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- 18 Aug 2011
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Can the Armani Hotels Concept be Saved?

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The entrance to the Armani Hotel, Dubai


Oliver Petcu, managing partner of CPP Management Consultants, wonders whether or not the Armani Hotel concept will survive, after lukewarm success in Dubai

His contribution to the world of luxury fashion is one of the most significant to date, so much so that Italians often refer to him as ‘’Re Armani’’ or Armani King. Giorgio Armani has not only created an iconic luxury brand but also a highly profitable business empire, with his licenses for sunglasses, watches, jewellery, flowers, chocolates and restaurants, to furniture, mobile phones, fragrances and beauty products.

His fashion division remains by far the most profitable, mostly due to his clever diversification and collection of product lines aimed at different target consumers: Giorgio Armani, Armani Collezioni, Emporio Armani, Armani Jeans and Armani Exchange. The second most successful Armani division is fragrances and beauty, licensed to cosmetics giant L’Oreal.

Further to his empire, Armani was among the first designers to announce the development of his own hotel, to reflect not only his strengths in the interior design but also to create a different concept of hospitality based on his own personal lifestyle philosophy. The birth of a joint venture company five years ago, with UAE’s largest developer EMAAR Holding, seemed to be the ideal business model to launch. Long before knowledge of the global financial crisis, which would have such dramatic effects on Dubai.


 Armani was one the first designers to announce development of his own hotel, to create a different concept of hospitality based on his own personal lifestyle philosophy 


I stayed at the Armani Hotel less than six months after it opened, and from my review you can grasp that I had an enjoyable stay. I was impressed with the interiors, especially the furniture and décor, as well as the quality of materials and finishes. Food and beverage were of a particularly exceptional standard.

Service, however, seemed disconnected and inconsistent throughout the hotel – largely the result EMAAR’s revolutionary idea to build a hotel without front office and concierge desks. Instead, all guests being are welcomed by individual Lifestyle Managers, allocated to each guest prior to arrival. Following my stay, for me, this will never work – given the fact that one Lifestyle Manager, must in turn be a receptionist, concierge, guest relations agent and cashier simultaneously.

While the concept was conceived as predominantly a lifestyle, leisure destination, the hotel does not have access to a beach, it does not have a pool and the SPA is far too small – key elements for a luxury stay, particularly given Dubai’s climate throughout the year.


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Giorgio Armani at the opening of the Dubai hotel


According to our sources, more than 50% of the Lifestyle Managers resigned in the first 6 months of operations and staff from other departments were gradually leaving too, most citing the pressure in the working environment and a concept that was not working. Then, there came the resignation of hotel’s General Manager in March this year, followed more recently, by the departure of the company’s CEO. All these changes could not come at a worse time, considering the imminent opening of the second Armani Hotel, in Milan, later this fall.

It is also interesting to note, that Armani likely has one of the highest staff turnovers among the major international luxury fashion companies, in terms of middle and top management positions. Armani’s top fashion executive resigned earlier this year, forcing Mr Armani to re-think the entire top management structure.

I imagine that management from the existing Dubai hotel would be instrumental in implementing the Armani Hotel concept, in this second project, which has a particular importance located in the heart of Armani’s home city, Milan. I regard the Milan hotel not only as a flagship but also as a reference location for all possible future locations.


 the biggest mistake of the Armani Hotels project was not to open the first hotel in Milan 


Mr Armani is notorious for his frequent visits to the Via Manzoni flagship Emporio Armani, only steps away from his headquarters and home. He is often spotted on early mornings re-arranging store windows. With the hotel above the Emporio Armani store, Mr Armani’s involvement will definitely be beneficial for implementing his vision and for ensuring a top level of customer service.

This is why, I believe, the biggest mistake of the Armani Hotels project was not to open the first hotel in Milan, which could be more easily infused with Armani DNA. Yet, given the latest developments and the poor performance of the hotel in Dubai, could it be that the Milan opening already comes too late to save the Armani Hotels concept? Or could a change in the structure of the joint venture with EMAAR be enough to ensure success for the Milan opening?


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CPP Management Consultants Ltd is a Central and Eastern European consultancy company specialized in the luxury industry. CPP acts as a liaison between international luxury brands and regional / local investors looking to set up a business in this industry.

www.cpp-mc.com