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HB EXCLUSIVE: The Next Generation; Trump Hotels debuts new Scion brand

It could have been Trump Jr., but it’s not. It’s Scion.

The newly minted hotel brand—the next generation in lodging from Trump Hotels—made its official debut late last month at The Lodging Conference in Phoenix, ending months of industry speculation about what a planned descendant of luxury-segment player Trump Hotels might look like.

And, apparently, it’s not like anyone’s father’s hotel.

In an exclusive interview with Hotel Business, Trump Hotels’ CEO Eric Danziger and EVP/New Brands and Innovation Kathleen Chiechi Flores, who will wrangle the nascent lifestyle brand, provided insight to Scion’s evolution, current status and expectations for the future, noting while it may have a Trump pedigree, it will birth its own distinct lodging line.

“What we have envisioned here is an upper-upscale, lifestyle brand,” said Danziger, adding the Scion name is “kind of a wink to the Trump brand because it’s representative more of the next generation, the kids.”

The “kids” are Ivanka, Eric and Donald Trump Jr., EVPs of The Trump Organization, who have been largely steering their father Donald’s global hotel business along with Danziger, who was brought on board in August 2015.

Almost from the get-go of settling into his new position, Danziger said he began talking to the EVPs about the future vis-à-vis hotels, while building a team to support an expanded platform.

“I like to invent brands and grow brands and when I came here, it was clear we are well-understood globally as Trump; everybody knows that’s a luxury hotel brand,” said the CEO. However, he stressed to the Trumps that while the luxury brand would enjoy growth in the five-star segment, opportunities would be limited. “There are a lot of people who come to us who would like to do a Trump Hotel, but the reality is it’s not a Trump market or it’s not a Trump project, and we don’t have an alternative and we need an alternative,” he explained.

Armed with almost a half-century of industry experience, including leading such mega-chains as Starwood Hotels & Resorts Worldwide, Wyndham Hotel Group and Carlson Hotels Worldwide, Danziger worked with the Trumps, set in motion internal focus groups to help find direction, and brought in Flores, who the CEO characterized as “more hip and cool than I am.”

Flores, who previously worked with Danziger when he was president/CEO at Hampshire Hotels Management (now Dream Hotel Group) and at Wyndham, most recently served at The Assemblage, a hospitality concept that blends social clubs and work environments and something that will serve as the foundation upon which Scion will be built

“Over that past several years, I’ve worked in social clubs, lifestyle products, very interesting and collaborative spaces. I feel like I’ve been very close to the trends in the marketplace, like the ‘we economy,’ where spaces and technology are leveraged for that collaborative process. When I looked at the fundamentals of what the team had put together for Scion, it gave us just a beautiful platform for continuing to develop the brand,” said Flores.

LEFT TO RIGHT: Donald Trump Jr., EVP Development & Acquisitions, The Trump Organization; Eric Danziger, president/CEO, Trump Hotels; Ivanka Trump, EVP Development & Acquisitions, The Trump Organization; and Eric Trump, EVP Development & Acquisitions, The Trump Organization

According to the executives, the target market for Scion is a “traveler with purpose,” and, as with many lifestyle brands, it is looking to capture business based on psychographics, rather than demographics.

On the nuts-and-bolts side, Trump Hotels will manage the Scion properties, but will not own them, and is looking to plant the new brand in destinations that have “a sense of place,” such as Brooklyn, NY, or Nashville, TN.

Scion will not be franchised nor will it be a “cookie-cutter” brand, and growth is expected to come primarily via conversions across a wide variety of property types and room counts.

For example, at press time, there were Letters of Intent inked for a 420-room urban hotel with 13 food and beverage outlets and a 72-room resort hotel with five F&B outlets. Another in the works is a 160-key project with one F&B outlet. Danziger indicated adaptive-reuse and new-construction projects also were on the company’s radar as good fits. (He noted while sustainability will be encouraged, there would be no mandate for LEED with new-builds.)

The CEO also ticked off a series of potential properties his team is exploring, including a Caribbean resort, a New York City hotel and one on its outskirts, a new-build and an adaptive reuse in two separate Texas cities, a Silicon Valley property in California and one in the Midwest.

“Those kinds of opportunities are real and I hope to be able to announce them. The first one will open early 2017, we hope,” he said, adding, “It definitely will have global potential and possibilities, for sure.”

As might be expected, cost-per-key would be market specific and the design—or as Flores terms it, a persona—for urban, suburban, resort products is continuing to be refined, although there is a strong focus on open, communal spaces for interiors. On-premises revenue generators will include F&B options, including bars and restaurants.

In exploring design, Flores indicated the lens was quite focused. “These [personas]are inspirational guidelines, you might say. We looked at an urban setting. We looked at what differentiates urban from cosmopolitan and what differentiates cosmopolitan from metropolitan. Suburban environments. Resort environments. We kept it pretty simple and pretty streamlined but [the personas]provide a wonderful foundation for owners and developers to say: ‘Aha. I can see my property in this.’ That was really the intention of the personas,” she said.

While some of the personas might be obvious, Flores explained a few and their subtleties.

“Urban is a little more gritty. When we think urban, we probably think downtown. Brooklyn, NY, would fall into something I think is categorically urban. Cosmopolitan is going to be a little bit more international, and metropolitan may be somewhere more like Austin, TX. You still have a city center but it’s not London or New York City.”

For anyone wondering where the guestroom fits in the scheme of things, Danziger was quick to point out “while everybody puts all this emphasis just on the rooms—and our rooms will be beautiful, as well—the reality is most people are in their rooms to read and go to sleep and the other things you do in the restroom. But the rest of it is about your time when you’re not sleeping.”

Danziger expects Trump Hotels’ position as a high-service-level company to trickle down to Scion and further enhance the brand’s community/connectivity ethos. For example, providing headphones to a guest who left them at home.

There’s also a plan to have a loyalty program that goes beyond points or miles but instead offers guest-centric “surprises,” like an unexpected room upgrade, a free glass of wine at dinner or VIP passes to the hotel’s rooftop lounge, which has become the new nexus for selfies.

“The reality is, different markets have different needs, but [there’s also] the need of the consumer to have a unique product, something that caters to them, something that brings in this ‘we’ experience to connect with the community, connect with others. If you think about the success of WeWork [a New York-based firm that provides shared workspace, community and services for entrepreneurs, startups, small businesses and freelancers] as an example of an office coming together, we’re going extrapolate that for hotels,” said Danziger.

“And it doesn’t need to be confined to the lobby,” said Flores. “What we’re finding in these adaptive-reuse and conversion opportunities is the modification of existing structure to allow for that public space. If you can envision activated spaces, where you’re bringing in the local community to engage in your spaces, not just your travelers, that gets back to that notion of connectivity. Our job is to make sure we create the spaces where those things can happen. So far, with all of the variety of projects that have come to us already, we’re finding it possible to create these spaces and envision these activations in these existing and adaptive structures.”

Danziger noted stressing connectivity will be a way of interlacing with each hotel’s community. “We don’t want to have a standard food and beverage [outlet]. In a given community, if sushi is the hot thing, we’ll have a great sushi place. Or, if in another place, the hotel is near a culinary school, we can have fun with it and say to the students: ‘Hey, for this week, create stuff for our customers,’” he said.

The target market for Scion is “a traveler with purpose.” F&B options, including bars and restaurants, along with open, communal spaces for socializing and working are all design elements of the new hotel brand.

And while the spaces also will be geared for working and/or simply being online, Flores said the thinking goes beyond just technology in terms of connectivity.

“We’ve talked about poetry readings, book signings, cooking classes, performance art; actual events you would engage the community in and which guests in your hotel could engage in, bringing those two communities together,” said Flores.

If space allows, a bowling alley and a bar in a Scion might resonate in a particular market, suggested Danziger.

“We provide the thought behind each building, what we think maximizes the owner’s return. We look at the market, go to them and say: ‘Look, this is what we think gives you a home run, this is the cost, this is the pro forma we think will accompany you doing this programming. That’s what they look to us for, to provide this different kind of hotel experience and then what does it take to program it; then it’s all economics. I think owners rely on us. They know we’re good operators. Half the hotels in our company are 130% of fair share. We know how to run hotels. Now, we’re just going to bring that expertise to a different segment; one that’s cool and relevant,” he said.

Asked what type of owner/developer might consider Scion, the CEO went along the lines of family offices, private equity firms “looking to break out of the pack” and an owner who, overall, “wants to have access, wants to have input, and wants people who are focused on them and not as one of 4,000 properties.”

He added there are large numbers of three- and four-star properties that are “either independent or associated with one of the monster companies. The owner of that hotel, no matter who it might be, may say: ‘I want to have something different in the market that competes with the same-old, same-old, just with a different name.’ That’s our market. So it’s a pretty broad and vast group of owners that will be enticed to do this.”

Danziger added another aspect that could appeal to owners/developers is that the new brand is part of a family business. “There is no Mr. Four Seasons. There is no Mr. Rosewood. There is no Mr. Mandarin. There is a Trump family and they are deeply, deeply involved in their business. It’s their life. It’s their legacy. Ivanka Trump looks at every design we do in this brand and Trump,” said the CEO.

That said, while the Trump name is usually front-and-center on anything the organization touches, Scion will not show its pedigree with a “by” tagline, which has become an industry staple for new brands to connect back to their “roots.”

“The Trump brand is very clear globally to consumers that it is luxury,” said Danziger, noting the company did not want to run the risk of confusing customers. “We’re very protective of that brand and the messaging to consumers and owners that we’re not going to confuse the two” or indicate any efforts were in place for the new brand to “junior Trumpize it.”

“What all of our guests will see is incredible commitment to exceptional design, attention to detail and the ultimate in execution of the guest experience,” said Flores. “That is how the Trump DNA will carry through the product.”

Flores acknowledged the greatest challenge in getting a brand off the ground and into conversion/construction is getting the word out, but felt they’ll be able to leverage their existing platform. There’s no plan in place to specifically place Scion product near existing Trump Hotels.

“We’ll always be seeking and knocking on doors where we’d like to be, but I also believe this brand works anywhere,” said Danziger. “Therefore, we’ll be opportunistic… It could work in a tertiary market. We’re not going in with some high-falutin’, stuffy deal; we’re just going in with a product that’s quality, unique, fun.”

“And committed to connecting with the community,” said Flores. “So, anywhere there is a community, Scion can be successful.” HB


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