Vlad’s cash inhaler

Many congratulations to Vlad Doronin, the owner, chairman & CEO of Aman Group, who has managed to wrangle $900m from PIF and Cain International for the expansion and so on of the luxury standard setter.

PIF and Cain International are the latest in a line to throw money into Aman and one anticipates a happy future for all concerned because Aman is one of those brands which shows everyone else how to do it. Or what everyone else could do if they had guests willing to pay $3,200/night (NY base rate, according to Bloomberg). 

Jonathan Goldstein, CEO & co-founder, Cain International, was certainly feeling perky, commenting: “We are excited to be investing in this phenomenal brand and look forward to building upon our longstanding partnership with Vlad and his team.

“As the hospitality landscape continues to evolve, we expect to see a growing desire for travellers and investors alike to prioritise experiences supported by preeminent brands like Aman.”

So to conclude: brand brand brand brand brand.

Aman, with its 33 luxury resorts, hotels & private residences in 20 countries, is one of the ultimate hotel brands, having as it does zealot-like guests who travel from one to the other paying its rates and not considering using any other hotels other than under extreme duress. This is the dream.

This is also something which other luxury brands have found hard to copy, hence the preponderance of luxury brands from other sectors trying to get in on the action. But while you may only ever carry a Louis Vuitton bag, the luxury traveller has been shown to be somewhat fickle about where they sleep.

The luxury traveller is also deterred from the idea of branding at all, branding being seen as, well, as bit common. Hotel brands are there to reassure that you’ll at least have a clean shower. When you’re paying $3,200/night you shouldn’t need reassuring about anything. You have people for that.

And so now back to other people and what they’re doing when they leave the house and have to flex their credit card which, unlike Rishi Sunak, they are at least capable of working out how to use to pay for things contactlessly. So not Aman-level people, but au fait with the odd hot stone. 

Last week’s earnings call at Host saw Jim Risoleo, president & CEO, echoing Goldstein with his comment about seeing “a consumer spending rotation away from goods and into services, including travel, and we expect this trend to continue”.

The Host portfolio is not lacking in luxury – and recently-renovated luxury too – and Risoleo was happy to report that it was seeing lively rates at its resorts. In fact five resorts with transient rates above $1,000 for the quarter.

And of those five, the two highest rates were at: The Four Seasons Resort Orlando at Walt Disney World Resort, which had a second quarter transient average rate that exceeded $1,500, and the Alila Ventana Big Sur had a transient average rate of over $2,000.

The Four Seasons, you’ll note, is a brand.

The sector has long been confused about how to value brands – BVA BDRC has done some useful work on brand margin, which helps – although never with Aman, where the Amanjunkies are happy to come back over and over again and the group is valued accordingly. At $3bn this week. 

It appears that the ever-growing ranks of the luxury traveller is finding reassurance in brands. Can they be persuaded to be loyal (Aman doesn’t need a loyalty programme, that’s how loyal its guests are)? Could this loyalty become something useful like a membership fee? The fee-driven global operators have swivelled towards luxury in recent years because that’s where the larger fees are. But with a little attention to the brands, a little more than the filling of white space in a portfolio, could they be more than just reassurance? If you build it, will they come – and forsake all others? 

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