THE FUTURE OF LUXURY HOTELS

  
The luxury hotel space is competitive but players are stepping up to the plate to keep up with rapidly evolving consumer demands. Here we investigate some on the cutting edge and what’s ahead.

Last month, in conversation with Robert Cheng, Group VP Marketing of the prestigious Peninsula Hotels Group, despite the plethora of exciting initiatives in the pipeline for the company, we found ourselves continuously drawn back to a particularly prevalent discussion on technology, innovation and their place in the luxury hotel space.

Keeping the balance between innovation, customisation and still maintaining that personal touch – which so often sets high-end hotels apart from the rest – is always top of mind, according to Cheng, and the risk of taking technology too far is always present.

Nevertheless, the increasing use of technology across the board in the luxury hotel space is a trend which is impossible to ignore – and the appetite for futuristic additions to the luxury hotel experience is palpable, particularly from the lucrative millennial set.

As Jérôme Destors, Director of Hotel IT at technology firm Amadeus, stated in its report ‘Hotels 2020 – Beyond Segmentation’: “Unique, connected, informed are just three watchwords that define the hotel guest, both today and in the future.”

Hence, understanding a customer is a strategic imperative for hotels in today’s world. We are operating in an era of unprecedented change. Brands that don’t recognise and respond to this run the risk of falling behind the competition permanently.”

So the question today is two-fold – how are luxury hotel providers currently innovating and what can be learnt from their pioneering advances and; what does the future hold for the hospitality space?

“Brands that don’t recognise and respond run the risk of falling behind the competition permanently.”

Two Heads Are Better Than One

First and foremost, when we hear ‘future’, often we think digital, smartphones, space travel. But innovation can also be more than just technology on its own.
Cutting-edge concepts that challenge the norm and offer new, exciting and exclusive options for the luxury consumer are often borne from forging inventive partnerships with like-minded entities and breaking new ground.
The Peninsula Hotels Group, for its part, has “never been afraid of technology” says Cheng, and has employed a dedicated research & development team for 30 over years to constantly scan innovations occurring across the globe and trial and adapt viable technology and concepts to suit the group’s properties.
But a perfect example of the aforementioned balance between technology and a personal touch materialised when the group established an innovative and exclusive partnership with online luxury fashion retailer and publisher NET-A-PORTER.com earlier this year.

  
 
The tie-up saw the two collaborate to create a series of stylish mini guides to the world’s most dynamic gateway cities.

The exclusive style savvy bite-sized guides were published on the respective hotel’s section of The Peninsula website (peninsula.com), and featured in the travel section of NET-A-PORTER.com’s fashionable The Edit magazine (net-a-porter.com/peninsula) during the week of launch.

According to Cheng, the duo will reunite again shortly to publish the next five in the series during New York Fashion Week in the Fall. But, as he hinted last month: “There’s more to come there, so stay tuned!”

“These meetings of innovative minds have since resulted in a range of out-of-the-box tie-ups.”

The Marriott Group is also pushing ahead, with research emanating from its 10,000-square-foot Innovation Lab and an Innovation Team, which is continuously brainstorming about what the hotel of the future will entail.

These meetings of innovative minds have since resulted in a range of out-of-the-box tie-ups such as a recent expansion of its partnership with TripAdvisor to add Marriott’s global hotel portfolio to the TripAdvisor Instant Booking platform from this summer, capitalising on the increasing shift in consumer behavior to trust recommendations from fellow guests over straight advertising.

Marriott and Netflix also officially announced a deal last month, which will allow guests to log in or subscribe to the streaming service via Internet-connected guest room TVs across several Marriott properties.

“Our collaboration with Netflix responds to changing consumer preferences in the way our guests access and watch content, while recognizing the leading role Netflix is playing in driving this transformation,” Matthew Carroll, Marriott’s VP of brand management, said in a statement.

Back To The Future

Starwood Hotels & Resorts Worldwide has, similarly, joined the ranks with the launch of its own high-tech design lab – Starlab – at its headquarters in Stamford, CT earlier this year.

The company has gone on to become the first to offer keyless hotel room entry, allowing guests to check in via their iPhones (or Apple Watch), and the group began trialing a robotic bellhop , dubbed Botlr, across its Aloft hotels in Cupertino and Silicon Valley in August last year.

Botlr, a three-foot high robot in the vein of R2-D2, allows guests to send request items – ranging from toothbrushes, smartphone chargers, magazines, newspapers and even snacks – from their smartphones, which can then be delivered by Botlr within two to three minutes.

When the robot reaches the guest’s door, the system calls the room, alerting the guest to the delivery.

  
Starwood’s robot butler, Botlr

Starwood is also in the midst of a roll-out for its smart-mirror concept, which offers guests immediate access to the weather, news and sports scores with a touch of the mirror’s surface.

A Bluetooth connection can also be accessed to link the guest’s phone so they can see their Twitter feed and other alerts directly on the mirror, which is powered by Panasonic technology.

No doubt the Starlab innovation team has also had plenty to do with Starwood’s recent interest in the Oculus Rift virtual-reality headset – bought last year by Facebook for $2bn – which Starwood reportedly aims to roll out to its Element gyms progressively in the near future.

“Gesture interfaces and 3D mobile phone displays could be common by 2020.”

The Amadeus report confirms that while technologies such as augmented reality and mind control headsets are already with us and are set to spread, “developments such as gesture interfaces and 3D mobile phone displays could also be common by 2020”.

Gesture interfaces for one, have the potential to drastically change how we view and interact with information and although the technology does exist – gestural interfaces have been developed by firms including Microsoft’s Kinect and Oblong Industries – this is still largely undiscovered territory for the hospitality industry.

Facial recognition though, is in the early stages of roll-out across the hospitality industry, with Universal Studios Japan one of the first hotels to make use of the technology in partnership with NEC via its NeoFace® Watch solution.
  
NEC NeoFace® Watch

NeoFace Watch uses cameras installed in and around the hotel to recognize the faces of guests, check registered guest information, identify VIPs and undesirable guests, and alert the hotel staff.

Alerting staff to the arrival of a VIP (via mobile or otherwise), before they check in allows the hotel staff to implement smoother and more appropriate check-in procedures, according to the firm.

The recognition takes less than a second and it can be integrated with the hotel’s loyalty and customer relationship management system so that customers can begin to be catered to in a tailored fashion as soon as they step through the door.

However, it is essentially an opt-in program and guests decide whether if they want to be part of the hotel’s database.

“Some 500,000 guests have been enrolled in the Universal program since June 2014.”

“Ultimately, we’re not selling facial recognition, we’re selling enhanced customer experience that’s enable by face recognition,” explained Allen Ganz, senior account development for the biometric division at NEC North America when queried.

Indeed, according to reports, the customer response has been positive to date and some 500,000 guests have been enrolled in the Universal program since June 2014 with the numbers growing steadily.

Mobile Aspirations

While there are many opportunities available for further evolution, mobile is one area where luxury hotels have excelled of late.

Marriott International introduced a new feature to their mobile app this month with Mobile Request, which operates by offering guests a chat function to make real-time requests at individual hotels and to have immediate responses and interaction.

Additionally, a drop-down menu also allows guests to request services and amenities, such as extra towels and pillows.

Inititally available to 46 hotels worldwide, the new feature will eventually be rolled out to all Marriott hotels this summer and will be available to the 50 million members of Marriott Rewards, the company’s loyalty program.

Dubai Marriott Harbour Hotel & Suites in the UAE, Amman Marriott Hotel in Jordan and Cairo Marriott Hotel & Omar Khayyam Casino in Egypt were some of the first hotels to get the app.

Following in the footsteps of Ritz-Carlton, Starwood, and Marriott, The Four Seasons also just released a new mobile app, a multi-functional global app which acts as a ‘do-everything concierge’, catering to guests’ every whim – from checking in and out, to ordering room service, housekeeping and laundry, to requesting a car from the valet.

Guests can also book luggage pickup and airport transfers or use the content-rich application to peruse local recommendations on individual destinations, curated to their ‘moods’.

Unlike other hotels, The Four Seasons has also set itself apart by not only offering the app across its 94 properties across 39 countries, but also making it available to all users, not just those in the loyalty program.

The luxury chain also plans to release a Simplified Chinese version of the application next month (August 2015), and a special version tailored to the preferences of Chinese travellers will reportedly be issued by the end of the year.

Four Seasons also has plans to provide the app in additional languages down the road, starting with Arabic.
However, it’s interesting to note that Cheng reveals that the Peninsula Hotels Group opted out of the app race – on purpose – to cater to its niche customers’ preferences.

“On purpose – we did not do a native app,” he says. “Because we felt that we wanted to make sure that we were at the guests’ disposal in terms of them being able to get access from their mobile device, but our guests didn’t want extra real estate on their phones dedicated to a Peninsula App, so we did the next best thing and gave them a mobile-optimised site.”

“On purpose – we did not do a native app.”

Switching Off
On this note, it’s clear that while looking to the future is essential – listening to the customer is paramount. Not all customers check into a luxury hotel to be catered to by technology and stimulated by curated content and box-breaking collaborations. Some of them may just want to switch off.

As Jonathan Ford, Founding Creative Partner at Pearlfisher recently pointed out – a survey by BCG claims that 51 per cent of US luxury consumers are now looking for ‘these enriched experiences’ over product, and a new and growing experiential luxury movement is tapping into this.

“Consumers are seeking new ways to take time out, slow down, contemplate and appreciate,” he says.

So, while some hotels are speeding ahead into the future, other luxury operators are experimenting with the opposite and leaning towards a more traditional, yet inspired, offering by allowing guests to truly power off and enjoy the serenity.
  
Villa Stéphanie (Above & Main Image)

German luxury resort Villa Stephanie is one such operator which offers its guests the option to activate an an Internet kill switch in each guest room – marking one of the first times a hotel has offered such a ‘digital detox’.
Check into the Villa and the flick of a switch activates a Wi-Fi grid blocker, which will actively block approximately 96 percent of Wi-Fi signals, and limit texts and tweets.

Eco-hotel, The Adrère Amellal, near Siwa in Egypt has gone a step further and actually banned mobiles from public areas of its premises to ensure that its up-market hotel guests – which have included Prince Charles and the Duchess of Cornwall – are not bothered by ringers, texts or loud phone conversations while on vacation.

The resort – which also has no electricity – only allows mobiles inside the bedrooms, and is made entirely from traditional materials such as salt-rock and palm leaves, relying entirely on torches, beeswax candles and stars to illuminate its 40-rooms, which reportedly start at £460-a-night.
  
  The Adrère Amellal in Egypt

While these customisations may not be the initial images that spring to mind at the sound of the word ‘future’ – it’s far from a long shot to imagine that in years to come, luxury hotels may choose to go down one of two paths – one, leveraging innovative partnerships and technology to trail-blaze modernity, or the other – to offer their guests an opulent and organic respite from a world which is increasingly connected and buzzing around the clock.

One thing, however, is for certain. Wherever luxury hotels choose to innovate next – it will be exciting, because a segmentation is in process – and, as the Amadeus report suggests – it’s all based on personalisation, where the guest is given choice over almost every aspect of their hotel experience.

(C) Luxury Society, by Daniela Aroche, 08 July 2015.

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THE LATEST DIGITAL: CARTIER, PRADA & TOD’S

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An excerpt from Diane von Furstenberg’s Glossi

Montblanc teams up with Harrods to launch an in-store augmented reality experience, as Hermès partners with Harper’s Bazaar to retail a limited collection online.

In the past month the digital luxury landscape has been dominated by the moves of the media and retailers. As the New York times announced restructuring measures to the tune of thirty senior journalists, Net-a-Porter announced its intention to launch a full-blown fashion glossy.

As Rupert Murdoch confirmed he will shutter The Daily – the iPad-only magazine he launched two years ago – social-shopping company ThisNext unveiled Glossi, a platform which allows users and brands to create their very own digital magazines.

But perhaps nothing was more surprising, than to hear that Hermès will be retailing a selection of footwear on the eCommerce venture of fashion magazine Harper’s Bazaar. Digital may have muddied the waters, but never have the lines between brand, retailer and publisher been so blurred.

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Boucheron, Website

Jeweller Boucheron has relaunched its website in the colours of the new visual identity of the maison. Visitors can browse the portal in English, French, Japanese and Simplified Chinese, or take a virtual 360-degree tour through the Boucheron flagship store at Paris’s Place Vendôme. For the first time, Boucheron is sharing the history of its founders and products, whilst boosting social connectivity with Facebook, Twitter, Instagram, Pinterest and YouTube integration.

Website & Source: boucheron.com

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Cartier, e-Commerce

Cartier has relaunched its e-Commerce offering in the United States, with an enhanced e-boutique and 360-degree product display and videos. Alongside the online boutique, the site offers information regarding after sales service, product maintenance and store locations, as well as dedicated sections to heritage, CSR projects, events, savoir-faire and social media.

Website: cartier.com
Source: Luxury Digital

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Ferrari, App

Ferrari has launched an App for brand fanatics, offering users the opportunity to discover its rich history, simulate driving, wake up to the sound of a V12, take Ferrari-themed photos with RedCam or personalise devices with wallpapers. Built for the iPhone and iPad, the app comprises of photo galleries, videos and factsheets about current and classic models as well as selected Sports Prototype and Formula 1 cars.

Download: Ferrari Mania
Source: Luxury Daily

Georg Jensen Holition Gesture Experience from Holition AR on Vimeo.

Georg Jensen, Augmented Reality

Holition has created a unique application for the special launch of George Jensen’s ‘Fusion Ring Builder’ website. The website was activated to run in store using gesture to drive product selection, simply by selecting product with a hand gesture. The user can play and see the separate components of the Fusion ring come together from all angles using the iPad, or use one of Georg Jensen’s personalised iPads at Harrods, Selfridges London and Selfridges Manchester.

Website: georgjensen.com
Developer: Holition
Source: Retail Jeweller

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Harper’s Bazaar, Hermès, eCommerce

Hermès is set to debut some of its products on ShopBazaar.com, the eCommerce site powered by fashion glossy Harper’s Bazaar. In the first e-commerce channel outside of its own website, the French luxury house will retail six shoe styles. “We thought it would be great to expand the introduction of Hermès footwear to Bazaar’s audience,” explained Hermès CEO USA Robert Chavez.

Website: ShopBazaar.com
Source: Fashion United

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Luxure, iPad

Luxure has launched its inaugural iPad Edition, in a bid to showcase its existing magazine content in the most spectacular, insightful and explorative of climates. The iPad Edition of Luxure will provide insight into an array of photography complemented by the new retina display, alongside rich additional content via audio, video and animation.

Download & Source: Luxure

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Montblanc, Virtual Pop-Up

Harrods London and Montblanc UK collaborated to produce a virtual pop-up store, featuring an extensive selection of artworks from the Montblanc Cutting Edge Art Collection, permanently exhibited in Hamburg. By pointing a smartphone or tablet at the image displayed in one of the Montblanc Harrods windows, users could not only view the artworks, but purchase four exclusive Montblanc products through Harrods.

Website & Source: montblanc.com

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Prada, iPad

In celebration of its Fall Winter 2012 menswear show in Paris, Prada collaborated with fashion illustrator Richard Haines, to produce a limited edition book featuring 150 artworks based on the collection. In the final chapter of the project the Italian brand has launched an iPad application, allowing users to take an interactive tour of a virtual palazzo designed by James Lima, to discover both the artworks and collection.

Download: Il Palazzo
Source: Prada

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Shanghai Tang, App

In time for the holiday season, Shanghai Tang has launched apps on Facebook and Sina Weibo, allowing fans to create Christmas wish lists according to their Chinese zodiac sign and share it with their friends. The wish list is focused on Shanghai Tang’s Christmas collection of homeware, displayed in an animated kaleidoscope, and users can then personalise the products they want to include prior to sharing the final wish list with their friends.

Apps: Facebook, Sina Weibo

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Whitewall, Website

Whitewall is pleased to announce the launch of the new beta version of Whitewallmag.com, which will continue to cover contemporary art, luxury lifestyle, fashion, and design, and how these industries intersect. Debuting on the eve of Art Basel Miami Beach (ABMB) 2012, the site will focus exclusively on pre- and day-to-day coverage of the fair.

Source: whitewallmag.com

For more in the series of The Latest Digital, please see our most recent editions as follows:

The Latest Digital: Balmain, Yoox & Mandarin Oriental
The Latest Digital: Versace, Balenciaga & Ritz-Carlton
The Latest Digital: BMW, Maserati & Salvatore Ferragamo


© Luxury Society, The Latest Digital: Cartier, Prada & Tod’s, 05 December 2012, by Sophie Doran.


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THE LATEST HOTELS: KYIV, ABU DHABI & WESTERN AUSTRALIA

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The Berkeley River eco-resort, accessible only by seaplane or boat in Western Australia

InterContinental Hotel Group launches a brand dedicated to Chinese consumers, whilst Sofitel opens its second property in the UAE and Hilton’s Conrad launches in New York

Luxury hotel brands were some of the quickest to acknowledge the potential of Mainland China, developing properties far beyond Beijing and Shanghai well beyond luxury goods brands came knocking. But what they are now also beginning to gauge, is the growing significance of the affluent Chinese traveller, an increasingly global and mobile consumer who interacts with brands in Shanghai, Wuhan, San Francisco and Paris.

Thinking along these lines, the InterContinental Hotel Group has developed a new hotel brand based on four priorities it feels are important to Chinese travellers: tradition, rejuvenation, status and familiar spaces. HUALUXE – a hybrid of ‘Hua’ meaning majestic China and luxe – has been launched with the understanding that the Chinese traveller wants the status of a world-class luxury hotel group combined with a feeling of pride in China and respect for Chinese tradition.

The hotel giant expects the number of domestic travellers in China to reach 3.3bn in 2015 and forecasts the China hotel market will grow by 5-8% annually by 2030. The group has reportedly signed over 20 letters of intent and expects the first hotel to be open in late 2013 or early 2014, with plans to roll the brand out in 100 Chinese cities in the next 15-20 years.

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Sofitel, Abu Dhabi

As part of the new Capital Plaza Complex, Sofitel Luxury Hotels has opened its second property in the UAE at the eastern tip of Abu Dhabi’s Corniche. The hotel’s 282 rooms and suites elegantly blend modern design with authentic French “art de recevoir” combined with Arabic hospitality, featuring Jean Cocteau lithographs and sculptures inspired by Brancusi.

Website: sofitel.com
Source: Gulf News

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Swissôtel, Chicago

Swissôtel has unveiled renovations at its Chicago location, inspired by the work of the building’s original architect, Harry Weese. The lobby now features backlit glass panels etched with Chicago’s skyline, where check-in pods replace the traditional bulky hotel front desk. Concierges are equipped with tablets for quick access to all necessary information.

Website & Source: swissotel.com

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Fairmont Grand Hotel, Kyiv

Fairmont Hotels & Resorts is proud to announce the opening of Fairmont Grand Hotel Kyiv, the luxury brand’s first hotel in Eastern Europe. The 258-room, 54-suite property offers spectacular views of Podil Square and the Dnipro River, as well as a fully equipped business centre with 24-hour access as well as secretarial services.

Website: fairmont.com
Source: Elite Traveler

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Radisson Blu Istanbul Asia, Istanbul

Offering Super chic and contemporary Istanbul accommodation, the Radisson Blu Hotel, Istanbul Asia has 195 stylish, well-appointed guest rooms and suites, featuring a mix of designer furnishings and every conceivable modern convenience, including free high-speed Internet access, Anne Sémonin bath amenities and a 37-inch LCD television.

Website: radissonblu.com
Source: Hospitality.net

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The Westin Lake, Las Vegas

Starwood Hotels & Resorts Worldwide has launched The Westin Lake Resort and Spa, its second location in Las Vegas. 493 rooms and suites, feature the world-renowned Westin Heavenly® Bed, exclusive SuperFoodsRX® menus, White Tea Aloe bath amenities and in-room, high-speed Internet access alongside ergonomic workspaces.

Website: westin.com
Source: 4-Traders

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Viceroy, Maldives

Located in Shaviyani Atoll, Viceroy Maldives is an ultra luxury resort comprising of 61 Villas with 32 over the water and 29 on the beach, designed for maximum privacy. The resort features five distinct dining venues, specialised massage techniques, yoga practices and dietary guidance as well as a series of Ayurvedic, regional and traditional spa treatments.

Website: viceroyhotelsandresorts.com
Source: CPP Luxury

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Conrad, New York

Rising 16 stories along the Hudson River waterfront, Conrad New York is the first NYC address from Conrad Hotels & Resorts, the global luxury brand of Hilton Worldwide. The 463 all-suite luxury hotel features panel televisions, one-touch technologies, wireless Internet access and iPod sound docks. Contemporary design by interior designer Jill Greaves has incorporated custom furnishings through separate areas for work and sleep as well as spacious bathrooms.

Website: conradhotels3.hilton.com
Source: Market Watch

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Capofaro, Salina

The Capofaro Malvasia & Resort has reopened following extensive renovations, on the Eolian Island of Salina in Southern Italy. One of the first Mediterranean wine resorts and retreats, the property is surrounded by the lush of Malvasia vineyards on soft slopes degrading towards the blue sea. Just twenty rooms are laid out across seven acres of vineyards, all of which have a terrace overlooking the sea.

Website: capofaro.it
Source: Grassi + Partners

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Berkeley River, Western Australia

Berkeley River luxury resort has opened in Far North Western Australia, on a 4600 hectare site accessible only by seaplane and boat. Located near a stunning river, with waterfalls and fresh water holes, 20 luxury “eco friendly” villas feature open air bathrooms with a shower and full bath. The resort can also arrange private boat and helicopter expeditions for guests.

Website: berkeleyriver.com.au
Source: The West

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Westin, Xian

Starwood Hotels & Resorts Worldwide has launched The Westin Xian, its first entry into the Shaanxi province of China and the first hotel in Xian to have its own museum, paying tribute to the ancient history of China with a collection of over 2,000 artefacts. 329 rooms and 32 apartments feature LCD televisions, rainforest showers, extra-large closets, personal refreshment centres, and Westin’s signature Heavenly beds.

Website & Source: westin.com

For more in the series of The Latest Hotels, please see our most recent editions as follows:

The Latest Hotels, Istanbul, Panama & Berlin
The Latest Hotels, Mumbai, Moscow & Riviera Maya
The Latest Hotels, Kitzbühel, Tuscany & Hanoi


© Luxury Society, The Latest Hotels: Kyiv, Abu Dhabi & Western Australia, 24 April 2012, by Sophie Duran.


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CHINA’S MARKET FOR WINE SHOWS MATURITY

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A recent Sotheby’s auction in Hong Kong, where an anonymous Chinese bidder purchased 300 bottles of Chateau Lafite for $539,280.

We take a look at the current climate for fine wines in Mainland China, following the launch of the first-ever Chinese investment fund dedicated to wine.

China’s market for fine wines is maturing and augmenting at a dizzying rate. Wine imports to Hong Kong are poised to break the US$1 billion barrier this year, after soaring by 65% in the first eight months of 2011. And that doesn’t even take the booming Mainland into consideration, a wine market valued at 75 billion Yuan (roughly US$10 billion) in 2009. Domestic wines still account for over two-thirds of the local market, but demand for imported grape wine is surging, as the rising middle class take more overseas travel, exposing them to western customs and wine culture.

Not that interest is sudden. Chinese wine buyers were instrumental in the recovery at the top end of the market, following the dip seen in the wake of the global economic crisis in 2008. The Mainland is now the largest importer of Bordeaux by volume, edging out Germany and driving a jump in exports of French wine. According to Luxuo, exports from the famed French region rose 34 percent in value and 23 percent in volume between July 2010 and June 2011.


“Mainland China is now the largest importer of Bordeaux by volume, Hong Kong is the largest importer by value.”


Messages regarding the market are mixed. Jing Daily recently reported that fine wine prices retreated 7.5 percent in the third quarter of 2011 and that demand for the highest of high-end bottles, particularly Chateau Lafite, were thought to be showing signs of slowing after a nearly three-year-long tear – due partly to the ubiquity, rampant counterfeiting and unsustainably high prices of Lafite and other high-profile wines.

Echoing this sentiment, prime lots of Chateau Lafite, Chateau Latour, Mouton Rothschild and Margaux failed to sell at Sotheby’s Finest and Rarest Wines sale last week in Hong Kong. It was the first auction not to sell out entirely since Sotheby’s entered Hong Kong in 2009. Yet over at Christie’s, just last September, an anonymous Chinese bidder bought 300 bottles of Château Lafite-Rothschild bundled into a single lot for $539,280 – the most expensive single lot sale this year.


“Fine wine prices retreated 7.5 percent in the third quarter of 2011 and demand for the highest of high-end bottles is showing signs of slowing”


Christie’s head of wine for China, Simon Tam, refused to become pessimistic, suggesting instead that the market is simply calming down. “The first generation of wine lovers to discover Lafite now have long-lasting stock and they don’t need to accumulate more.” Mathieu Chadronnier, managing director of CVBG Grands Crus, went so far as to say it was necessary. “We have gone through a period of constant growth. Prices can’t go on increasing forever – this correction was needed.”

The buying landscape is clearly changing. In a first for the country, the Chinese government has approved the first-ever Chinese investment fund specialising in wine, which plans to invest over €110 on wine over a five-year period. Ling Zhijun, a banking professional and wine enthusiast who manages Pacific Asset Management of Beijing, founded the Dinghong Fund. Investors must part with a minimum investment of €1m for a company and €100,000 for an individual, and buying will be managed by Bordeaux negociant Vintex & les Vignobles Grégoire.


“The first generation of wine lovers to discover Lafite now have long-lasting stock and they don’t need to accumulate more.”


Philippe Larché, one of the partners in negociant Vintex and the fund’s primary advisor and main supplier, revealed that over one-third of wines to be purchased will supply the cellars of fund investors. “The fund is not just about buying and selling grands crus, but also educating customers and introducing them to Bordeaux,” he remarked. “We expect to bring each investor to discover the vineyards of Bordeaux, and to set up wine masterclasses in China, with the participation of owners and winemakers.”

Mr Larché remained relatively unfazed by recent results at the Sotheby’s auction, instead suggesting the result was indicative of a natural evolution in the market, as bidders understand more about wine and how it trades. He, alongside Sotheby’s worldwide head of wine, Serena Sutcliffe, suggested that Second Growths are becoming increasingly popular in Asia, as knowledge of different châteaux broadens.

“China now understands that we don’t have only first growths in Bordeaux. The market is maturing. But I am not anxious. I am very confident that the first growths will go up again in value.”


For more in our series of weekly wraps, please see our most recent editions of The Bulletin as follows:

Luxury Brand CSR: No Longer Just an Option?
Optimism Shines at Frankfurt’s 2011 Motor Show
Paris & Beijing Legitimise Commitments to Design


© Luxury Society, China’s Market for Fine Wine Shows Maturity, 31 October 2011, by Sophie Duran.


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LUXURY, FULLY CUSTOMISABLE IN 2012

 

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Coach’s Year of the Dragon collection, developed in collaboration with Chinese artist Zhang Lan.

As luxury consumers become more diverse and discerning, we investigate how brands are approaching an increasingly fragmented international market.

I would be happy to argue that luxury has become one of the most globalised industries in the world. Rapid and aggressive expansion by super brands like Louis Vuitton, Rolls Royce, Rolex and Four Seasons, backed by powerful super conglomerates like LVMH, Richemont and PPR, has seen luxury permeate areas of the earth once better known for human rights conflicts than seven-star hotels.

At the risk of oversimplifying the situation, luxury has never been bigger – nor has it ever had larger levels of retailers, consumers, publicity and services. As the game moves at a breakneck pace, success in this industry has become driven by Darwinian thinking, where brands must quite literally, adapt or die.

Whether it be conforming to the consumer driven digital revolution, selling goods on the internet or responding to the need for personalisation of iconic products, it has been those brands quickest to embrace change that have remained the most agile and best positioned to absorb the effects of economic instability.


“ For me bespoke is exactly what luxury should be. Old-fashioned luxury is about having something especially made for you – Anya Hindmarch ”


Difficult when you consider that luxury is unique, in that the customer and the Maison are always right. Keeping a brand “luxury” is just as much about dictating what that brand is and what it stands for, as much as it is about bending over backwards to give a client what they want. But in saying this, in 2012 it feels like the pendulum of favour may be swinging toward consumers. Brands seem to have conceded the need to deliver outside their traditional value charter – whether that is a Facebook page or Hermès Sari.

The fruits of such logic are ever apparent when one looks at the products luxury brands will be taking with them into 2012 – products that are not only regionally and culturally thoughtful, but often made-to-order and sometimes designed entirely by the customer. Whilst 2011 was an active year for the launch of bespoke initiatives for brands, I can’t help but think it was just a taste of what’s to come. Vanessa Friedman often muses that three times makes a trend – if that is the case, expect to see a veritable avalanche of bespoke
options in the coming twelve months.

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Anya Hindmarch and an example of a made-to-order product from her Bespoke boutique.

Mass Customisation

Customisation is nothing new – it is if anything, a founding principle of luxury – but it certainly is something incredibly popular in fashion and accessories. And in an era where luxury has penetrated the mass market and something afforded by the middle class, what could be more appropriate? The only thing more luxurious than a signature Burberry trench, is a signature Burberry trench made entirely to your specifications, which technology has now made a reality on a global scale.

Burberry’s Bespoke service allows clients to choose fabrics, patterns, designs, cuts and even colours. In addition, they can to scroll through various options in collar styles, cuff straps and mink linings, among others. The completed product is be delivered within four to eight weeks.


“ In an era where luxury has penetrated the mass market and become a status symbol of the middle class, what could be more appropriate? ”


UK accessories brand Anya Hindmarch, established a dedicated bespoke retail space in London over two years ago, most recently launching online. Speaking with The Telegraph, the designer mused that “old-fashioned luxury is about having something especially made for you. It’s something that has a story.” Her Knightsbridge boutique has an on-site craftsman, developing an array of leather goods as diverse as £75 bookmarks, through made-to-measure wallets, to Hindmarch’s £15,000 crocodile-leather Ebury bags.

And as luxury menswear becomes more and more important to the landscape, it is unsurprising to learn that Louis Vuitton and Bally now both offer made-to-order shoes – and in the case of Vuitton, made-to-order handbags for women. Prada launched customisable eyewear and accessories options last year, Gucci moved into made-to-measure suits and shoes. Brioni recently revealed that 40% of its sales are derived from its bespoke products, stitched by hand in the Southern Italian town of Penne.

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Blancpain’s “Chinese Dragon” Caruso, limited to a run of only 50 units worldwide, retailing for approximately $220,000.

Regional Customisation

Regional influence has extended well beyond local inventory management and appropriate
communications strategies. Today geography not only exudes overt influence on product design but seeks to compliment – or should I say capitalise – on local culture and religion. 2012 will make an example out of China, with the significant number of products designed by luxury brands, celebrating the Year of the Dragon.

Just this week, Vertu has launched a luxury dragon-themed mobile phone based on its Signature collection, with prices hovering above $20,000. Coach has collaborated with Chinese artist Zhang Lan on an accessories collection, adorning the brand’s signature designs and mahogany colour scheme with golden dragons rendered in a style reminiscent of traditional Chinese ink painting (Jing Daily).


“ How far can brands travel in their quest to please consumers before they lose their own specific defining values and cultural heritage? ”


Piaget threw an elaborate gala in Beijing to launch its Dragon and Phoenix collections, Shanghai Tang collaborated with Nespresso for its Dragon collection and Rolls Royce has released a limited edition Phantom for the occasion – unsurprising when they now claim to sell more cars in China than they do in the West.

Swarovski lauded the event with a jewellery and timepiece collection whilst Versace designed a collection of flashy accessories starting at $5000, for distribution exclusively in the Asia Pacific region. Blancpain debuted its “Chinese Dragon” Caruso, priced at 1.4 million Yuan (approximately $220,000), limited to a run of only 50 units worldwide.

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Louis Vuitton’s 2010 celebration of Diwali, which included a collaboration with Indian artist Rajeev Sethi, whose window concepts were installed from Beirut to Shanghai and from Johannesburg to Oslo.

Many of these sentiments were evident in India 2011, when Hermès produced a range of Saris and Bottega Veneta its ‘Knot India’ collection, coinciding with its exhibition in Mumbai. Louis Vuitton was characteristically ahead of the curve back in 2010, when they feted Diwali, the Indian Festival of Lights, on a global scale.

Whilst pursuing these types of strategies is neither a surprising move nor a new one – particularly when you consider the fanfare that is Christmas – an increasingly diverse customer base is forcing brands into new territories and cultures that are not there own, as we have seen with the Year of the Dragon. But to remain successful, history suggests they must also stay true to their luxury positioning, the specialities and strengths of their own native soil and essentially, retain tight control their of brand image – easily achieved
by controlling the products on the market.

The question remains, how far can brands travel in their quest to please consumers before they lose their own specific defining values and cultural heritage? Does a Sari made in France by Hermès, hold real significance to an Indian consumer? How will products change again with the emerging strength of Brazil and continued prosperity in Russia?

With any luck 2012 will answer some of these questions, but as always, we invite our members to join the discussion below.

For more in our Bulletin series, please see our most recent editions as follows:


© Luxury Society, Luxury, Fully Customisable in 2012, by Sophie Doran.


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