BY BRYNN SHAFFER
JULY 24, 2023
Palisociety, a collection of boutique hotels, is experiencing tremendous growth, despite the hotel industry still being in post-pandemic recovery mode.
As part of that expansion, the Venice-based company recently opened a hotel in Hollywood, bringing the total number of properties in L.A. to seven.
“Being able to have multiple outlets really allows us to be a better hotel company,” said Avi Brosh, the founder and creative force behind the Palisociety brand.
Palihotel Hollywood, which opened its doors in June, is a cosmetic remodel of an original 1950s inn. Located directly off Sunset Boulevard, it’s situated courtyard-style with a large rectangular pool in the middle, allowing visitors to feel as if they’ve escaped to a vintage hideaway.
“The bones were great,” Brosh said.
While maintaining the built-in charm of the original architecture, Palisociety reimagined the property by painting the exterior green and revamping the overall asset with one-of-a-kind custom details.
“The design is very intentional to pay homage to an old Hollywood vibe,” Brosh said. “But at the same time, it’s really meant to feel new, contemporary and upscale.”
Palihotel Hollywood is made up of 74 guestrooms and suites – starting at $225 per night – and features a guest-exclusive café and bar, and a Texas-inspired taqueria.
“This property is exceeding our expectations in terms of how quickly it’s gotten its appeal,” Brosh said. “We’re really happy about the way it’s performing so far.”
The opening of Palihotel Hollywood comes just months after the reopening of Palihouse West Hollywood in December – which features 95 guest rooms, an indoor/outdoor pool lounge, two distinct dining outposts, a bar and a lobby lounge.
Additionally, last year, Palisociety acquired Arrive Hotels and Restaurants, which is now Arrive by Palisociety and has locations in Austin, TX; Wilmington, NC; Palm Springs; and Memphis, TN.
And, just a few weeks ago, Palisociety launched a new brand, a high-end bed-and-breakfast dubbed “Le Petit Pali,” which debuted on July 1 in Carmel-by-the-Sea with two distinct properties.
“I think what’s good about Pali hotels is that they’re really focused on unique product and boutique hotels,” said Alan Reay, president of Atlas Hospitality Group, which specializes in the sale of California hotels.
When asked about the motivations behind the expansion, Brosh noted that rather than having one hotel with 500 rooms, he prefers having 500 rooms dispersed via several hotels around Los Angeles.
“We run the hotels like a collection,” he said. Within L.A., Palisociety now has properties in Culver City, Santa Monica, Westwood, West Hollywood, Hollywood and Silver Lake.
“When I first moved here, Los Angeles was less about individual neighborhoods,” Brosh said. “There was the west side and there was the east side … but, over the last 30 years, Los Angeles has become very microneighborhood … they all have very specific personalities.”
By having bases in each of these distinct neighborhoods, Palisociety intends to tap into the culture of microcommunity, allowing guests to feel immersed.
And while California is where most of the brand’s locations are, Palisociety has already branched into a few other states. New openings scheduled for the rest of this year include Palihouse Hyde Park Village in Tampa and Arrive New Orleans. Next, Le Petit Pali plans to expand to Laguna Beach and Brentwood.
Brosh hinted that international expansion may be in the company’s future, with destinations in Mexico and Canada making the most logical sense, but for now, Palisociety is focused on growing its footprint domestically.
While Palisociety has seen a lot of expansion, some might consider its success somewhat unusual, as it’s no secret the hotel industry has been in recovery mode since the onset of Covid-19.
“The (hotel) market, post-Covid, has really been bifurcated into two separate segments,” Reay said.
When Covid-19 first hit, the industry suffered major revenue loss, as travel hit an all-time low. Then, when vaccines were introduced and travel restrictions lifted, domestic travel picked up dramatically. In fact, travel levels within the U.S. were so high during this time the world coined the term “revenge travel.”
This spike in domestic travel was phenomenal for hotels within the travel and leisure markets; on the other hand, hotels located within cities that rely on the tech market and business conventions suffered greatly, as the surge of remote work also meant the decline of corporate travel.
“The hotels that rely on that Monday-through-Thursday business traffic are still suffering,” Reay said, adding that San Francisco and San Jose have been hit the hardest, among the California cities.
Now, the influx of domestic travel has dwindled, as international travel has picked back up and cruise lines are becoming popular again.
“People who would’ve gravitated towards resort areas in California are now going overseas,” Reay said.
And for Brosh’s Palisociety, the issues facing the market are, he says, “exacerbated by the writer’s (and actor’s) strike.”
“Production is a big part of the Los Angeles hotel demand,” Brosh said. He added that his hotels are popular destinations for casts and crew, as they are located near multiple production lots, and the fact that productions are on pause is impacting the brand’s business.
“But I think once we get on the other side of that, there’s nothing but blue sky for Los Angeles,” Brosh said.