In late February 2023, 275 owners, operators and advisers from the region gathered at the Anantara Eastern Mangroves, Abu Dhabi for the 6th edition of the Gulf & Indian Ocean Hotel Investor’s Summit (GIOHIS), part of the HOFTEL Hotel Investor’s Summit Series.
The Summit deliberately set out to tackle some of today’s big issues – the ambitions of the Kingdom of Saudi Arabia; the arrival of gaming in RAK; the rush of owners to franchises and away from management agreements; the opportunities and challenges of ESG standards; the rise in construction supply costs and interest rates; whether glamping is now a real alternative to “hard built” hotels; whether high fashion brands add value to luxury hotels and indeed whether the luxury sector has now peaked.
With thanks to Tea, some of the key takeaways from a well received session included:
- The concept is attractive but execution, especially in operations, is a challenge not many have risen to
- Several fashion brands have launched into hospitality (e.g. Versace, Armani, Fendi, Missoni…) but most of these have failed
- That said, there have been some success stories, notably Bvlgari, Nobu and more recently Baccarat
- Key success factors include the establishing the right partnership, location, financial structure, and commitment
- Scaling has proven the greatest difficulty for almost all of these brand extensions with the notable exception of Nobu. Perhaps the adjacency of a restaurant brand (F&B) with hospitality is part of what has enable the success of Nobu Hotels
- Branded residences is where the consumer brands can shine. In certain cases, the price premium achieved by non hotel branded residences has reached 50%. Expect more brands to enter this space as the appetite for branded residences continues to gather pace e.g. the St. Regis, Dubai sold out 70% of its 232 units within an hour of its launch
Luxury Branding has led brand extension exercises translating retail and consumer brands into hospitality for Armani, Paramount Studios, Cirque du Soleil and Calm.