Brand proliferation continues, but we wonder: Will there be a point where there are simply just too many hotel brands out there? Or have we already reached it?
Like many other luxury hotel groups before it, Jumeirah Group hopes it can appeal to even more travelers with its newest brand — one that will be “lifestyle” and “millennial minded,” said interim CEO Marc Dardenne.
Speaking to Skift at the International Luxury Travel Mart in Cannes, France, Dardenne said the new brand will launch in early 2018 and will “have smaller rooms” but will be located in key areas and retain a focus on strong food and beverage. He added that the new brand, which has yet to be fully revealed, has three to five projects already signed on.
The desire to launch a secondary brand for the 20-year-old company, Dardenne said, was driven by the fact that it allows the company to extend its reach in markets where it already has properties under the luxury Jumeirah name — an argument that many hotel companies have used to launch new brands.
Other luxury hotel groups that have done similar brand launches include Trump Hotels and its new Scion brand, Capella Hotels and Solis, and Langham and Langham Place, for example.
“With the Jumeirah brand, you can only have so many locations,” Dardenne said. “But secondary brands let you have three to four hotels in particular destinations.”
Room for More Lifestyle Brands
Dardenne said that, despite the saturation of the lifestyle hotel segment, he believes Jumeirah’s new brand will be “differentiated enough” to stand out from the rest.
“I’m fond of competition,” he said. “We need it, otherwise we wouldn’t improve on our products and services.” He said that some of the “legacy brands” in the lifestyle segment are now 15 to 20 years old, and while they’ve established dominance in the market, there’s an opportunity for companies like Jumeirah to “leapfrog” ahead of the competition. “You might say we’re late, but there’s an opportunity to be great,” he said.
Jumeirah’s decision to enter this space isn’t surprising, said Makarand Mody, assistant professor of hospitality marketing at the Boston University School of Hospitality Administration. “Lifestyle brands certainly represent the way forward for most hotel companies at the moment. Companies are launching these either as soft brand collections, or as organic brands like W was for Starwood. Consumers today have a strong desire for experiences, and the technological, social, and economic trends that lead to these desires certainly make lifestyle brands a must for most hotel companies going into the future.”
While Dardenne wouldn’t assign any particular star rating or category to this new brand, he said it would be priced lower than Jumeirah Hotels & Resorts, and would likely not be associated with Jumeirah’s own Sirius loyalty program. He did, however, note that marketing for the new brand would have some sort of association with the Jumeirah Group brand so consumers know that it’s associated with the company.
Mody, however, wonders how that might work, especially if the new brand will not carry the Jumeirah name and will not be connected to its loyalty program. “I’m not sure I understand the rationale for this, since most companies are looking to use their loyalty program as the core value proposition that they build multiple brands around,” he said. “But Jumeirah does not have the problem of too many brands yet, so perhaps the lack of integration will not be an issue.”
Dardenne said this new brand would allow the company to focus more on the high-tech aspect of hospitality, versus Jumeirah, which is much more high-touch. “We can be much more innovative with this high-tech approach and be that much more personalized in terms of the guest experience,” he said.
The contrast between the established Jumeirah brand and this newer brand will be interesting, said Mody, especially “given the loose definition of a ‘lifestyle brand.’”
“The Jumeirah brand has been built over the years to connote bespoke luxury, a certain lifestyle, so whether consumers can get on board with something that has the Jumeirah name but does not provide the same level of service, in correlation with a lower price point, is something that they will have to carefully consider,” he said. “The lower level of service is not a problem in itself — lifestyle brands are changing the definition and consumer expectations of luxury — and can be offset by creating highly sought out experiences. Innovative food and beverage is certainly one way to do this.”
Still, he added, “I suspect that this brand, while millennial-focused, will still potentially be upscale at the very least to be able to remain consistent with the Jumeirah brand.”
In addition to launching a new brand next year, Dardenne said the company is also considering debuting luxury tented camps in the near future.
“We’re still talking about it, and it’s something we’re considering,” he said. “With the Jumeirah brand, it has to be ultra luxury.”
And the company’s search for a new CEO continues. Dardenne, who has been with the company for 18 months and became interim CEO in July, said the search for a new permanent CEO is still going on but that the company should have some news shortly. When a new CEO is appointed, Dardenne will resume his role as chief operating officer.
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Photo credit: Burj Al Arab Jumeirah in Dubai is pictured. Jumeirah Group plans to launch a new brand for younger travelers early next year, its interim CEO said. Jumeirah Hotels & Resorts