LVMH Eyes Vacancies in Hotels
By Tom Ryan
LVMH, the owner of fashion names such as Louis Vuitton, Gucci, Puma and Donna
Karan, announced plans to open a series of luxury hotels starting in Oman and
Egypt. The hotels will incorporate LVMH brands such as Vuitton and Dior boutiques
and Givenchy spas.
The French company has created a new division, LVMH Hotel
Management, to “oversee
the group’s activities in the luxury hotel sector” and “maximize
the value of its brands,” according to a company statement.
The two new
hotels, named Cheval Blanc after one of LVMH’s Bordeaux vineyards, are slated
to open in 2012. The move follows the successful 2006 opening of the LVMH-backed
Cheval Blanc hotel in Courchevel, France.
The first Cheval Blanc resort would
sit on a desert island in the Indian Ocean off Oman and consist of 32 villas,
complete with private beach and swimming pool. The other consisting of 40
suites will be located on an island on the Nile.
“Other projects are currently under study in exceptional destinations,” LVMH
said in a statement.
The company won’t own the real estate or finance construction. Similar to
models embraced by other high-end chains such as The Ritz- Carlton, it runs
the resorts under management contract.
A Wall Street Journal article noted that a few other luxury brands
have dipped their toe into the hotel business. Jeweler Bulgari SpA has two
resorts, in Milan and Bali, run by Marriott International. Giorgio Armani recently
opened his first hotel in Dubai.
Among other consumer brands, Hard Rock Café appears to be the most successful.
Disney also operates hotels around its resorts and Nickelodeon has a hotel
in Florida. Bass Pro Shops is opening a hotel next to its flagship store in
Springfield, MO. Although its legendary diners are all closed, Howard Johnson’s
still has a sizable hotel business.
Discussion Questions: What do you think of LVMH’s move into hotels? How
would you rate the opportunity to showcase its brands at its hotels? Can you
think of other consumer brands ideally suited for the hotel business?
- LVMH signs luxury hotel deal with Orascom Holdings – Reuters
- LVMH Extends Posh Label to New Luxury Resorts – The Wall