Can the ARMANI HOTELS concept be saved ?

Giorgio Armani with Mohammed Alabbar of Emaar

Italians often refer to him as”Re Armani” or Armani King and his contribution to the world of luxury fashion is undeniable with a legacy likely to run for centuries. Giorgio Armani has not only created an iconic luxury brand but has also created a profitable business empire, with his label licensed from sunglassses, watches, jewellery, flowers, chocolates, restaurants to furniture, mobile phones, fragrances and beauty products.

His fashion division remains by far the most profitable, mostly due to his clever diversification and split into several product lines aimed at different target consumers: Giorgio Armani, Armani Collezioni, Emporio Armani, Armani Jeans and Armani Exhange. The second most successful Armani division is fragrances and beauty products which is licensed to cosmetics giant L’Oreal.

But then, almost a decade ago, Armani was among the first designers to announce the development of his own hotel, to reflect not only his designs in the interior decorations but also to create a different concept of hospitality based on his own personal lifestyle philosophy. The signing of a joint venture company with UAE’s largest developer EMAAR Holding five years ago seemed to be the ideal business model, especially considering, at the time, no-one could even anticipate the world financial crisis which would have such dramatic effects on Dubai.

I stayed at the Armani Hotel less than 6 months from opening and from my review (published in the Review section) you could grasp I have had an enjoyable stay. I was impressed with the interiors, especially the furniture and decor as well as the quality of materials, finishes. Food and beverage was of an exceptional standard. However, service seemed disconnected and inconsistent throughout the hotel and this was due to the fact that Emaar’s revolutionary idea was to build a hotel without front office and concierge desks, rather all guests being welcomed by individual Lifestyle Managers, allocated to each guest prior to arrival. Following my stay, my conclusion was that this would never work, gievn the fact that the Lifestyle Manager was, at the same time receptionist, concierge, guest relations agent, cashier.

While the concept was conceived as predominantly a lifestyle, leisure destination, the hotel does not have access to a beach, it does not have a pool and its SPA is far too small, these being key elements for a luxury stay, given Dubai’s climate throughout the year.

According to our sources, more than 50% of the Lifestyle Managers resigned in the first 6 months of operations and staff from other departments were gradually leaving too, most citing the pressure in the working environment and a concept that was not working. Then, there came the resignation of hotel’s General Manager in March this year, followed, last week by the departure of the company’s CEO. All these changes could not come at a worse time, considering the imminent opening of the second Armani Hotel, in Milan, later this Fall.

I would have imagined that management from the existing Dubai hotel could be instrumental in implementing the Armani Hotel concept, in this second project, which I believe has a crucial importance as it is located at the heart of Armani’s home city, Milan. I regard the Milan hotel not only as a flagship but also as a reference location for possible future locations, the same way, the Emporio Armani store, on the first two floors of the future Armani Hotels, has been, since opening, a global showcase of Armani’s collections.

Mr Armani is notorius for his frequent visits to the Via Manzoni flagship Emporio Armani, which is steps away from his main office and home. He has often been spotted on early mornings re-arranging store windows. With the hotel above the Emporio Armani store, Mr Armani’s involvement will definitely be beneficial for implementing his vision and for ensuring a top level of customer service.

That is why, I believe the biggest mistake of the Armani Hotels project was not to open the first hotel in Milan which could be more easily infused with Armani DNA. Yet, given the latest developments and the poor performance of the hotel in Dubai, could it be that the Milan opening already comes too late to save the Armani Hotels concept ? Or could a change in the structure of the joint venture with Emaar be enough to ensure success for the Milan opening ?

At the same time, mention should also be made that Armani is probably among the major international luxury fashion companies with the highest turnover of staff in middle and top management positions. Armani’s top executive of his fashion empire also resigned earlier this year, forcing Mr Armani to re-think its entire top management structure. The fact that Mr Armani, at 75, does not have any direct heirs pressure on him to ensure continuity will most likely increase.

Oliver Petcu, Managing Director, CPP Luxury Industry Management Consultants Ltd.