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Why high-end retailers are opening branded hotels

The Property Addict / Luxury Lifestyle

Jul 21 2017

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Brands wading into hospitality isn't a new phenomenon. However, over the past year, there has been an influx of retailers opening hotels in order to transform into full-fledged lifestyle brands. Fashion companies including Bulgari, Armani and Camper have all launched hotels in previous years, and now companies in the home goods space are following suit. West Elm, the interior design retailer owned by Williams-Sonoma, Inc., will open a series of hotels beginning in 2018, with locations primarily in the Midwest and southern U.S. Likewise, Restoration Hardware is slated to open a hotel in New York City's Meatpacking District within the next few years. In addition to West Elm and Restoration Hardware, Equinox is expected to open its first hotel in Manhattan in 2019 (with a hotel in Los Angeles to follow), indicating the hospitality trend is expanding into the wellness realm, as well. Benoà ®t-Etienne Domenget "â? CEO of Sommet Education, a top hospitality school system that includes Les Roches Global Hospitality Education in Switzerland "â? said the growing trend of traditional brands turning to hospitality was predicated by the rise of experiential retail. Beyond simply selling products, retailers across industries are identifying new ways to immerse consumers, and this mindset has informed their forays into hospitality. "If you think about it, what better showroom is there than an entire building where people sleep and dine? Consumers today want to experience a brand more realistically than in a shop display," he said. Benoà ®t-Etienne Domenget said these initiatives also allow consumers to see and use a brand's products in their hotel rooms, ultimately making them more likely to purchase them. "At a Missoni Hotel, I can use furniture and linen that I can actually buy. This is the ultimate immersion into brands." For West Elm, the move into hotels came after 26 quarters of consecutive growth that spurred the executive team to seek out expansion opportunities, said Pete Fowler, vp of hospitality and workspace at West Elm. Hospitality felt like a natural extension and a way for the company to continue to capitalize on its popular modern aesthetic. "We saw a meaningful gap in the hotel market," Fowler said. "[We plan to] offer a differentiated experience from the major hotel chains and the geographically limited specialty players [through] a collection of boutique hotels that is wholly focused on the unique character of each location and its surrounding community." Rather than seek out exotic locations like Bulgari's resort in Bali or Camper's in Mallorca, West Elm is catering to its client base by opening up locales that are less traditional vacation hotspots: It's first round of hotels will be in cities including Indianapolis, Minneapolis, Savannah, Charlotte, Oakland and Detroit, and it has plans to expand. "We wanted to do projects in interesting locations and in cities that were turning a corner," he said. "We do want some of the major gateway cities, of course, but we're competing in a much, much bigger group there. Being the new kids on the block, it was the more interesting, original locations that came up first." Restoration Hardware declined to speak about its hotel plans, claiming it hasn't publicly shared details around them. This is likely a result of the project being temporarily stalled; a Curbed report found that Restoration Hardware was required to redesign its original blueprint when the New York City Department of Buildings claimed its original version was too expansive. Regardless, CEO Gary Friedman has spoken about hospitality in the past, including in a 2015 interview with Elle Decor, where he alluded to the forthcoming New York hotel, as well as additional plans like a "little village" of antiques and furniture in Napa Valley, and longterm goals to move into real estate and sell furnished homes. "We're trying to inspire, and by so doing, create a new market," he told Elle. Equinox, on the other hand, is making expedient progress, with its first hotel set to open in 2019. Though the facilities will be open to the public, members of the fitness club will get first dibs at access to rooms. The inspiration for the hotels came from a survey of members that found that 95 percent of respondees would be interested in staying in an Equinox hotel. "The demand for fitness and high-performance living has never been greater, and we don't see it slowing down," Equinox CEO Carlos Becil told Condà © Nast Traveler. "A majority feel it's important to maintain a healthy routine and don't want to compromise their commitment to wellness and fitness because they are away from home."   Bethany Biron Originally published in Glossy

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