the resort with her husband in 2015 on a trip paid for by Castlewood and felt assured that she had invested in a credible development. The couple invested about $210,000, received $16,000 in the first year and no payouts since.
It’s not clear if the group would continue its association with Dream Phuket.
However, Dream Phuket Hotel & Spa told The Phuket News that the hotel is not affected by Castlewood’s liquidation. “The liquidation is for Castlewood’s Singapore assets only, and not its Thai assets. The hotel is not being liquidated and we are operating as normal,” its general manager Chris Adams was quoted as saying.
“We have been a strong performer in the Phuket market for the last four years and we will continue to build our business for many years to come,” he said.
Aside from the Phuket property, the only Dream that is in operation in Asia is Dream Bangkok, which the group owns and which has been in the market for more than a decade. Plans to renovate the hotel, comprising two buildings with around 100 rooms each, have not materialized.
A Dream Hotel in Pattaya, scheduled to open in 2019, is off. As well, other signed deals, including a Dream and a Chatwal in the Maldives, and one Dream each in the Philippines (Carabao Island) and India (New Delhi). Skift understands the properties have not yet been built and their management contracts are up for grabs.
It’s quite a turnaround from two years ago.
In 2017, A respected hotelier, Abid Butt, was appointed CEO for Dream for Asia, Middle East and Africa. To the industry in Asia, Dream’s Asian ambitions had looked more sure-footed with the appointment.
Butt was CEO of Banyan Tree Hotels & Resorts and vice president asset management of Host Hotels & Resorts. Aside from his expertise and local knowledge, Asian owners were seeking new brands. Brands such as Dream, which is driven by food and beverage, had potential. He also brought in professionals with proven track record for Dream’s expansion push, including Kitmun Fung as regional vice president Asia and Sunny Li as vice president development — China & North Asia.
But this new Asian team also proved short-lived as they have all left the company. A source said the decision to close the office was announced in April.
Dream Hotel Group’s CEO Jay Stein and chief development officer David Kuperberg did not respond to questions from Skift at press time as to why the chain decided to close its Asia office and whether it was dropping Asia expansion for good. The group’s development team on its website no longer includes AMEA, only the Americas, Latin America & Caribbean.
A source said under Butt, Dream was “a breath away” to signing two further deals in secondary markets in Vietnam and the Philippines. “They were gaining traction with some owners,” said the source.
Dream’s choppy history with Asian expansion shows yet again the importance of having the right partners and leaders, and a real commitment to the region.
Just because Asia has huge opportunities does not guarantee success.
Photo Credit: Dream Hotel Bangkok. Dream Hotel Group
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