In January, the long-awaited Virgin Hotel Chicago opened its doors in the historic Old Dearborn Bank Building. Plans for the hotel were announced in the fall of 2011, more than a year after the four-star lifestyle brand launched. Now that the first property is out of the gate, Virgin Hotels development is picking up speed—a Nashville property is expected to debut in fall 2016, a project at 29th and Broadway in Manhattan is slated for a late 2016 opening, and at least two other deals will be announced this year. Virgin Hotels CEO Raul Leal has an extensive background in both boutique and legacy brands, and he has plenty to say about the increasingly crowded lifestyle market.
What took so long to open the first Virgin Hotel? It took us about a year to wait out the end of existing leases and get our permits. Once we got into the actual design, we also had to consider the constraints of working on a landmark building—especially considering the ambitious plans we had for this property. That process did take longer because we had to maneuver around bringing the building back to its original glory while accomplishing the things we wanted to accomplish within that space.
What’s the guestroom experience like? Our objective was to create a better guestroom. When we started the design process, we tried to look at everything from the point of view of a female traveler, as women have a discerning eye for design and functionality. Women also provided us with some great information on features that make the room more comfortable and user friendly. We designed it with that view in mind, and I think men and women alike will be happy with the end result. Sometimes in the lifestyle hotel sector, it’s more about design than it is about comfort. We wanted to marry both.
How did you maintain an affordable price point? We wanted to look at the common items in a typical hotel from a different point of view. Hotel beds are a good example. We already have a great mattress, but we wanted to go beyond what’s on bed and reimagine the bed itself. How could we make it a place where someone can sit without having to prop her back with pillows, or where two people can sit comfortably at the same time? That was an easy fix and didn’t necessarily cost us more money.
You have experience with both lifestyle and branded hotel segments. How does that knowledge inform your role today? When I was running Desires Hotels, we had a diverse collection of independent boutique and lifestyle hotels ranging from three to five stars. Those ten years gave me an opportunity to learn a lot about the independent boutique and lifestyle business. Prior to that, I ran legacy brands, like Hilton and Sheraton, so I’ve been on both sides of the fence. The legacy brands bring a tremendous amount of value to the table in terms of consistency and products, and the lifestyle brands bring a bit of entertainment, because the lines of work and play have been blurred. I have a perspective on both sides, and that’s why we hope to be the brand that bridges the gap between both.
What’s your take on the new lifestyle hotel brands announced recently? I think there are real lifestyle brands, and there are pretenders [laughs]. Lifestyle brands are not always about age and demographic. The consumers that stay at lifestyle brands are usually tech savvy, they travel quite a bit, and they’re more likely to be experience-oriented than points-oriented. When you start rolling out lifestyle brands in a mass way, they lose their uniqueness and ability to deliver special service.
Do you worry that the market is becoming crowded? I understand the big brands need to stay competitive with each other, so when one rolls out a lifestyle brand, then the other one has to. That’s the kind of thing you have to be careful about though or this space could quickly become homogenized.
