The sky's the limit for Yotel

With Yotel New York opening this month, IFA Hotel Investments president Joe Sita tells Louise Oakley why this new brand represents the future for the hotel industry.

May is a momentous month for Joe Sita. On the 15th of this month, the IFA Hotel Investments (IFA HI) president will open the first city centre Yotel in the enviable location of Times Square West, New York.

The development of the hotel, which parent company IFA Hotels & Resorts (IFA HR) owns alongside its 85% stake in the Yotel brand, has been a labour of love for Sita, who has flown back to the head office in Dubai from New York the day that I meet him.

Sitting in his office in the North Residences of the Fairmont Palm Jumeirah project — another IFA HR development — Sita is visibly eager to give me a virtual tour of Yotel New York on his iPad.

Having stayed at the Yotel in Gatwick airport when it opened back in 2007, this is a launch I’ve been highly anticipating, no doubt along with many in the industry keen to see the flagship Yotel and the first outside of an airport setting.

In some ways, Yotel New York follows the traditional hotel model, offering room nights as opposed to the shorter multiples of four-hour-long stays at the airport hotels, and F&B options too.

In many other respects, however, Yotel is vastly different from a typical city hotel and it is these aspects that Sita draws my attention to. The sleek white and purple design looks cool, yes, but more importantly, he explains its functionality.

“Yotel New York is very ergonomically designed whereas a lot of the other hotels and hotel rooms — these so called boutique or designer hotels — they’re aesthetically pleasing but they’re functionally atrocious,” says Sita, clearly not one to mince his words.

The public areas have that “very Virgin upper-class lounge feel” while the rooms are inspired by an Emirates first-class cabin.

Renowned designers Softroom — responsible for Virgin’s upper-class lounge design — and David Rockwell were enlisted to create the concept, which ultimately is designed to put everything the guest needs right at their “fingertips”.

“We’ve gone to a lot of trouble to design this room, to make sure that all the sockets are in the right place, the lighting is well thought of, the bathroom has a monsoon showerhead, the window is at the back, there’s a 32’ flat screen TV with full ipod connectivity,” explains Sita.

“It offers very ergonomically designed storage, you can put luggage under your bed, you’ve got two lots of hanging space, a fully organic mattress, and the moving bed which [transforms from a sofa to a bed] and creates more space.

We’ve got a full heat pump system that’s quiet and because the hotel is Silver LEED-certified, when you leave the room everything shuts down automatically. When you come back in it immediately comes back on. It’s very energy efficient, it’s very quiet, we’ve used much better glazing, the list goes on and on,” continues Sita.

Sita certainly has a point — I’m unable to recall a hotel where my luggage will fit under the bed, but why has no-one done this before?
“Our beds are purpose-designed by a specific manufacturer and they’re motorised as well, so we’re unique,” says Sita.

“We even measured the average-sized piece of luggage that most people who travel for a day or two travel with and these fit perfectly under there.”
This means that Yotel New York’s 669 rooms, which start at 170ft², can be much smaller than the average-sized four-star hotel room of between 300-4000ft², says Sita, although in New York, “for the comp-set the rooms are about the right size”.

“We just went to a lot of trouble designing the room so it works well and not just being clever about a fancy piece of art or something’s that’s cute in the room. That’s the difference in this room,” he says.

Target Market
My next question for Sita, naturally, is to ask whether Yotel New York is specifically targeting the short-stay traveller.

“Not necessarily,” he says. “We like to think that we cater for all markets here. But New York is not a long-stay market generally speaking.
This is a transient hotel; we’re located next to the Javits Centre, which is the largest exhibition centre in New York, and we’re the closest hotel of this size, so we’re envisaging a large corporate market that comes in and stays one or two nights.

“We’re also envisaging quite a large European market that might come in and stay three or four nights in New York and we can still accommodate that in terms of two people because there’s plenty of room.

We’re not in any way trying to discriminate against any of the market segments. We think we’ve got a product that fits all markets and all people,” he asserts.

This brings us to the reason why, when based on his more than 30 years experience in the hotel business, Sita believes that Yotel “represents the future”.

“I think what’s happened is that we’ve gone through phases in the industry where hotels have been very compartmentalised into saying ‘this is either a budget or economy hotel, a four-star or upscale, upper upscale, or luxury hotel’ — we sort of segment the market in this way.
Why I believe this is the future is because this is a product that appeals to all markets,” asserts Sita.

“The way we position Yotel is affordable luxury. So we provide a very high quality product in terms of the fit-out, the ergonomics, the MEP and the LEED certification — typically all of this used to be confined to the more upscale or upper upscale and luxury products where you have space as well as high quality fit out.

“What we’ve done is really combine those things and you can actually have a very high quality product and an exceptional experience in a much smaller space.

And that means that on a value for money basis, bang for buck — whether you’re a developer who’s looking to maximise the amount of product you can build on a particular bit of real estate or you’re a customer looking for better value for money — this is the way of the future.

So in other words, less doesn’t necessarily mean less, less can be more in this case,” he explains.

What's Next?
When it comes to what’s next for Yotel, Sita says the “sky’s the limit”.
“Once we get New York open we are very keen to use that hotel to showcase the brand, in particular the city centre brand.

We have a number of opportunities in London that we’d like to get involved in, we have a number of other opportunities in airports in the US that we’re getting involved with, one being JFK at the moment which we’re very excited about.

“We’re also looking for strategic partners to [expand] the brand, because we can’t do it all ourselves,” adds Sita.

“We want to take it to Asia in particular, into China, into South East Asia, we want to take it into the rest of Europe, we want to take it into Africa, we want to bring it into the Middle East, so we just physically can’t do that on our own at the pace with which we want to do it.

So we are looking for strategic partners for the business to help us roll out what we see as this very innovative and exciting product.”

In the Middle East, Sita identifies Dubai and Abu Dhabi in the UAE as key targets.

“We’re very keen to take Yotel to all of the GCC countries and roll it out and we will,” adds Sita.

“It’s only a matter of time. We’ve been very focused on getting the New York property open because we want to showcase a city centre development for our potential partners so they can see it operating, they can see the results. It’s always easier to sell something that somebody can touch and feel,” he says.

However grand an occasion the opening of Yotel New York will be, it looks like May 15 is just the beginning for IFA HI and Yotel.

About IFA Hotel Investments
IFA Hotel Investments (IFA HI) is a subsidiary of international resort and residential developer IFA Hotels & Resorts (IFA HR), responsible for the asset management of IFA HR’s hotels and for overseeing its 85% investment in the Yotel brand.

The asset management is IFA HI’s core business, which revolves around liaising with various operating companies including its strategic partners Fairmont, Mövenpick, Four Seasons and Starwood.

Another joint venture partner is Kingdom Hotel Investments, with which IFA HR is currently invested in the Four Seasons Beirut.

IFA HI is also involved with securing the capital structures for IHA HR properties and effectively acts as the client representative from a development perspective, to help ensure that each of the products is fit for purpose.

The Yotel business operates differently as IFA HR has a private equity investment in the brand.

Yotel has a full management team headed up by CEO Gerard Greene based in London but IFA HI, on behalf of IFA HR, is intimately involved in the operations, with Joe Sita sitting on the Yotel board.

The company also owns the Yotel New York building. “We have a pretty big vested interest in the success of the business,” comments Sita.

IFA HR is listed on the Kuwait Stock Exchange, with a market capitalisation of US $1 billion and also on the Johannesburg Stock Exchange.

The main shareholder in the company is the Kuwait-based International Financial Advisors.

Future Developments for IFA HI
Aside from the Yotel arm of the business, IFA HI remains focused on its core business of asset management in emerging markets.

Sita says he is still focused on the Middle East and South Africa and also very active in Thailand, while central and southern America and Latin America are seen as a great market for the IFA product.

“Eventually we would like to see ourselves take our business model to that market and so forth, so those typically are the markets where we’re comfortable, where we’ve operated, where we have an infrastructure in place, and where we will continue to look for opportunities,” says Sita.

In 2011, the company will open Mövenpick Jumeirah Lakes Towers and in 2012, it will launch the Fairmont Hotel and Residences on The Palm Jumeirah. A second hotel on the Palm at IFA HR’s Kingdom of Sheba development has been put on hold.