CORAL GABLES, Florida — Sonesta International Hotels Corp.’s owner Service Properties Trust and operator RMR Group chose to be bold with Sonesta following the onset of the COVID-19 pandemic and expand its portfolio in countries outside of the U.S., including in Latin America.
In 2022, Sonesta renewed its ongoing master franchise relationship with Bogota, Colombia-based GHL Hoteles and hired three lodging development leaders with experience in the Latin America region.
Brian Quinn, chief development officer of Sonesta, said during an interview with Hotel News Now at the recent Hotel Opportunities Latin America conference, that this move, along with its 2021 acquisition of RLH Corp., is all part of RMR Group’s and Service Properties Trust’s broader goal for Sonesta.
“That really set [us] up for an Americas strategy. If you’re going to bring that talent and those brands together and build out the commercial engine and platform, the natural mechanisms for growth include going into Canada, going into Mexico and launching a LatAm and Caribbean strategy,” he said.
GHL has a footprint of hotels in Central America that Sonesta knew it could continually build off of, Quinn said.
“As soon as we stabilized the business, we engaged them and said, ‘Hey, we would really like to start the engine up all around the world,’” he said. “Now I think we’re [an] even stronger partner.”
He said there was quick alignment between GHL and Sonesta to fully engage, do an early renewal and make a commitment with each other to grow. This renewal was the linchpin for Sonesta’s overall growth strategy across Mexico, the Caribbean and Latin America, he said, and to provide infrastructure to expand beyond its Sonesta Hotels & Resorts and Sonesta Posadas del Inca brands.
Sonesta’s strategy now includes introducing its Sonesta Select, Sonesta ES Suites, Sonesta Simply Suites, The Royal Sonesta, The James, Red Lion Hotel/Red Lion Inn & Suites and Signature Inn brands to the region.
According to Sonesta’s company website, it first entered the Latin America region in 1998 through flagging the Sonesta Hotel El Olivar in Lima, Peru. The company has since then added Sonesta Hotels in Colombia, Ecuador, Chile and Peru.
In April 2022, through its master franchise relationship with GHL, it opened the Sonesta Hotel Cali in Colombia, marking the company’s 14th property in Latin America and eighth in Colombia. Quinn said locations such as Brazil, Panama, Mexico City and the Dominican Republic are next on his team’s radar.
Adding Marco Roca, the group’s development lead – South and Central America, Mexico, has allowed Sonesta to properly engage with and be present in the region, Quinn said.
Another key piece to the overall strategy, he said, is having presence in key feeder markets to Latin America, such as New York, Miami, Los Angeles, Houston and Dallas.
In addition to opening the Nautilus Sonesta Miami Beach, Sonesta is currently working hard to bring more hotels to Miami and Los Angeles, he said. In 2022, the company added four hotels in New York to its portfolio, including The Benjamin Royal Sonesta New York, The Shelburne Sonesta New York, The Gardens Sonesta ES Suites New York and The Fifty Sonesta Select New York.
Its presence in Houston and Dallas is already strong.
“We’ve got a lot of supply across a lot of the different [Sonesta] brands in those Texas markets that are inbound to Mexico, specifically, but even further if you think about Copa Airlines, I think Houston is still their biggest hub in the states. So having good distribution in that market is critical,” Quinn said.
Overall, a key component to Sonesta’s appetite for ramping up development in Mexico, the Caribbean and Latin America is the consumer’s desire to travel there.
“The incredible pivot to leisure … and that people can work from anywhere, all of these places are within two, three, four hours of the Northeast,” he said. “The other consumer piece that’s real is guests want an experiential component to their lodging experience. All of these islands, whether it’s a volcanic island [such as] St. Lucia, or it’s a sandy beach island [such as] Cayman, all of them have history, experiences, food and unique beverages, and that’s right where the consumer is.”
Opening a hotel in a leisure beach destination today would mean needing to outfit the hotel in a way that is conducive to both work and play, Quinn added.
“We do recognize people do business while they’re on vacation, nobody unplugs anymore,” he said.
In urban locations such as Mexico City, which Sonesta does not currently have a presence in, Quinn said the strategy would be to first open with a hotel under its James, Royal Sonesta or Sonesta Hotels and Resorts brand. That way, the amenity offerings are rich, he said.
“The [food and beverage] has to be on point, the meeting space has to be on point, and also [be geared toward] the experiential piece, because we do know on a traditional business trip [people] are adding leisure to it as well,” he said.
Since the start of the COVID-19 pandemic, Quinn said he’s been impressed with how aware the capital markets are about Mexico and have come to embrace boutique and lifestyle hotels.
“The capital markets have started to recognize that if you get the boutique piece right and you get the lifestyle piece right, that there is real margin there,” he said. “That’s a positive for us, for equity and debt to come into the broader region.”
However, hoteliers need support from local municipalities. Having Roca on the region’s development team is powerful because he has relationships with the right people and has “seen the ebbs and flows of how you get deals done,” Quinn said.
Quinn added Sonesta comes to the market in a unique way, and his team focuses on the three F’s: “fast, friendly and flexible.”
“In this part of the world, you have to do that to get deals done; it’s in the DNA of how business is done here. If you’re rigid, don’t follow up and you don’t recognize that each of these countries are different, each of these markets are different, you’re going to create an obstacle for yourself,” he said.