Hard Rock: It’s More Than Restaurants
Hard Rock is a 40-year-old consumer brand with a global reach. So far, however, that reach hasn’t extended very far into the lodging market. That’s the situation Michael Shindler faced when he signed on earlier this year to head up Hard Rock Hotels & Casinos, the lodging subsidiary of the much-larger Hard Rock organization best known for its 130-plus music-themed restaurants.
For Shindler, a veteran hotel real estate dealmaker through stints with Hyatt, Las Vegas Sands, RockResorts and others, the challenge in the new job is to grow the hotel chain from 12 properties worldwide to 40 to 45 in the next 10 years. He also overseas day-to-day operations of the brand and properties.
“We have an enormously well-recognized brand and not just in the U.S., but internationally,” says Shindler. “But with just a handful of hotels and casino hotels, we’re not widely known in the hotel space. My job is to use the brand as a foundation to build a significant presence in the hotel marketplace.”
The chain’s current portfolio spans the globe from Bali to Biloxi. Five of the 12 are casino hotels (four of which are in the U.S.). Overseas hotels include a casino property in Macau and hotels in Bali, Indonesia; Pattya, Thailand; Penang, Malaysia; and Singapore. Later this year, a 1,200-room all-inclusive Hard Rock Hotel will open in Punta Cana, Dominican Republic. Parent company, Hard Rock International, also operates 130 restaurants around the world. The Seminole Tribe of Florida bought Hard Rock in late 2006 for nearly $1 billion and operates two of the chain’s flagship casino hotels in Tampa and Hollywood, FL.
Other Hard Rock Hotels will open in 2012 in Panama and Hungary and in 2013 in Dubai and Abu Dhabi. The company plans to pursue hotel growth in a number of markets and through a variety of strategies, including management, licensing, leasing and partnerships with equity providers.
“To be a truly recognizable international brand, we must have hotel presence in the gateway cities of the world,” says Shindler. “We’re in Chicago, but we also want New York, Washington, Miami and San Francisco and overseas London, Hong Kong, Tokyo, Beijing or Shanghai or both, and Sydney.”
To kick-start the growth plan, Shindler recently hired gaming veteran Nelson Parker to head development for the Americas. Parker had a similar role at Foxwoods Development Co. and before that, Argosy Gaming. Among Hard Rock’s potential initiatives, says Shindler, could be an investment vehicle to pursue development opportunities. To do so, the company may partner with a private equity group or REIT.
While growth is a priority, Hard Rock will be careful to develop properties in the right locations with design and facilities to cater to its target market. “It’s a product not really geared toward the 20- to 25-year-old segment,” he says. “It’s an older demographic, later boomers who grew up with rock and roll and for whom music was and is an important part of their lives.”
And even though they’re not international gateway cities, Shindler would consider projects in markets with strong ties to music culture and history: New Orleans, Nashville, Austin and Cleveland, as examples.
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