LVMH has been making headlines with its new strategic partnership with hotel giant Accor for the development of Orient-Express, the direct competitor of Belmond, already fully owned by LVMH. While no specific details have been announced, the partnership is strategic, given the notoriety of the Orient-Express brand and its potential to introduce brand new trains with key investor partners which are already shareholders in Orient-Express, such as France’s SNCF (French National Railways) and Egypt’s state railway company. Arsenale Group is the main shareholder of the two Orient-Express hotels (Rome, Venice)

Accor had already committed to launch Orient-Express La Dolce Vita train in Italy, a new Orient-Express luxury train in Egypt and Orient-Express Hotels in Rome and Venice. All the ventures are only operated by Accor under different brands, each being controlled by other investors / developers. Accor has also set up a dedicated team for Orient-Express Hotels & Trains, separate from the CEO of Fairmont / Raffles and the CEO of Sofitel. However, the launch of Orient-Express (both trains & hotels) has been much slower than initially announced.

LVMH fully controls Cheval Blanc Hotels and resorts, with ultra-luxury properties in Paris, Saint Tropez (2), Maldives, St Barth’s and Courchevel. Except for Paris, all the other Cheval Blanc properties rank among the top three luxury hotels in the respective destinations. Despite several rumours, there are no announcements for any upcoming Cheval Blanc properties. Mention must be made that a Louis Vuitton Restaurant operates in St Tropez and a chocolaterie in Courchevel. All Cheval Blanc properties feature Spas by Guerlain or Dior – also owned by LVMH.

While the fully owned Cheval Blanc properties have been performing exceptionally well, the overhaul of Belmond seems to be slower. Since acquiring Belmond in 2018, more than half of the Belmond properties lag behind in much needed renovations, especially the properties in Italy, which is Belmond’s largest spread of properties. Instead on focusing on the owned assets, there seems to be a shift at Belmond to also operate properties without ownership of assets. LVMH’s Dior has opened Spas at several Belmond properties, including on the Royal Scotman train. Louis Vuitton opened a Cafe in Taormina at Grand Timeo Belmond.

Belmond‘s London property which is only operated by Belmond (not owned by LVMH) has recently been joined by Romazzino, a luxury resort in Costa Smeralda which is fully owned by Qatar (Qatar Investment Authority). Belmond has re-branded the property, which used to be operated by Luxury Collection (Marriott International) and opened it for the summer 2024 without vital renovations. It has been more than 15 years since the last renovation of the resort property which is part of a wider portfolio controlled by Qatar at Costa Smeralda.

LVMH fully owned Bvlgari Group which has a joint venture agreement under the Bvlgari Hotels & Resorts brand with Marriott International. All Bvlgari Hotels properties are owned by various investors, Bvlgari Hotels being purely the operator of the properties. Moreover, Bvlgari Hotels in Paris and London are only franchised by Bvlgari Hotels, with far lesser control. The business model makes a lot of sense especially considering the opportunity for Bvlgari to host its events at Bvlgari Hotels, but shouldn’t other LVMH brands host events at Bvlgari Hotels?

Bvlgari Hotel in London has been reportedly for sale, being located on a back street in Knighstbridge, with new views. Bvlgari Hotel London features a main restaurant by Scarpetta and not Niko Romito which is exclusive at the other Bvlgari properties. Opened in April, Bvlgari Hotel Tokyo boasts a seemingly different calibre of accommodations, even if designed by the same architects (ACPV). Bvlgari Resort Dubai has not been renovated since opening in 2017, as the decision lies with the company which owns the resort. The development of a Bvlgari Residences tower in Dubai is now, on turn, a priority for the developer / owner.

Once fully integrated, Bvlgari Hotels could benefit from extensive partnerships with other LVMH luxury brands, especially fashion brands. It is of notoriety that Anne Hathaway has recently worn a GAP dress at a lavish Bvlgari High Jewelry event in Rome, with many VIP guests in Haute Couture. Once fully controlled, Bvlgari Hotels may no longer be under pressure to join Marriott International‘s loyalty program (Bonvoy). It would also have avoided the odd situation with the opening of Stella Di Mosca Hotel in Moscow – see article below.

Bvlgari Hotels’ evolution has been remarkable, balancing between a dedicated team at Bvlgari Group HQ in Rome and Marriott International. Bvlgari Hotels in Milan, Rome, Shanghai, Beijing and Bali have been and continue to be among the most highly ranked luxury properties in each destination. The opening of Bvlgari Hotel Rome in 2023 has been a resounding success, with a most spectacular property, which is at the core of a recently launched movie ”An Emperor’s Jewel” documenting the story behind the hotel.

LVMH should carefully consider the business model for its hospitality business. Franchising is not a long term viable option in luxury hospitality, at the very opposite of franchising in retail (fashion, jewellery watches etc.) Achieving and maintaining the highest service standards is a much more complex undertaking in luxury hospitality and requires far more sustained investments. Unlike all other luxury sectors, in luxury hospitality, the dynamics may change drastically once a new player is launched. Staffing has been (post Covid) and continues to be a major challenge for the luxury hospitality industry.

Major luxury hotel groups such as Dorchester Collection, Oetker Collection, Aman and Maybourne continue to own the majority of their hotel assets, to ensure not only service standards but also a constant up-keep of the properties which requires uninterrupted investments. Coherence and consistency in luxury hospitality is paramount in branding, sales and marketing, too. Innovation is critical from dining to wellness.  Nevertheless, opting for solely operating in certain lower tier destinations (locations) could be strategic.

Venice Simplon Orient-Express - Grand Suites

Venice Simplon Orient-Express – Grand Suites

May 26, 2024

Located in the heart of Moscow, Stella di Mosca Hotel is housed within a fully renovated and restored neoclassical building  offering the ideal escape in the very heart of Moscow, providing a tranquil refuge from the bustling city center and tourist crowds. The hotel which has a generous courtyard garden, features 65 rooms and suites and boasts the highest rates in Moscow, from EUR 830 per night.

With a sprawling 1400-square-metre spa, complete with a 25-metre indoor heated pool, an Italian restaurant, and a chocolate boutique, the hotel epitomizes sleek luxury. Rooms and suites are among the largest in Moscow, with the most diverse views. The architecture of the building including the interiors have been entrusted to Antonio Citterio & Patricial Viel Architecture firm, with custom made furnishings and decor elements.

Before the invasion of Ukraine the property was supposed to open as Bulgari Hotel. It has recently opened with so many similarities to all the other Bulgari Hotels that there is no need for branding under Bvlgari, logos having been erased – remaining visible only with the bathroom amenities and the original Bulgari books are spread around the entire hotel. Furniture by Italian companies, tiles, marble, lighting, bed linen, bathroom fixtures, curtains are all identical with the other Bulgari Hotels.

All Russian guests know this is the ”Bulgari Hotel in Moscow”, which is also reflected by the social media, who obviously see no constraints in covering the property as the ”Bulgari Hotel Moscow”. Sometimes, a brand or service does not necessarily need to be branded. The Michelin starred Niko Romito Restaurant has been replaced by an experienced Italian Chef and highly experienced Chefs are in charge of Pastry too.

Russians are a very important target for all the Bulgari Hotels therefore, this opening may create a lot of confusion. For the grand opening of the hotel in March, the wealthiest Russians attended a live classic orchestra concert and they were all aware of attending the opening of ”Bulgari Hotel Moscow”. Some Russian elite flew back to Moscow (from abroad) for the event.

Mention must be made that none of the 12 Bulgari Hotels are owned by Bulgari, Bulgari Hotels or any other entity controlled by Bulgari’s parent company LVMH. Of all 12 hotels, Bulgari Hotel Paris and Bulgari Hotel London are franchised by Bulgari Hotels, a joint venture between Marriott International and Bulgari – the 2 properties are operated by their owners. The rest of the hotels are operated by Bulgari Hotels.

Bulgari Hotels & Resorts is publicly included in Marriott International‘s list of top luxury brands. The booking engine GDS of Bulgari Hotels runs on Marriott International’s platforms. Many of the Marriott International staff around the world, especially those in charge with sales and development include Bulgari in their title (ex ‘Marriott Intl Luxury Brands”). Mention should be made that the investment per room for a Bulgari Hotel is twice as much as the investment per room for a Ritz-Carlton hotel.

Another major difference between Marriott Intl.’s luxury brands, for example, The Ritz-Carlton and Bulgari Hotels & Resorts is the fact that Bulgari Hotels does not participate in Marriott’s loyalty program ‘Marriott Bonvoy‘. Over the past few years, post pandemic, many luxury hospitality insiders argue that partial membership of Marriott Bonvoy could actually be beneficial for Bulgari Hotels & Resorts. It is probably only a matter of time.

Bulgari’s parent company LVMH owns and operates all Cheval Blanc Hotels and Belmond hotels and trains. Many of LVMH’s top Maisons are also closely collaborating with most of the Cheval Blanc and Belmond Hotels & Trains. Obviously, there is a lot more consistency and integration between the properties which are owned and operated by LVMH. Most recently, Louis Vuitton Restaurant and Cafe have opened at Cheval Blanc, White Hotels and Belmond hotels.

Integrating Bulgari Hotels into LVMH‘s Hospitality unit would make a lot of sense, but not all the Bulgari Hotel properties (each Bulgari Hotel is owned by different owners). LVMH masters hospitality excellence with a team of high experienced hospitality professionals. Mentioned must be made that Bulgari Hotels in Milan, Rome, Bali and Dubai (not for long) rank first among all luxury hotels in the respective cities.

Bulgari Hotels in London, Tokyo, Paris, Beijing and Shanghai do make it to top 5 among luxury hotels in the respective destination. Presently, Bulgari Hotels is helmed by Bulgari CEO Jean Christophe Babin, actively involved in hotel operations, as well as Silvio Ursini, Senior Vice President Bulgari. All Bulgari Hotels (except London) feature a restaurant by Chef Niko Romito. None of the Bulgari Hotels properties have an instagram account, all being centrally controlled.

Most recently, Bulgari Hotels has announced future openings in Miami (2026) and Maldives (2027) and a Bulgari Residences Tower – ”Bulgari Lighthouse”  2027 (fully owned by Dubai Holding’s Meraas), while a previous hotel project in Los Angeles had been cancelled.

Most probably, should the property in Moscow have been owned by LVMH, this unfortunate incident may not have happened.

Oliver N. Petcu