Virgin Hotels is Building a Brand

After Virgin Hotels announced its plans for a New York City location on Monday, CEO Raul Leal sat down with Lodging magazine at the NYU International Hospitality Industry Investment Conference to discuss the buzzworthy project.

Virgin has signed a deal with New York-based real estate investment company the Lam Group to manage the new-build hotel, which will be located in the NoMad neighborhood of Manhattan. Virgin Hotels New York will have more than 300 guestrooms, multiple food and beverage outlets, approximately 8,000 square feet of meeting space, and a fitness center with a spa component.

Construction on the northwest corner of 29th Street and Broadway is expected to begin in the fourth quarter of this year, Leal said, after a couple of existing buildings are razed. The hotel is expected to open in 2016.

The Lam Group, which has developed more than 22 hotels and currently owns and operates 10 with another seven in the pipeline, is a newcomer to the lifestyle segment. “They’ve done a great job with developing some of the branded hotels,” Leal said, “and they’ve been thinking about getting into the lifestyle side of the business for a long time.”


According to Leal, Virgin Hotels is close to making deals in San Francisco and Dallas and is very active in Miami and London. “We should have some fairly good announcements before the end of the year,” he said. The biggest news, however, should arrive in the second quarter of 2014, when Virgin’s first property is scheduled to open in Chicago. “There should be a shot heard around the world,” Real said.

Virgin Group Founder Richard Branson first announced plans to transform the 1926 Dearborn Bank Building in Chicago into a hotel in 2011. Leal said the project has taken longer than a typical conversion because changes to the building’s infrastructure had to be approved by the city since it has landmark status. Among the major structural changes was a transformation of the old elevator room to a hip rooftop bar. A hidden atrium that had been covered up for 30 years will become the hotel’s primary food and beverage venue.

The brand is targeting tech savvy travelers who crave customization and efficiency. One of the company’s main targets is the female traveler, Leal said. As of 2012, Virgin’s demographic was 48 percent female and the company sees that trend continuing. “We think it’s about time that a hotel product, particularly a room product, catered to the female traveler without having to be contrived about it,” he said.

While the Virgin Group’s trademark style and cheeky, irreverent tone will be inherent to the brand, the design decisions have been very deliberate to ensure mass appeal. “There will be some innovative technology that will be fun but we’re definitely shooting for comfort,” Leal said.

Virgin intends to leverage its existing 60 million global customers to build a following for the hotel brand. Leal says Virgin Hotels’ technology will be fused with that of Virgin America airline. For example, if a customer is watching an in-flight movie on a Virgin America aircraft she can continue viewing the film on her iPad in the lobby of a Virgin hotel. Hotel customer data also will plug into the airline’s frequent traveler program. Leal was not able to disclose details about the advanced hotel check-in possibilities but said, “we want to be strategic about the check-in process and help make it as seamless as possible.”

Although Leal was close-mouthed about specific Virgin Hotel design hallmarks, he said the look will be completely different than the futuristic aircrafts and the Galactic spaceship that the name Virgin brings to mind.

“I think everybody expected us to come out with some glass tower,” Leal said. “The perceptions of the brand are going to change a bit.”

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