The name may sometimes prompt a few giggles but Virgin Group’s Virgin Hotels is positioning itself to be a serious hotel developer in the United States—first in urban markets such as New York, San Francisco, Los Angeles, Boston, Washington, D.C. and Miami. I had an opportunity to see a presentation by Raul Leal, president and COO of the company, at this past week’s NEWH Leadership Conference in Orlando. Leal impressed the crowd not only with what he said but how he said it—sprinkling in humor and insightful industry analysis—and received a standing ovation in the process. This guy was born to be social and fits right in with Virgin Group Chairman Richard Branson’s fast-growing, fascinating and fun conglomerate (more than 300 branded companies and approximately 50,000 employees worldwide).
Knowing Branson’s interest in environmental issues—his company’s Virgin Green Fund has invested in a number of biofuel and renewable energy and efficiency ventures—I was hoping that Leal would explain just how green Virgin Hotels would be. While not providing specifics, he said, “Sustainability will be built into everything we do.” Leal took a poke at optional towel and linen replacement programs and limp water pressure in water-conserving showerheads and emphasized that both would not have a place in Virgin Hotels. In regard to the towel and linen programs and showerheads, what Leal meant, I suspect, is that Virgin Hotels properties will be so water and energy efficient that asking guests to “sacrifice” will not be necessary. I also suspect he does not believe the two should be part of a luxury hotel experience.
Virgin Hotels, according to its website, will operate as a third party manager, partner with ownership, or acquire properties directly. The first properties will not be new construction but retrofits of existing buildings. The company is currently in search of office buildings or similar types of buildings that would be easy to renovate to meet Virgin Hotels standards. “We have to find the right ‘box’ from the very beginning,” Leal said. The first two building purchases are expected to be announced in the next 60 days and the first two hotels will not open until sometime in 2012. Virgin Group has established a property venture with entrepreneur Alberto Beeck and hospitality and real estate investor Diego Lowenstein to acquire up to $500 million in properties over the next few years. Virgin Hotels may eventually do new construction.
An ‘Example of Sustainabilty’
Leal would not commit to renovating the hotels to LEED standards but left open the possibility of pursuing LEED certification at some point. He emphasized that his company will implement “design that works, be a cultural leader, an example of sustainability, and deliver brilliant service consistently.”
In response to a question about purchasing and the types of materials his company would be using in its hotels, Leal said, “Whoever we meet with, we will be asking about sustainability.”
While sustainability will be built into the DNA of the brand, Leal said he does not think they will be putting a “green banner on the hotel.” In other words, Virgin Hotels’ green touches will be subtle.
The designer of the guestrooms for the hotels will be announced this week. The guestroom concept has already been determined. The demographic targeted will be wide ranging—from 21 to 65.
Time will tell if Virgin Hotels delivers on its sustainability commitment. “The expectations for delivery are tremendous,” Leal said. Until then, we will have to give the company the benefit of the doubt. Virgin Group’s revenues were about $18 billion in 2009 and Richard Branson should not be underestimated.
See You in Portland, Oregon
I will be attending and exhibiting at the Green Meeting Industry Council’s 2011 Sustainable Meetings Conference in Portland, Oregon from February 20 to 23, 2011. The event will take place at the Portland Doubletree Hotel. To register for the conference, go to www.sustainablemeetingsconference.com.
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