NYLO CEO Focused on Choosing the Right Projects

When Michael Mueller left Starwood Hotels & Resorts to found Dallas-based NYLO Hotels in 2004, the boutique segment was in its early stages of expansion. Mueller was in charge of global development, acquisition, and construction for W Hotels from 2002 to 2004. At the time, W had a $250-plus average rate and a focus on key gateway cities. Mueller saw an opportunity to develop a boutique brand that would extend to secondary and tertiary markets at a lower price point.

Rather than wade through bureaucracy at Starwood and risk a watered-down version of his vision, Mueller decided to take a risk and break away. NYLO has become known for its urban loft décor and highly social bars and restaurants. The lifestyle boutique chain experienced growing pains in the midst of the recession, but the company is back in growth mode. It operates five locations—three in Texas, one in New York City, and one in Warwick, R.I.—with a sixth under construction in Nyack, N.Y. Mueller is less concerned with the number of properties in the pipeline than finding the right opportunities for the brand.

How did you get your start in the hospitality industry? My real start was after university, working with Starwood Capital Group in the early ’90s. I was drawn to hotels because they combined real estate with operations. You had to refill rooms every night, unlike other property types. But with hotels, you can also raise the rent every night. And if you manage it well, you can create a lot of value. Obviously, there is a lot more risk, too. You’re depending on a lot of people working for you, and the travel business is cyclical. People don’t book business that far out, and they’re booking one night, not 10-year leases. It can go up and down a lot quicker. It’s really a matter of personality. I don’t mind working harder for more reward. I think for people with roll-up-their-sleeves, work-hard attitudes, hospitality is an interesting industry.


What excites you about the acquisitions and development side of the business? I like creating things. When you work on a hotel project from the conceptual stage to the opening and operations, seeing the vision be realized from the drawings to a reality is very rewarding. For the past few years, I’ve spent most of the time on operations. I find that aspect equally exciting, the post-opening part of it and the day to day. There is a lot of opportunity to do things better on the operating side with tech moving forward at such a fast pace.

You recently broke ground on NYLO Nyack. How fast will you grow from there? When we started out, we had goals for numbers of hotels and units, but the recession slapped us in the face pretty hard. With NYLO, I don’t worry about that. We’re a viable, strong company at five hotels, with a sixth under construction. We’re performing well, and we’re financially sound and stable. We don’t have to grow, but we want to grow and add hotels. I don’t worry too much about how many hotels we’ll have in five or 10 years. I just think about what are our opportunities and which have the best potential to be successful NYLO hotels, and we pursue those.

How have guest expectations changed in the last few years? People more and more want unique experiences. It’s not enough just to have a nice mattress, a clean room, a safe environment, and a breakfast buffet. You have to do all that within a setting that is interesting and that guests can feel good about being in. Something that reflects their personality and makes them feel like they’re staying somewhere that gives them a little emotional or psychological intangible boost that they don’t get when they’re staying in a cookie-cutter, stale environment.