Why the Trend-Seeking Luxury Consumer Loves the Branded Residence Sector

 This article first appeared in Hospitality Insights in mid-October.

Aston Martin. Baccarat. Porsche. Versace. Aside from being ultra-luxury brands, what do these companies have in common? All have lent their names to branded residences.

Branded residences emerged as a real estate market segment about 20 years ago, when hotel brands started creating mixed-use developments. Adding a residential element to hospitality projects made it easier for developers to get financing and more immediate return on investment while simultaneously benefiting from a long-term revenue stream on the hotel side. 

For hotel companies, branded residences were a natural brand extension for luxury groups like Four Seasons and Ritz-Carlton, trading on a tradition of hospitality, service and high-end amenities. After all, who wouldn’t enjoy living in a place that shared concierges, housekeepers, celebrity chefs and spas with the most discerning hotel guest? Riyan Itani, head of Savills International Development Consultancy, put it simply: “The concept of branded residences, from its inception, has been based on the provision of services and facilities that one would typically find in a hotel.”

The synergies between high-end hotel brands and branded residential developments, then, are somewhat obvious. But what value does an automotive brand, or a jewelry brand, or a fashion brand bring to the dining room table?

The Porsche Design Tower in Miami

According to Savills, during the last ten years, the number of branded residences increased by 170 percent, adding more than 52,000 units across 370 projects. In the beginning, branded residences were almost exclusively the domain of luxury hospitality brands, but that is changing. as more and more non-hospitality luxury brands enter the fray. Part of the reason for the shift is that some markets have reached capacity in terms of luxury hospitality branded offerings, while in places more driven by trends, developers are looking for sexy points of product differentiation.

Palazzo Versace, Australia

While a few such non-hospitality brands were prescient early on (Palazzo Versace on Australia’s Gold Coast was actually quite revolutionary when it opened in 2000), most of the newer players have come on the scene during the last five years. The Porsche Design Tower opened in Miami in 2017.  Aston Martin will add more automotive cachet to the Miami residential scene in 2022, and Bentley will enter the mix there by 2026. Lamborghini is shifting into high gear in Dubai with an immense project (8,000 residential units) to be opened by 2024. Italian car design firm Pininfarina is growing its presence through branded residences in Brazil and Guatemala. High-end consumer goods brands like Baccarat, Roberto Cavalli and Armani are also players, although most of these branded developments are one-offs, mostly located in hot branded residential real estate markets like Dubai and Miami.

Cyrela by Pininfarina, Sao Paolo, Brazil 

The Appeal For Companies, Developers and the Consumer

There are three stakeholders in every branded residential scheme. There’s the brand, the developer and the consumer. In theory, the branded residences sector offers an opportunity for high-end products to expand their brand profile and diversify their business model, while giving developers a unique selling proposition and providing consumers with bragging rights. For non-hospitality brands to succeed, says Chris Graham, author of The Branded Residence Report, an understanding of local markets and developers, careful buyer targeting and brand alignment are all essential.  

Having branded residences allows the Bulgaris, Versaces, Armanis and Baccarats of this word to attach an experience to their products, according to luxury branding expert Piers Schmidt, while at the same time, says Graham, offering a big WOW factor that will result in extensive PR. 

“Brands can create a theater of dreams; a temple to the brand at which the consumer can come and worship,” said Schmidt. Theoretically, this can lead to a deeper relationship with the brand’s consumer. But that prospect comes at great risk to these brands, according to Barry Landsberg, a long-time veteran of the branded residence world. “The service culture is inherent in the DNA of hospitality brands. Non-hospitality brands do not bring the advantage, so that to be successful competitors in the high-end residential space, they will need to invest in the hospitality ingredients that have been a mainstay of the industry, or potentially risk tarnishing their brand equity. If they don’t get the service component right, that’s the biggest risk if they don’t deliver.”

For the developer, a non-hospitality luxury brand may offer more flexibility in terms of design and required levels of service. That’s because non-hospitality brand deals may not come laden with extensive royalty fees, license fees and service charges, along with strict requirements to ensure the development meets brand service standards, according to Landsberg. Furthermore, developers are always looking for an edge, and adding a seductive brand label to a building, particularly in saturated, status-savvy markets, can increase the allure and the price of the product. That said, Savills notes that while luxury hospitality brands add an average of a 31 percent price premium to branded residences, non-hospitality luxury brands bring in a price premium average of 25 percent.

So, it appears that some consumers are still willing to pay a premium for their non-hospitality branded residences. But the experts say there are caveats, especially given that there is not an automatic assurance of consistent quality service that is baked into hospitality brands.

For a non-hospitality branded residence to sell, a consumer must really buy into the brand at hand. But is that enough? After all, while there are natural synergies between luxury hotels and luxury real estate, one may wonder what value crystal or car brand brings to a potential homeowner. How do you translate the brand essence of a dress or a piece of jewelry or an automobile into where you live? After all, “new car smell” doesn’t really translate in a home environment. But automotive brands, for example, in trying to bring the brand aesthetic home, are doing everything from adding automotive elevator systems which enables residents to store their vehicles in their very own “sky garage” (a multi-car glass display case situated right next to their living room), to sweetening the purchase of a multi-million dollar condo with a “throw-in” of a car, to adding design elements borrowed from the car itself. There may be more relevant synergies in terms of design with fashion houses, particularly those that have homeware or interior design in their portfolios, but in all cases, the service factor is still an unknown. 

A "sky garage" in the Porsche Design Tower
cnn.com

What the Future of Non-Hospitality Luxury Residences May Look Like

What kind of competition will these schemes offer vis-a-vis hospitality projects?

For a while, it looked like non-hospitality branded residences were merely the new shiny object. But, according to Landsberg, certain projects have proven that "if a brand has the ability to draw from a dedicated affinity group; if it works with a developer who understands the local market and the branded residence space; and it brings on designers to incorporate elements of product integration," he said, "in other words, there is a managed process through architecture, design and service, it can be a success, especially in places like Miami and Dubai, which are dynamic, design-forward markets, and developers there understand their markets well and are looking for ways to differentiate in those crowded markets." 

In fact, the success of the schemes may be more dependent on market than on brand, according to Graham. In his Branded Residence Report, he writes, “The non-hotelier segment is typically more focused in emerging markets than the branded residence sector as a whole. Demand for high-end properties has risen quickly in emerging markets in parallel to wealth creation. The nouveau riche buyer may be more attracted to unique products and these lifestyle orientated brands resonate well amongst brand-friendly and knowledgeable purchasers.” Such  buyers, he added, are quite prevalent in places like Dubai, Miami and Brazil, where “bling and design appeals.” 

Because of their success in those places, Graham says “the viability question of non-hospitality brands has been put to bed. Look at brands like Versace and Armani, which all decided to license their names and design as a brand extension and way to get additional revenues. They took a leap of faith that the product would extend into residential and people would pay a premium and it came to be. Subsequently, the sector has taken on a life of its own.” 

Piers Schmidt, however, is not quite as bullish on the sector. “I am pretty negative about it, given that many schemes have not worked and those that have haven’t grown beyond one or two brand residence properties," he said.

Unlike hotel brands, which seem to be able to plant their flags anywhere, non-hospitality brands will be limited, to those specific markets that may be more prone to be susceptible to the label factor of a brand. In that respect, non-hospitality luxury branded residences may end up being more of a one-off novelty than a replicable international model.

Good Vibrations: Sound Healing Makes Waves in the Wellness Industry

   If you have been noticing more spas offering treatments that incorporate Tibetan singing bowls, tuning forks, or gongs, you aren’t alone. Sound therapies are starting to make waves in the spa industry.

In the ultra-competitive world of luxury wellness travel, companies need to do more than just offer gorgeous views, great-tasting food, and aromatic gardens. They need to think about sound too.

Increasingly, properties including Hyatt’s Miraval Arizona are employing sound therapy to pull in wellness-oriented customers. The idea is that people’s ears offer a path to relaxation and healing every bit as powerful as eyeballs, nostrils, and fingertips. And companies are citing ancient wisdom known to groups as disparate as Australia’s aborigines (think didgeridoos), Tibetan monks (think singing bowls), and Native Americans (flutes, drums, and rains sticks) as part of healing practices.

“Sound can signal the body to release its own tension and negativity, dropping the brainwave into a meditative state quickly and effectively,” said Pamela Lancaster, a widely regarded guru in the field and “master healer” at Miraval Arizona.

What Miraval Arizona and others are realizing is that sound is a powerful tool in reducing clients’ stress levels, improving their moods, and alleviating pain. And given the hectic, anxiety-ridden world of 2020, more and more travelers are seeking out such restorative treatments.

WHAT’S IN A SOUND?

Proponents of sound therapy call it “vibrational medicine,” arguing that certain systems in our bodies vibrate at different frequencies. If these frequencies get disrupted by ailments like emotional distress or illness, our well-being could be affected.

While efforts to heal through sound therapy is as old as ancient Egypt, scientists have only recently begun to explore its efficacy. The wellness community, however, has been providing sound therapies for more than a decade, with some treatments growing more and more into standard offers.

The offerings include massages that are synchronized to music, listening to the peaceful sounds of “deep nature” and taking in the beauty of Tibetan singing bowl sessions. Tuning forks of varying pitches are thought by some to be a way to “unblock” people’s “stagnant energy,” And so-called “sound baths” — an ancient form of deep meditation — create relaxing, repetitive sounds using musical bowls, cymbals, and gongs.

“An immersion in sound frequency cleanses the soul,” said Robert Lee, a leader at  Eaton DC, a hotel and wellness center in Washington, D.C. “It allows for a recalibration to a deep stillness that we can all access within ourselves.”

In fact, sound can be used to create a sense of stillness that people crave, he added. “While trying to quiet the mind in a quiet room is nearly impossible, sound actually makes meditating easier.”

WHERE SOUND AND TRAVEL OVERLAP

At Miraval Arizona, Lancaster has seen firsthand how much sound can help visitors leave behind their stresses and negativity and settle into a meditative state. The resort offers Vasudhara, a water treatment combining Thai massages with pulsating sounds emanating from underwater speakers. “The body brings itself back into a place of homeostasis,” Lancaster said, about the treatment. “And things have a propensity to begin to heal.”

Vasudhara at Miraval Arizona

Michelle Pirret, a “sonic alchemist” at the Four Seasons New York Downtown, suggested this type of therapy is powerful because the human body is comprised mostly of water. “When frequency is played on the body, cellular water is vibrating,” she said. “This escalates hormonal release and relaxation.”

The Lodge at Woodloch in northeastern Pennsylvania offers a vibrational treatment that uses the sound waves of singing bowls to create a relaxed, meditative state. Its “Gong with the Wind” selection combines yoga and meditation with holistic sound immersion. The acoustics come courtesy of conch shells, bronze gongs, and singing bowls.

Sound Healing Instruments
at The Lodge at Woodloch

Primordial sound meditation is also on the menu at the Chopra Center for Well-Being in California. Guests receive personal mantras, specific sounds or vibrations that help them achieve quieter, more peaceful states of mind.

In Wisconsin, Kohler Waters Spa at The American Club has wet treatment rooms featuring VibraAcoustic bath technology. There, a big bathtub is tricked out with transducers that send vibrations through the water and aimed at opening up lymphatic pathways, said Nikki Miller, director of Kohler Waters Spas.

For companies looking to add sound therapy to their offerings, here is one piece of counterintuitive advice. Rather than just focusing on the noise, resort operators also need to focus on designing spaces for, well, blissful silence. “Creating a soundproof space significantly enhances the effectiveness of the experience,” Lee, of Eaton in Washington, D.C., explained.

“Silence,” he added, “must be given the honor it deserves.”

Going With the Floe: How a Canadian Province Uses Icebergs to Attract Visitors

Prize-winning marketing campaigns can put distant destinations on the map.  In the case of Newfoundland and Labrador, the easternmost province in Canada, “Find Yourself,” an umbrella marketing theme in existence since 2006, has been a launchpad for creative promotions that have won more than 300 domestic and international awards during the past 12 years.

“Find Yourself is about creating an emotional connection. It’s designed to tap into the heart and ultimately the wallets of the people we are going after,” said Dave Sullivan, part of the creative team behind Find Yourself.

Just this year, the province received six awards at the Hospitality Sales and Marketing Association International’s Adrian Awards. Top prizes went to iceberg tracking website IcebergFinder.com,  the Symphony of Sound integrated campaign, and a television spot entitled Conductor.

“Tourism as a travel and trade industry is so globally competitive. Award-winning campaigns making waves around the world [can lead] to success…and a competitive edge,” said Catherine Kelly, director of account management at Target Marketing and Communications, which helped create the campaign.

Fogo Island Inn
nscad.ca

Isolation be the newest thing in luxury travel. Still, gaining a competitive edge is not easy for a destination called one of the four corners of the earth by the Flat Earth Society, noted Christopher Mitchelmore, Newfoundland and Labrador’s minister of tourism, culture, industry and innovation.

"We face an exceptional challenge because of our location…the most easterly point in North America in the middle of the ocean,” he said. “It takes a determined effort to come here, in terms of distance, time and cost.”

That said, when visitors arrive, they find a destination “as far away from Disneyland as possible. It’s not a contrived destination. We have whales, icebergs, four UNESCO heritage sites, and unique cultures.”

NewfoundlandandLabrador.com

Highlighting the province’s attributes in original ways is key to the success of the award-winning campaigns, and by extension, to tourism growth.

“Our biggest opportunity group is curious people looking for the unexpected and intriguing. We looked at the marketing landscape and found a lot of the work is so similar and linear, covering places to go and things to do. That created a big opportunity for us to differentiate ourselves,” said Sullivan.

“We look at the province’s inherent creativity from a tourism perspective–its people, its culture, its natural landscape.”

Ah, that landscape. Wild, ancient, craggy coastlines filled with icebergs, which are a top travel motivator.

“Every spring, there’s a parade of 10,000-year-old icebergs waltzing along our 18,000 miles of coastline. But visitors need to know where to look for them. Our solution was launching Iceberg Finder. It was a responsive and interactive way to connect people by plotting icebergs on a live interactive map. Visitors could also upload photos. Iceberg Finder became a unique way to help people hear about the experience,” said Sullivan.

NewfoundlandandLabrador.com

In fact, the site was chiefly designed “to facilitate the visitor experience while icebergs are here,” said Kelly. “The publicity was secondary.”

One of the other elements making the province’s experiences sing is sound.

“Experience here is felt through sounds. For example, there are the creaks and groans and fissures of the icebergs, which tell the story of their journey through the North Atlantic,” said Sullivan.

He adds that natural instruments, like the wind and waves crashing against the shore, along with man-made sounds–from music to the voice of storytellers, “demonstrate how we hear things very differently here.”

Thus, Symphony of Sound, an integrated campaign focusing on sound – both man-made and natural. Among the elements is Sounds from the Edge, a website allowing visitors to scroll through radio frequencies of both natural sounds and the region’s 200 dialects. The site includes a Play It by Ear contest. Visitors to the website were asked to build their own soundtrack, based on indigenous sounds. One composer won an all-expenses-paid trip to the province. The integrated campaign also incorporated a literal symphony inspired by natural sound. The symphony serves as the soundtrack of a seven-minute video.

This year, the focus is on storytelling. “The digital prong will be a website campaign page, a space where people can come and travel through the stories that exist here. There’s also a 90-second TV spot in the form of a long-form poem highlighting the oral traditions that exist here. It all goes back to the emotional connection with place and people, and where they can reconnect with themselves,” said Sullivan.

Will the new campaign win more awards? According to Kelly, that’s not really the point. “Awards won is not the measure. Success comes from visitors and spend and awareness and potential for future visits. Specifically, our job as the destination agency is to get it on the radar and create interest and drive visits to the trip-planning tool. We measure interest and intent to visit. The industry then has to convert interest to action.”

Apparently, it’s working. “Tourism spending is at an all-time high. Moreover, there are now 2,800 tourism-related businesses employing 20,000 people (making tourism the largest non-government employer in the province). Every region is seeing a benefit,” said Mitchelmore.

This article originally appeared on Skift,a publication for which I am the luxury correspondent.

Ooh, La, La: A Tasty Luxury Hotel Arrives in Paris

Courtesy: Fauchon

Fauchon has long been in fashion among epicureans. The Paris-based gourmet food purveyor has been around since 1886, and has outlets in 20 countries around the world. And now, it has a hotel.

Last fall, the company opened Fauchon L’hôtel Paris by  Place de la Madeleine. There are plans for 19 more openings around the world in the next decade. Next up is Kyoto in 2020.

We know…ho-hum, another new luxury brand. Except that, after speaking with Jacques-Olivier Chauvin, president and CEO of Fauchon Hospitality, it does appear that this one is actually fashioning itself in ways that might differentiate it from the competition. The idea is to win guest hearts through their stomachs.

Fauchon L’hôtel Paris has a certain je ne sais quoi 

“Fauchon has deep roots in French culture and French gastronomy,” said Anders Justenlund, a hospitality consultant and lecturer at University College Northern Denmark. “When you are talking about branding today, you are talking about engaging with the product, which in the case of Fauchon is food and beverage products. Fauchon Hospitality offers them a new way to market their main business.”

Indeed, in creating the new hotel, Chauvin said the idea was to enhance customer engagement by “finding the essence of what Fauchon is about and capitalizing on that. We asked ourselves what can we bring to this industry? Since everything we do is about glamour and gourmet experiences,” the answer was to create a hotel brand with an emphasis on French food and beverage, “from street level to the top floor.”

www.ihw.com

At street level, guests find Grand Cafe Fauchon, naturally a gourmand affair. But the in-room food and beverage offerings are what distinguishes Fauchon from its competitors.

“To us,” said Chauvin “room service is the future of a different hotel experience.”

Reinventing in-room dining starts with the choice of furniture. Instead of wall-facing desks, rooms come with a table and chairs oriented toward windows. In other words, Fauchon guests will be using their dining tables for work, instead of using work spaces for dining.

Rooms come stocked with a tablecloth and Limoges tableware. So, transforming into an in-room restaurant is as simple as unfurling the linens, setting the table, ordering from the complete restaurant menu via tablet voice technology, and then awaiting the meal, brought to the room in individual courses.

Each room also sports a customized gourmet bar, designed by Sacha Lakic for Roche Bobois. It’s packed with Fauchon treats, from truffles and foie gras to macarons and champagne. And what guests don’t eat, they can take home with them, gratis, a smart move, said Justenlund, for extending the brand experience beyond the hotel stay.

These in-room food offerings might be considered part of Fauchon’s X factor, as in the desire to appeal to Generation X (aka The Forgotten Generation among travel marketers). Chauvin says Xers are Fauchon’s sweet spot, with their interest in “elegant comfort, food and their interest in learning about other cultures.”

Unlike many so-called millennial brands, where room space is sacrificed in the name of creating cool lobby hang-outs, Fauchon wants guests to luxuriate in their rooms.

“A room is where you want to enjoy the city where you are,” said Chauvin. “We are providing more than a place to sleep. We want the room to be spacious. To provide a view to the city. To allow guests to have a proper dinner experience.”

Fauchon is smart to distinguish itself through food, said Justenlund: “What is making the difference is that this is not a hotel company; it’s an F & B company opening a hotel to lift the entire brand.”

Naturally, Chauvin, a veteran of both Louis Vuitton and Relais & Chateaux, agrees.“We are capitalizing the Fauchon name, providing a thorough brand experience, and putting an umbrella over the brand…from food to cafes to hotels,” he said.

This article originally appeared on Skift.com, for which I am the luxury correspondent.