Ovolo Hotels is preparing for an expansion of its collection of upmarket hotels to the metropolis of Los Angeles, LATTE can exclusively reveal.
With two locations in its birthplace of Hong Kong, and six sites spread around Australia – either in operation or under development – the hotelier is gearing towards an entry into the LA market in the not-too-distant future.
While Ovolo Hotels’ immediate focus is centred around growth in Australia and strengthening its position in the Asia Pacific region, “LA is the more inspirational next market for us to tap into,” says COO and CFO, Dave Baswal.
“We are looking at the US market and are very keen to go towards LA,” he said.
“Before we find ourselves taken care of in all the markets in Australia, we want to start another new market. You have to start somewhere. You don’t want to exhaust all the opportunities in Australia and then start looking at a third place,” Baswal told LATTE this month during a wide-ranging interview.
Baswal said the company has also assessed other markets in the USA including New York, as well as London in the UK, some European cities and Asia Pacific tourist hotspots where Australians are travelling, such as Bali.
“At the moment, LA seems to be the one with a lot of opportunities, so we are actively working in that market to find an entry. It’s a long shot though, and it will take some time,” Baswal admitted.
“Our research is telling us that LA is the right market for us to enter. What we noticed was that Australia has a huge feeder market into the US West Coast. LA attracts a huge number of Australian travellers.”
During our chat at Ovolo Woolloomooloo in Sydney, Baswal said there is a “very open attitude” towards Ovolo Hotels in its adopted country.
“I don’t think of our brand as a Hong Kong brand itself. It is very much loved in Australia. If anything, it has found its attitude in Australia; it’s kind of grown up into this next level in the Australian market, so it’s very much an Australian brand as much as it is a Hong Kong brand.”
“When we are looking at an LA market, how I see it is there is a very welcome attitude towards an Australian product and an Australian brand. It is highly regarded and respected, has a good quality, so there are synergies in those markets.”
Baswal said assets in the LA market, and specifically Downtown, are currently at the price-point which is affordable and “justifiable”.
“The market is thriving; there is demand overall and LA is pretty strong. Downtown LA is re-finding itself and there are many beautiful brands under development and opening up in that city. The council is very determined to create and recreate the magic of Downtown LA and how it used to be.
“There are opportunities in the market, and it seems to be that our other existing client base have an interest in that market, so it makes it easier for us to be in the mix and continuing to work with the same people,” Baswal said.
With no actual manpower in that market as yet, Ovolo has its ear to the ground, receiving feedback from major firms, real estate agents and contacts who buy and sell assets.
“They all know we have an interest. They all know what type of area we are looking at, and we are receiving a lot of interest to bring the brand there,” Baswal said.
Baswal said existing partners are also keen to have Ovolo Hotels manage a Los Angeles-based property, either as a new-build or, more likely, a conversion.
“All the discussions are happening in LA,” the Ovolo executive said.
While very keen on LA, Ovolo hasn’t yet deployed any capital or made any commitment, Baswal confirmed, although it is “aggressively pursuing it”.
“We are flying there pretty much every three–six months to look at assets, and we have visited quite a few that have potential. We have looked at everywhere in LA, but Downtown seems to have more opportunities than other markets.”
Dave Baswal, Ovolo Hotels COO/CFO
For a new-build, Baswal suggested it could take two to three years; however, an existing asset could see the brand debut in 12 months’ time.
“I don’t foresee [that] it will happen in the next six to eight months, but you never know – if things happen right, it’s just a matter of finding the right asset, and then taking it from there.
“LA is something that we will keep an eye on and hopefully find an opportunity when the time is right, but there is no rush.”
More from Dave Baswal in next week’s LATTE.
Lead image: Downtown L.A. | Image credit: L.A.Tourism