Building a $100M boutique hotel business

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Today’s interview was conducted by Gabriella Pedro, a creative producer who advises emerging fashion brands in NYC.

Branded boutique hotels have been steadily growing over the past decade as consumers are willing to spend more on experiences. In 2023, Expedia found that there was a 1,100% increase in the word ‘vibe’ in customer hotel reviews compared to 2022. That’s a pretty significant sign that the ambiance and feeling of a place matter a lot to American travelers.

A disruptor aligned with this shift in consumer desires is CEO and co-founder of ASH, Ari Heckman. ASH is a vertically integrated hotel developer that designs, develops, owns, and operates historic properties in up-and-coming cities across the United States. Their portfolio includes The Dean, Peter & Paul, Ulysses, The Siren and Shenandoah Mansions, which is set to open later this year (it’ll be the grandest one, we can’t wait to see it). ASH is creating cinematic getaways and treating their real estate almost as ‘sets’ to transport patrons into hyper-detailed environments. The now $100 million hospitality firm looked very different at the beginning; it started off as a two-man apartment staging operation located in Greenpoint, Brooklyn, on Ash Street.

For this week's interview, we have the privilege of sharing Ari’s journey into entrepreneurship, which is one marked with strategic risk-taking and dreaming big. Lessons that are always good to be reminded of.

'My grandfather had always given me the good advice to not be an architect or designer in the traditional sense, because ultimately the client, whether it’s the homeowner, developer, whatever, is the one that makes the final decisions. So I internalized that advice, and I was like, 'I don't want to be a service provider, I want to be the decision maker'. 

Ari Heckman, A Hotel Life

Interview Highlights

• From running a staging company to developing hotels 

• Lessons from the first hotel

• Investing in the right properties

• Design process & storytelling as a hotelier

• Redeveloping historic buildings

• Raising capital & creative deal structures

• Future of ASH World

You started ASH World originally as a staging company back in 2008, how did you pivot to become a hotelier and open The Dean?

The origin story of ASH goes back to when I was working for a real estate developer in Brooklyn. I sensed the Great Recession was coming because there were fewer deals coming in and less optimism toward the near future. So I knew I should figure out what I was going to do in case my job ended. I always imagined having my own thing; that was the goal. So I had that desire in the background, and then a few serendipitous things happened at the same time that ultimately led to the creation of ASH:

My current business partner Jon and I sat next to each other at work; we were the first and second employees of the developer we were working for. We were talking about next steps in case something happened to our jobs and got to talking about potentially finding some real estate investment projects to partner together on as we had always been interested in that.

I had an ‘aha’ moment when I staged my first apartment. At the same time, Jon and I were having these conversations; I was working with a broker to bring some apartments to market whose development I had overseen. In order to get the best value for units, they needed to be staged so you can market them appropriately, and the broker had told me we needed to do that for this particular project. Instead of getting someone to stage it, I decided to do it myself because I had always been interested in design and saw this as an opportunity to exercise it, because up until that point I hadn’t. My grandfather was an architect, and my mom is an interior designer so I cultivated a curiosity and appreciation for it since it’s been around me my whole life. The broker ended up liking the units I did a lot and asked me to do more for him. At first, I said no, I have a full-time job and I don’t know if I’ll have time! But he convinced me to do it for a client of his. It was a snowball rolling down a hill, where people saw them, liked the work I did, and then asked me to do a project. That happened again and again so before I knew it the small staging business had turned into a real business.

Then 2008 came, and Jon and I decided to work full time on the staging business. A few months into it we started buying multi-family homes in Providence, Rhode Island which is where I’m from. Renovating and selling them. Then in 2012, we came across an opportunistic investment in downtown Providence. It was a strip club being sold at a really good price and it would end up becoming The Dean. I saw an opportunity for it to be an independent hotel because I had grown up there so I knew the market of Providence very well. There were mostly big box hotels and Providence is a creative college community, so we bet that people were ready for an independent hotel that was more lifestyle-oriented. When I talked to some of my real estate mentors at first they actually warned me to stay away because hospitality is an operating business; sometimes I wish I listened to them (haha).

That’s been the thread of my career and ASH, fusing the left and right brain - creating value through coupling real estate and design. 

Let’s go back to that. Some of your real estate mentors warned you to stay away from hospitality and jokingly that you wished you'd listened to them at points. 

What was a challenge you faced entering the hospitality business as someone with a background in residential development? 

Hospitality is a different business, so there was a steep learning curve. When you complete an office building, a condo project, or a residential rental property - you sign leases, sell the units, and you are done. In hospitality, you are operating day in and day out. That’s really great when the markets are strong, and it can be terrible when they’re not. It’s riskier, but there’s more upside.

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