Boutique hotel chain Gansevoort opened its first hotel in the fashionable meatpacking district in downtown New York City in 2004. This first hotel, with its signature 14 metre outdoor rooftop pool and bar, served as a blueprint for a unique brand which today positions the group in a niche newcomer spot alongside the big luxury hotel chains of the world such as the Four Seasons. As a full-service hotel group with prices about a third less than the top luxury brands, Gansevoort is not only proving recession-proof but is embarking on a strategy to internationalise its business.

The timing for expansion may not seem logical due to the downturn, but chief operating officer Elon Kenchington believes the counter-cyclical strategy will pay dividends in the long term. “We want to open on a crest of a wave, on an economic upturn and ride it upward,” he says. While the current economy means many hotel groups are suffering due to lack of demand – from business travellers in particular – Gansevoort’s diversified target market, as well as a general shift in the market away from expensive hotels, is working well.

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Broader umbrella

Gansevoort is a subsidiary of WSA Management, a real estate development and management firm which has developed and owned more than 1.8 million square metres of office and industrial space as well as 2000 apartments and 2000 hotel rooms. It follows WSA’s lead by changing its business model to suit the part­icular market. “The best time to build is when the economy is soft, that is if the project is secure financially and fully funded,” says Mr Kenchington, who is in the process of developing Gansevoort-owned sites in Moscow and Kiev. The company is developing the site of its second hotel in Manhattan, whereas in other markets, such as Turkey, the Czech Republic, Toronto and the Middle East, the group favours joint ventures and management deals. Mr Kenchington says this an ideal way of overcoming cultural differences. “But we don’t just jump on management deals, because they have to fit in with our brand, which is absolutely paramount,” he says.

The company is currently discussing a management deal in Istanbul. As an emerging city with a huge amount of wealth, Mr Kenchington hopes the new location will be a springboard into the wider region. “Frankly, it’s relatively easy to fast-track a project in Istanbul while learning more about the regional business community than expanding directly into other countries in the region; Istanbul will be, without a doubt, a success and is low risk,” he says. The firm had previously been approached by a partner in Dubai, but that was before it had started to internationalise its brand. “At that stage it was too far from our core market and in hindsight it was the right decision,” he says.

The brand has further potential for penetration into Western markets; the group is keen to enter the UK and is actively looking for a development site in London. “London will happen, it’s just a question of time,” says Mr Kenchington. And waiting for the right opportunities characterises the company’s expansion ethos. For example, the company has been looking to expand in Los Angeles for more than five years. “There are virtually no sites available in the area we are looking at,” he says.

Brand thinking

In March the firm opened its Turks and Caicos Islands hotel under a management deal. The new hotel exemplifies the way in which the group protects its brand – choosing retail, entertainment and restaurant partners to create the right image.

Mr Kenchington says the company has plenty of offers from companies with “big money” but it remains picky, valuing reputation and exclusivity to the last.

COMPANY PROFILE

GANSEVOORT

Head office

New York City, USParent company

WSA ManagementBusiness activity

Developing and operating hotelsLocations

New York, Miami, Turks and Caicos Islands