Patrick Tan

up or renovating existing properties , developing and operating multiple locations will create the scale necessary for investors to buy into the viability of the brand . In addition to scale , the profitability of the existing portfolio will be a large focus for the investors . On the operating

side , top-line revenues , gross margins and other expenses will all be closely scrutinized . Also , owners must buy right — can ’ t overpay for a site ; can ’ t over improve ; or construct over budget . If they are successful , it will be demonstrated by superior yield-on-cost metrics , which will in turn attract additional capital for growth .

Eventually , many emerging brands will look for strategic partnerships to further accelerate growth , gain access to the mass market and , ultimately , facilitate the exit and return on investment for their early investors . These partnerships can introduce the emerging brand ’ s portfolios to the hundreds of millions of major brand loyalty members . We have already witnessed

increased activity in the first half of this year , as nearly all the major brand families have announced such affiliations .

Examples include the partnership between Marriott Bonvoy and MGM Resorts , allowing guests to now make reservations for 16 MGM Collection properties via Marriott ’ s app-driven Bonvoy loyalty program . Similarly , Hilton recently announced partnerships with AutoCamp , which now has seven locations with more on the way , and Small Luxury Hotels of the World ( SLH ), the marketing and reservation partnership of 560 luxury hotels in more than 90 countries around the world .

Hilton has also shifted into acquisition mode . Recent deals include acquiring a

majority controlling interest in the Sydell Group and its NoMad brand , with the aim of expanding to high-end markets around the world , and the acquisition and introduction of Graduate Hotels as a new Hilton brand .

Being acquired by major brands can be an outstanding cash-out outcome for entrepreneurs and investors . These developments demonstrate the investment potential of unique , wellexecuted lodging concepts and represent a quick path for brands to better understand , then tap into , the still burgeoning lifestyle , luxury and experiential lodging niches .

Ours is an era beyond boutique .