“The Hills,” an American reality show that examined a group of glamorous, bratty, young Angelenos as they navigated the nightlife and brunch spots of L.A., was a mid-aughts phenom”: A “Days of our Lives” for the Millennial crowd that offered a rollicking mix of period music against a true-to-life show that was awfully scripted. No one cared—and tuned in each week to see who Lauren Conrad would be dating next.
What does the show have to do with the hospitality industry? Nothing really, except that many of L.A.’s hotels served as backdrops for nightly hijinks. But there was a hospitality trendsetter who featured prominently in season three.
Sam Nazarian founded SBE Entertainment in 2002, a lifestyle juggernaut that to this day commands F&B and lodging brands favored by the glitterati—from SLS to Hyde, Katsuya to Casa Dani. Back in 2007, SBE and a partner acquired the Sahara Hotel in Las Vegas with the express intent to convert it into a SLS. It was during this period that Nazarian landed a cameo turn on “The Hills,” and featured prominently in a few episodes working (loosely) alongside one of TV’s most polarizing characters ever—Heidi Montag—which also meant he’d have to come into contact with one of TV’s most hated characters of all time—Spencer Pratt—who then was Heidi’s boyfriend and now husband. The interactions were awkward, clumsy, uncomfortable, but made for great television. If anything, it made you think: Who is this Sam Nazarian and what the heck is he doing on a reality TV show?
“The Hills” may not have catapulted Nazarian to stardom, but it didn’t hurt in burnishing his reputation as a no-nonsense entrepreneur who knew how to develop and build brands. Years later, he sold SBE’s hotel platform to Accor but retained its food and beverage business. Now, and again, he’s looking to redefine hospitality.
Four years after Nazarian checked out of hotels, he got the urge to jump back into the space and he’s doing it this time with a somewhat unlikely partner, Wyndham Hotels & Resorts, a hotel company with a reputation that is high on value, lower on sultriness. But a genuine friendship between Nazarian and Wyndham Hotels & Resorts President and CEO Geoff Ballotti made the union an ideal match.
In what is being billed as “smart lifestyle,” SBE and Wyndham have ambitions with a brand called HQ Hotels & Residences (the HQ a nod to headquarters and being at the locus of communities), a concept with a focus on millennial and Gen-Z cohorts that promises to be “approachable,” and for those consumers that oftentimes find themselves priced out of the somewhat nebulous lifestyle hotel market space.
Nazarian’s penchant for flair is amplified by his equity partner, singer/entrepreneur Marc Anthony and his company Magnus. The brand, with the expectation to open 50 hotels by 2030, will fall under Wyndham’s Registry Collection Hotels, able to tap into the scale of Wyndham Rewards, Wyndham’s loyalty program, which has more than 105 million enrolled members.
It’s already confirmed two deals for projects in Detroit and Montreux, Switzerland, the latter a resort town on Lake Geneva. Both of which will be conversions of existing hotels. In Montreux, The Royal Plaza & Villa Toscane, originally built in 1905 by Swiss architect Louis Villard, with the two villas merged in 1989, will be transformed into a 155-room hotel with 42 residences and is slated to open in 2025. Post-renovation, it will be known as The HQ Montreux Hotel & Spa and include two signature restaurants from SBE’s Disruptive Restaurant Group.
Stateside, The Park Avenue House in Detroit will be revamped into HQ Detroit Hotel & Spa with 174 guestrooms. Detroit has become a locus of hospitality development with properties including the Shinola Hotel and the recently announced Detroit Edition and The Residences at The Detroit Edition, which will be part of Hudson’s Detroit, a mixed-use downtown development that will also include the relocated global headquarters of General Motors.
Leading Man
Every new venture needs a solid leader to do head the day-to-day blocking and tackling. Nazarian and HQ Hotels in August appointed Mike Metcalf as president. Metcalf joins the HQ Hotels from Crescent Hotels & Resorts, where he most recently served as COO of the management company, which currently comprises more than 110 hotels across the U.S., Canada and the Caribbean.
With two deals down and more than 15 more hotels under discussion, Metcalf admittedly said that his focus will be to source new deals and develop brand standards, with a focus on conversions and adaptive reuse opportunities. To help spur growth, SBE announced a $55-million key money and silver equity fund. It has announced already one development partner, LionGrove, which has committed to building 10 hotels in the Caribbean and along the Sun Belt.
What’s ahead for HQ? HOTELS spoke to both Nazarian and Metcalf for further color and build-out of the brand.
HOTELS: Sam Nazarian brings a big name and big cachet. There are myriad brands in the lifestyle space now. How is HQ distinct and why will it thrive?
Mike Metcalf: Unlike other brands that try to develop bar and restaurant concepts for their hotels, HQ by SBE will bring already proven restaurant, bar and nightlife brands to their hotels, with culinary partners including 3-star Michelin Chef Dani Garcia, Chef Katsuya Uechi and Chef Wes Avila. We are creating a central hub for dining, nightlife and wellness that will set us apart and attract both locals and travelers alike. An example of this is our first European location, The HQ Montreux Hotel & Spa
Sam Nazarian: I am also delighted that we have extended our long-term partnerships with both global music icon Marc Anthony and world-renowned actress and co-founder of Latinx culinary brand TOMA, Sofia Vergara, to power the HQ brand. Our brand has been created with the Gen-Z, millennials and Latin markets front of mind, so having Marc and Sofia further support our vision is something we’re proud of.
HOTELS: The first two announced are in Switzerland and Detroit. Two hugely disparate markets. What can we expect in regard to new development? Will it target gateway markets or stick closer to secondary and “unique” places?
Metcalf: We are focused on vibrant destinations that allow our signature F&B brands to enhance their entertainment value. This can be in any location across the globe where Gen-Z and millennials would be attracted to seek such experiences. We will soon announce additional locations that will solidify our presence globally.
HOTELS: How, in the long run, will the partnership with Wyndham help and fuel the expansion of HQ?
Nazarian: Having a brand as strong as Wyndham involved creates exceptional value for the owners and the guests. With more than 9,100 hotels and 110 million Rewards members, Wyndham is recognized across the globe with its award-winning incentive program and tech-centric approach. HQ will provide more options for its guests to earn and redeem rewards, as well as further support our growing global expansion pipeline over the coming years.
HOTELS: Mike, how does your experience helping lead a management company now help segue into leading and growing a global brand?
Metcalf: HQ is a brand, but we are also an operator. The value behind our brand is the strength of our marketing and our operations. We are approaching HQ the same way I did with the management company, giving our owners exceptional value. Now I have the privilege of achieving this with the power of SBE and the exceptional track record of Sam Nazarian.
HOTELS: Growth and development seem to be focused via conversions. Are new-builds in the mix? Can HQ ultimately be a franchise play?
Nazarian: Our focus initially is on conversions. Our portfolio will be a mix of 80% conversion projects and 20% ground-up new construction. We are an incredible option for an owner with an underperforming independent or a franchise at the end of its license agreement. That said, we are seeing a lot of interest from developers looking for a unique option to the traditional options. We are a unique value proposition for either scenario. We have no plans to franchise. We see this as a concept and business plan driven by the success of all SBE brands. We plan to open 50 hotels by 2030, half of which will be in the U.S.
Metcalf: To support our global ambitions, we already have a stellar team of talent. This includes the recent hires of Tania Getzova as general manager, who will focus on transitioning new properties into HQs; Fred Frosini, as SVP of entertainment, lifestyle and brand development, to bring to life all of the SBE restaurant, bar and nightlife brands that will be operating at HQ Hotels, and Odunze Mbanefoh, SVP of finance and strategic planning.
