Brand X-ray: Experts scrutinize 4 new brands
 
Brand X-ray: Experts scrutinize 4 new brands
09 MARCH 2015 7:59 AM
A panel of experts critiqued Moxy, Radisson Red, Venu and Yaas. Which brands received a favorable prognosis? And which died on the operating table? 
By  
BERLIN—The brand doctor will see you now. 
 
Make that a team of doctors—or in the case of the “Brand X-ray” panel at the 18th International Hotel Investment Forum, a team of hotel industry experts who put four recently launched brands under the microscope for critique. 
 
Patient No. 1: Moxy Hotels
Marriott International’s ode to the millennial mindset packages select elements of a 4-star hotel in a value-conscious box that is “cool,” “curious” and fun, according to a promotional video run to kick off the examination. 
 
The panel of experts wasn’t buying it. 
 
“I’ve seen it before. It was not very original,” said Marco Nijhof, CEO of Yoo Hotels. 
 
Tarna Schmidt, director of hotel development for FREO Financial & Real Estate Operations, agreed, although she said the backing of behemoth Marriott likely will lead to success.
 
“You have this huge talent pool which is Marriott to tap into,” she said. 
 
The panel also was complimentary of the construction (“It’s easy to build,” Nijhof said) and cost structure (“They’re within the range someone would expect for this type of product,” Schmidt said.) 
 
But the franchise-only contract structure makes it a somewhat inflexible option for owners, said Scott Antel, partner with global law firm Berwin Leighton Paisner in Abu Dhabi. “This is fairly plain, vanilla, what you would normally see on a Marriott franchise contract,” he added.
 
The prognosis: “Overall we see a good prognosis for the future life and growth of Moxy, but we will need a little bit more kick in the butt in terms of hipness and design,” said Michael Widmann, managing partner with PKF Hotelexperts, who also served as the panel moderator. 
 
The rebuttal: “Let’s wait and see,” said Markus Lehnert, VP of international hotel development for Marriott. “This is all something that will be in the fullness of time. … The product can be copied by everybody; if someone walks across this show every year, they will see something that was there the year before. (What matters) is the overall package. The overall package for Moxy is pretty much an emotional one, this emotional one that has a part of the crew. (Moxy executives refer to staff as “crew.”) … It’s the crew where you will see the difference.”
 

Patient No. 2: Radisson Red
Radisson Red positions itself as the younger, hipper version of old sibling Radisson Blu, which, as with Moxy, targets the millennial-minded traveler who values ample public spaces and tech-studded guestrooms.
 
Nijhof, for one, thought the concept stood out in the crowded lifestyle space. “It had character,” he said, adding the brand will be difficult for competitors to replicate. 
 
Antel noted the brand’s flexible contract as well as the willingness of parent company Carlson Rezidor Hotel Group to contribute key money and up to 20% equity in gateway markets. 
 
Again, the investment costs are in line with expectations, Schmidt said. There also exists opportunity for value enhancement. 
 
“Originally, I thought not much; I thought just another of those McDonald (cookie-cutter offerings). But I looked a little bit deeper and saw an interaction between the guest and the hotel, which was an interesting spin,” she said. 
 
The prognosis: Widmann gave it an “overall thumbs up.” 
 
The rebuttal: “We are not trying to create a revolution here,” said Elie Younes, senior VP and head of group development at Carlson Rezidor. “We’re trying to create an evolution.” 
 

Patient No. 3: Venu
Jumeirah Group’s take on the lifestyle segment features high-end offerings at a much higher price point for guests—and for owners. 
 
That means higher fees, noted Antel, although Jumeirah does offer key money in the right situations to get projects off the ground.
 
Schmidt said Venu has promise given its parent company and the corresponding “smart pedigree of hoteliers.” 
 
She saw it as a targeted stab at W Hotels, the game-changing lifestyle trailblazer from Starwood Hotels & Resorts Worldwide. If successful, that mix of character and quality provides a buffer to additional competition that might follow—unlike some of the more affordably priced lifestyle offerings, she said. 
 
“The product’s good,” Schmidt added. “There are a lot of people out there in that (younger) generation who want to spend money.”
 
Nijhof also offered his compliments. 
 
“You cannot compare it to Moxy or Radisson Red,” he said. “It’s innovative. It’s different. They’re really trying to make a design statement there.”
 
The prognosis: “Overall, we look at it quite favorably,” Widmann said. 
 
The rebuttal: “We’re definitely trying not to be a W. We are a contemporary lifestyle brand for the millennial mindset,” said Matt Balcik, VP of operations and brand development for Jumeirah. “We are from Dubai. Those who’ve been there know Dubai is boldly ambitious. There’s always something big and new and innovative happening in that city. We wanted to make sure that fits into our DNA.”
 

Patient No. 4: Yaas
The newest offering from Mangalis Hotel Group is a smart budget brand designed to fill the void of such product throughout Africa, according to a promotional video shown before Yaas’ diagnosis. 
 
“I thought they were very flexible, which one would expect from a smaller upstart brand,” Antel said of the brand’s contract structure. 
 
Mangalis also offers a wide array of development incentives, from key money to furniture, fixtures and equipment deposits to equity (up to 10%).
 
The cost of development was “impressive,” Schmidt said—adding the brand benefits from lower construction costs in Africa. The brand’s cost fundamentals might not prove as favorable if and when it eventually expands into Europe.

Mangalis CEO Olivier Jacquin lays out Yaas’ growth strategy in “Mangalis on a mission to blanket Africa.”

On the negative side: “I’m concerned about the size of the rooms,” Schmidt said. “Perhaps the public areas also need to have a really, really, really good design ethos behind them or they could look a little childish.”
 
Nijhof continued that theme. “It reminded me of a school,” he said, adding the design concept is neither innovative nor attractive. 
 
“I know it’s for Africa. I know that’s where it generated … but I thought it could have been a little bit more uplifting,” he said. 
 
The prognosis: “Overall we like the concept, but we would send you back to the drawing board (on design),” Widmann said. 
 
The rebuttal: Olivier Jacquin, CEO of Mangalis, thanked the experts for their critique and said he’d take it into consideration. He also underscored the dearth of quality, affordable product in Africa. “There is nothing in this segment. When I say nothing, there is nothing.” 
 

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