As China is still on track to account for a quarter of the global luxury goods market by 2025, connecting with Chinese consumers in a personal way is more critical than ever before. And one popular way heritage names are doing this is by opening five-star hotels to welcome fans inside their universes.
Ever since Palazzo Versace opened in Australia back in 2000, the world’s leading fashion and jewelry brands have launched either a dedicated suite in an existing location or a stand-alone hotel somewhere around the globe.
There’s the Baccarat Hotel in New York, the Bulgari Hotel in London and Paris, Round Hill Hotel & Villas by Ralph Lauren in Jamaica, the Armani Hotel in Dubai, The Ritz in Paris’ Suite Coco Chanel, and London’s Dior Spa at The Dorchester, to name just a handful.
In 2021, Gucci collaborated with The Savoy to brand The Royal Suite in celebration of its 100-year anniversary, bringing then-creative director Alessandro Michele's otherworldly maximalism to the hotel, and this year Christian Louboutin opened its first hotel called Vermelho, in Melides, Portugal.
Branded hotels: A creative exercise in customer relationships#
These vacation spots have become the ultimate vehicle for brands to directly interact with their consumers, cultivate loyalty, and enhance existing layers to their brand image.
For example, the Bulgari Hotel, primely located in Knightsbridge and a minute's walk from Harrods, is a complete embodiment of the brand. In addition to the handbags on display in glass cabinets in the lobby, the hotel captures the breadth of the brand’s history, luxury appeal, and craftsmanship.
Managing Director of the hotel, Kostas Sfaltos, tells Jing Daily, “For the company, creating Bulgari Hotels & Resorts was not a business opportunity but a creative exercise in customer relationships, transferring the values of the jewelry brand into a new experience for those already passionate about the brand.”
There are just 85 rooms, each kitted out with Bulgari silver-thread headboards, intricately designed lighting, glamorously historical coffee table books, and House-branded toiletries. From the 47-seat cinema and ballroom to the hotel's rustic Italian restaurant, Sette, the Bulgari Hotel offers consumers an opportunity to understand the extent of the brand’s ethos of luxury firsthand.
“Many of our guests from China find the brand first through our jewelry and watches, then they become loyal to our hotels,” says Sfaltos. “Bulgari Hotels & Resorts is an extension of the Bulgari experience, another aspect of our rare world of craftsmanship to belong to. For the brand, it has been a natural step into hospitality; our company approaches hotels as if they were jewels, very rare and exquisitely crafted.”
Catering to high-spending Chinese guests#
It's Bulgari's distinct connection to the jewelry and watch world that is luring in fans from China. For guests from the mainland, Sfaltos notes that the Bulgari Suites, Spa, Italian afternoon tea, and Edward Sahakian cigar lounge are the most frequently requested services.
In fact, a report by Morgan Stanley cited that Chinese consumers are more willing to increase their spending on hotel accommodations post-Covid-19. Out of 2,000 consumers surveyed across 19 provinces, 20 percent cited accommodation as their top travel expense, compared to 17 percent in 2017 and 2020. It’s a valuable opportunity for luxury brands, and China is at the center of growth.
In response to the high level of interest from the nation, the Bulgari hotel ensures it always has Mandarin-speaking employees on site and provides guests with the option of a Chinese breakfast. The hotel even recently sourced a rare bottle of Moutai, a popular brand of Chinese liquor, specifically upon request for one visitor.
As the second-largest consumer of luxury, the mainland’s interest in luxury-branded hotels is no surprise. Like the Bulgari Hotel, New York City’s Baccarat Hotel also sees a large proportion of interest from this region, with Chinese millennials often splashing out 3,000 (21,900 RMB) on its signature crystal afternoon tea.
Kerry Bergin, Regional Director of Leisure Sales for Baccarat Hotel in NYC, says that it is evident that China is resurging post-Covid-19.
“The January reopening of outbound traffic from China was the moment New York City hotels have been waiting for, particularly at the luxury level,” she explains. “The domestic rebound we have experienced over a year ago with Americans starting to travel again will be duplicated in the second half of 2023 with travelers from China. They are ready, willing, and able to travel and spend for top-tier experiences.”
Luxury brand fans want more than products#
Supported by a partnership with Chinese agency Heavens Portfolio, which connects clients to global luxury travel agencies, the Baccarat Hotel's popularity largely derives from fans of the Baccarat crystal brand.
Everything ties back to the brand. The famed Rouge 540 scent is pumped out in every corner of the premises. Guests drink from glassware, marvel at the chandeliers, and wash with toiletries, all by Baccarat. There is even an on-site boutique selling all of the brand’s latest products, with many Chinese visitors having their purchases shipped by the hotel directly to their homes.
“Our service culture is rooted in more than 250 years of Baccarat tradition. As shepherds of this iconic brand brought to life in a hotel, we strive to reach the same perfection that Baccarat crystal is known for and deliver the best that can be done for all stakeholders,” explains Guia Llamas, Hotel Manager at Baccarat Hotel New York. “These are the same principles that Baccarat crystal values and are practiced by the artisans in the manufactory.”
Running since 2015, the Baccarat is proof of how buying into a brand goes beyond products today. Consumers want to fully experience the luxury lifestyle these household names claim to offer, whether it's through hospitality or experience-led purchasing.
Moreover, the organic social media exposure from guests feeds the cultural capital of these brands. Visitors want to post that they stayed in Bulgari’s hotel or the Gucci suite at The Savoy, simply because it's cool and gives them clout.
Hotels are not only a source of revenue and cultural capital; they are also hangout spots that feed fan culture surrounding the brand. Beloved by Chinese tourists, they are a lucrative opportunity for luxury houses, and business is booming.