125 rooms or less

Stein: Hardware is easier than software

SURPRISINGLY, David Stein is an easy man to get hold of – for someone that runs a chain of determinedly tiny luxury properties across Europe that are quite regularly photographed in the sort of magazines you aspire to, he’s unpretentious, upfront and even kindly.

In the half hour we sit down with him, he seems the sort that reaches out, not the kind that sits back and expects bowing and scraping.
If it’s an mask – like the sceptics could well think it is – he’s certainly very good at keeping it up. Because it didn’t slip once. Not once did we glimpse the sort of base mettle so many hotel executives seem to be made of but perhaps that’s the difference: he isn’t just an executive running a series of cookie-cutter brands across the globe, he’s an entrepreneur that’s moulding a genre to his own exacting standards.
In the early 1990s, after a distinguished career as a resort developer in the US (building more than 4,000 homes and creating such resorts as the billion-dollar Monarch Beach development in Southern California), the American-born middle-class lad moved to Spain, inspired by the idea of – and opportunities in – a borderless Europe. He bought an old castle and began renovating it, repositioning it as a luxury property in a country that was then a low-end tourism trap. “I thought the only way to break through was to show that if you built luxury and quality, people would come. So I converted my home to the Grand Son Net hotel we now have in Majorca,” he has explained before.
In 2001, he created the Stein Group, whose object “was to develop a brand for small, under 125-room, luxury lifestyle brand hotels” and set himself the ambitious target of 25 properties in ten years. Nothing out of the usual here in Dubai (“A project that takes five to eight years to complete in Europe, opens its doors here in one and a half hours,” he says, sitting down with us at a recent industry meet), but certainly quite a target on the continent – a target close to being met, with almost 20 hotels already open or announced. The most recent was the Hotel Rodina at Sochi in Russia, complete with Stalinist associations and bomb shelter.
Predictably, expanding out of Europe is next on his radar. “To be substantial, you need to focus on one geographical area. Twenty hotels worldwide is not much to anybody, but 20 in Europe is considerable – and they’re easier to get to and operate than running around the world,” he says.
Taking the brand on the road is the next step and Stein is looking at regions where it will resonate and complement his European properties, whether Asia, North America or the Middle East. And occupancy rates will not be a problem, he says: “Wherever you go, your clients move with you. The best way to get brand recognition is to build hotels here,” he says. Especially if he can tie in the luxury hotel accommodation with a desert experience, like he wants to.
Stein would hope to be managing 25 properties built from the ground up in about five or seven years after starting out here – but, he says, he needs a strategic partner first. “Not a financial partner, a strategic partner. I was afraid to go to Texas without a Texan, so we’re not going to come in here with the arrogance that we know it all,” he says, admitting that any investor working with the Stein Group would need to be a little patient, given Stein’s focus on the intimate, boutique experience – these are, after all, hotels that truly are reported to feel like home, where you can dine at a proper dining table set up in your room, or have an in-room spa treatment. “An investor can just as easily tie up with a big player and build one hotel with the same number of rooms as 25 hotels with us.” 
Small hotels also mean a smaller – and easier to manage – employee base, and a more personal experi-ence for the guest. It’s a topic Stein comes back to often; he says a key attribute of his hotels is “our people”.
“It’s easier to build the hardware than to perfect the software,” he says. “In many cases working in a hotel isn’t a job at all, but turns out to be a punishment.” And it’s easier to keep people enthusiastic on a scale of 100 people than 2000 people, he says, preferring not to talk of teamwork. “What sport has 2500 people,” he asks (25 hotels times 100 employees).
The key, he has said before, is selecting the right people more than training. “We can train forever, but if people really want to do the job, they'll bond with guests and give great service. We move existing staff to new hotels and they bring their service ethic with them. We are one of the few small hotel companies with upward mobility.”
Some of that begins from the basics: the group runs a hotel school in a joint venture in Amsterdam. “So we have 184 students that we can observe for a year and then take the cream of the crop,” he says. “I would rather stay in a four-star property with five-star service than the other way around any day.”

by Keith J Fernandez