Miami Beach-based Lionstone Development looks to add properties in U.S. and Latin America while sister company Marzocco Development eyes Italy.
Editor’s note and correction: This story was updated on 1 August 2017 to reflect Paradigm Hotels Group as the owner/developer of the Virgin San Francisco.
MIAMI—Lionstone Development CEO Diego Lowenstein is looking for other opportunities to grow the company’s portfolio—including adding at least one other Virgin Hotels property to its roster and gaining a bigger global footprint.
Lionstone owns the original Virgin Hotels property in Chicago and is scouting locations in different cities across the U.S. The company specifically is looking for conversion opportunities in South Florida because of its Miami roots, the company’s leader explained.
“We know how important a market like South Florida can be for the global expansion of a brand, and we see South Florida as a gateway for Virgin Hotels to Latin America as well,” Lowenstein said.
Lionstone’s Virgin property is distinctly different than the second Virgin property being developed in San Francisco by Paradigm Hotels Group, but the two will have common threads, Lowenstein said.
“The biggest difference is that the Virgin Hotel in Chicago was an adaptive reuse of an existing landmark in Chicago, while the Virgin Hotel in San Francisco is being built new, from the ground up,” Lowenstein said. “Both projects have their own unique design, with common threads, like our signature layout for our Chambers, our distinctive Commons Club bar and restaurant space, and two of the most beautiful rooftop lounges you can imagine.”
The Chicago property is the lone Virgin Hotel open. The brand’s website indicates in addition to Paradigm’s San Francisco property, six more hotels owned by other developers are scheduled to open by 2020: Silicon Valley, California (2019); Nashville, Tennessee (2019); New York City (2019); Dallas (2019); New Orleans (2019); and Palm Springs, California (2020).
Miami Beach-based Lionstone looks for brand partners that embrace innovation, push the envelope and disrupt the traditional industry methodologies, Lowenstein said.
“From physical design and technology to unmatched customer service, we want partners, like Virgin, who will capture the consumer’s attention across all generations,” he said. “Virgin is forward-looking and multigenerational, and it’s brands like this that differentiate themselves enough to outperform other hotel brands in today’s competitive market.”
Lionstone’s hotel portfolio is focused on Latin America. In addition to the Virgin Chicago, the company’s roster includes the Ritz-Carlton Bal Harbor, The Ritz-Carlton South Beach and the Epic Hotel & Residences in Miami; the Hilton Curaçao, Sunscape Curaçao Resort, Floris Suite Hotel in Curaçao and the Holiday Inn Aruba.
“Separate from Virgin Hotels, Lionstone Development is currently assisting in large-scale development for multiple hotel sites in the Caribbean, which will be announced later this year,” Lowenstein said.
The Lowenstein family invested in assets in the Caribbean outside of the Lionstone silo, Lowenstein said.
“(We’re) mostly buying distressed unencumbered assets that needed money and needed a story,” he said. “Many of those assets that we bought in the early part of century remain with us.”
The company’s CEO said Lionstone established credibility when it converted the former DiLido Hotel—a Miami Beach art-deco property designed by Morris Lapidus and opened in 1953—to a Ritz-Carlton hotel in 2004. Diego Lowenstein’s father, Alfredo, and grandfather, Luis, acquired the hotel in 1971.
“South Beach was starting to come into its own,” Lowenstein said of the 2004 opening. “We hit that initial cycle with the first true luxury property to come back to Miami Beach in 40 years.
“That was a great development for us. We were a catalyst for the Ritz-Carlton brand. … It was the first of a new generation for Ritz-Carlton. We really embraced the local nature of the asset and the community. … It was the one that put us on the map.”
That map will expand to Europe as the Lowenstein family’s development company in Italy, Marzocco Development, plans to convert and reposition “a significant portfolio of assets” in Florence and Tuscany into luxury hotels, the CEO said.
“There are assets that are over 1,000 years old, and some are 400 or 500 years old,” he said. “It’s one of the most powerful destinations in the world.”
Diversifying cash flow and market location is essential, which is why the family ventured into Europe, he said.
“For me, that’s a powerful thing to keep the family involved,” he said. “Having your family be part of your business, there’s nothing like it.”
The family will create its own brand—Lowenstein declined to provide details—to accommodate these assets.
“We want to start showcasing these hotels to the world, but they’re just too special to brand,” he said. “The brand’s architecture for our hotels is being devised now and will be disclosed in the near future.”
The Lowenstein family’s holdings include approximately 3,000 rooms operating or under development, Lowenstein said.
“For us it’s about smart growth,” he said. “It’s about having a unique approach to growth because we’re generational. We want locations that can stand the test of time.
“We have different silos because we like the development aspect of the business, the owner/asset management side and the management side,” Lowenstein added. “Future growth is about approaching the silos with a concept of diversity.”
As technology’s role continues to be more ingrained in consumers’ lives, it’s important for hotel brands and owners to stay on top of it, Lowenstein said.
“Technology has to go with ease of use,” he said, noting that the Virgin app allows guests to manage their experience right down to ordering roomservice.
“We have to be mindful of not being over techy … it has to be smart, approachable, easy to use,” Lowenstein said. “Most good brands are really careful what they do with customers—you don’t want to bombard your clients, because if you do, instead of building brand management you’re going the other way.
“The reality is that we’re going to a world of clients that need full personalization. They need to be in full control of their content management. We empower that.”
Providing a user interface with which each individual client can tailor their experience is essential for long-term success, he said.
“A happy customer that comes to your hotel and gets a better sense of environment will return,” he said. “It’s all about customer acquisition.”