BRINDISI, Italy—A family business, San Domenico Hotels began life in 1996 when the Melpignano family under the guidance of matriarch Marisa Melpignano turned an old, family-owned farmhouse into a luxury hotel.
The Italian company now has five properties—four in the region of Apulia and one in London—but seeks to expand further into non-Italian markets, while at the same time helping to cement the continuing status of Apulia (also known as Puglia) as one of the country’s hottest hotel and leisure destinations.
Behind its new impetus is Aldo Melpignano, the company’s managing director, who worked with Morgans Hotel Group Company in New York before returning home to oversee the development of San Domenico hotels in Apulia and London.
“With the goal of shaping luxury tourism in Apulia, we have already doubled in size, but the plan now is to have San Domenico grow to 10 properties over the next six to eight years, concentrating on London and southern Italy,” Aldo Melpignano said, adding another plan is to launch a “wine bar concept” in London and the United States.
San Domenico’s properties include the 47-room Masseria San Domenico Spa-Thalasso & Golf Resort—which was that original farmhouse—and 17-room San Domenico House in London’s Chelsea district.
The latest addition, 184-room Borgo Egnazia, which opened in 2010, is indicative of the company’s growth and new direction. The property includes a spa, cooking school and four restaurants.
Aldo Melpignano said when San Domenico started, his family had no real ambition. When the first property was an instant success, the company grew organically. The original property doubled in size, and the family—his mother is a retired school teacher, his father a lawyer—bought and turned an adjacent plot into a golf course and leisure development.
New horizons
Aldo Melpignano said with the evolution of the company’s holdings, the company needed to become more sophisticated. Hotel professionals were hired to secure the correct human resources, technology and sales platforms.
“I was involved in turning our first property into a hotel during my gap year before university, and I had no idea that it would be this big,” Aldo Melpignano said. He now has a Masters of Business Administration degree and is looking for opportunities.
“We are working on our brand proposition for our collection of hotels, to gain more of an identity, and to that extent we will look at markets that we understand well—Rome, Milan, one or two resort destinations, London and New York (City).
“Outside our comfort zone, we’re looking for a resort in the line of Borgo Egnazia, a similar property but one that has a different seasonality,” Aldo Melpignano said.
Aldo Melpignano saw the importance of diversification due to domestic Italian demand continuing to shrink.
“International demand is strong at our end of our market, but only 35% is domestic, with the rest coming from the rest of Europe, with the United Kingdom our biggest market. The United States comprises 20% of our guests,” he said.
Growth will involve new locations but also possible new partners, he said, adding that as he held a small investment in Brazil with a friend. Latin American and the Caribbean are not being ruled out either.
“Currently our business model is that we own 100% of equity, but to meet our growth needs we are considering bringing in capital partners or working in a partnership.”
Aldo Melpignano believes San Domenico brings a lot to the table, not only as a partner but also as an owner and designer.
“We have 360 degrees of coverage, and there are not many other examples of that in Italy,” he said.
Apulia on the rise
Aldo Melpignano believes San Domenico figured out Apulia’s rise before anyone else did and now has approximately three-quarters of the region’s 5-star stock.
“The region has a lot of potential, but I believe development will happen slowly, as it is challenging at our end of the market. The region will mature, but if you ask me if there will be 10 times the number of upscale and luxury rooms in 10 years’ time, I would say no,” he said
One reason for this, he said, is authorities are showing more concern and responsibility in regard to approving new builds.
In year-to-date July 2014, revenue per available room in the luxury and upscale sectors for Apulia (Lecce and Salento) and regional Southern Italy came in at €163.33 ($211.72), up 13.2% on figures for the same period in 2013, according to data from STR Global, the sister company to Hotel News Now. That growth was settling down from a healthier 35.3% RevPAR increase seen across all of 2013.
The next region of Italy in the Melpignano family’s sights is the western coast of Italy, although not mature destinations such as the Amalfi Coast.
“We were early pioneers in Apulia so we will be early to other Italian areas, too,” Aldo Melpignano said, “focusing on locality and authenticity.”