Bulgari offers $ 39,000 hotel suite for those who could spend millions on a necklace
Italian jeweler Bulgari is betting he’s someone who would spend millions more on one of his emerald, sapphire and diamond encrusted necklaces.
In December, Bulgari opened a luxury hotel in Paris, the brand’s seventh in a segment it expects to grow to more than 20 in the years to come. Hotels are part of Bulgari’s strategy to expand its business lines to attract customers to its core jewelry business.
“The hotels offer an ultra-rich clientele,” said Bulgari CEO Jean-Christophe Babin. “Hotels are a source of recruitment to put at the service of fine jewelry.
Bulgari is one of the five best-selling brands of the LVMH Moët Hennessy Louis Vuitton SE team,
the Parisian luxury goods conglomerate which also owns Dior, Louis Vuitton and dozens of other brands. The Rome-based jeweler has grown rapidly in the decade since its takeover by LVMH.
““The hotels offer an ultra-rich clientele.“
Although the conglomerate does not outperform Bulgari, analysts estimate that its revenue this year will be around 2.5 billion euros, or about 2.8 billion dollars, more than double that. that it was ten years ago. Revenues from hotel reservations now represent around 5% of Bulgari’s total revenues, Mr. Babin said.
Despite the pandemic, overall revenue has shown strong double-digit growth this year compared to 2019, he said. The global jewelry industry is one of the fastest growing luxury goods segments. In an industry still dominated by smaller family-owned manufacturers, Mr Babin said Bulgari is winning over customers who increasingly want the reliability of a global brand behind a purchase that can cost hundreds of thousands of dollars and more.
“The outlook is extremely positive,” he said. “We have had a fantastic year, much better than we thought 12 months ago. “
Luxury brands take a risk when they put their name on hotels or other businesses that are not part of their core business. A brand could suffer if hotel services fall short or if jewelry buyers see the brand as tainted by overextension. Bulgari does not distribute jewelry sales in hotels, so it is difficult to determine if hotels are helping to move more necklaces, bracelets, rings and other trinkets in Bulgari’s collections.
Bulgari manages its hotel business in a joint venture with the hotel company Marriott International Inc.
Bulgari designs the hotels and takes on certain operational roles, such as choosing the hotel chefs. Marriott takes care of back office tasks such as managing reservations and other technical aspects of the facilities. Analysts say the arrangement reduces Bulgari’s risk and allows the brand to focus on its main hotel interest: cultivating a wealthy clientele for its jewelry business.
Bulgari staff, for example, organize private sales of jewelry in hotel guest rooms and preview upcoming collections. “This is one of the best examples of category expansion,” Luca Solca, analyst at Bernstein, said of the hospitality industry. “The brand is exposed to a broader and relevant consumer audience. “
Rooms at the new Parisian hotel, located a two-minute walk from the Arc de Triomphe, start at a rate of € 1,400 per night. The penthouse suite is spread over two floors and has a roof garden, two bedrooms, a view of the Eiffel Tower and a nightly rate from € 35,000, or over € 39,000. $. There is a Bulgari shop on the ground floor. In the basement, the hotel has a spa and a 25-meter swimming pool.
“Obviously, this is not a corporate clientele,” said Mr. Babin. “It’s far too expensive to be acceptable to business. Even for CEOs, they wouldn’t pay that money. The clients of the more expensive suites are usually the biggest players in the world, a Bulgari official said, including European football stars, Russian oligarchs and American financiers.
Some of Bulgari’s properties have suffered from the pandemic like the rest of the travel industry. Reservations at the Bulgari Hotel in Bali, Indonesia, for example, took a big hit. Bulgari kept it open, however, because the labor was inexpensive and it kept staff from rusting, Mr Babin said.
Other Bulgari hotels fared better. The company’s hotel in Dubai, which is located on its own island, was full of wealthy people from the Gulf region seeking to escape much of the outside world, Babin said. In China, Bulgari hotels in Shanghai and Beijing have also done business with Chinese nationals who could no longer leave the country due to government travel rules, he said.
In the coming years, the company plans to open hotels in Rome, Moscow, Tokyo, Los Angeles and Miami. Bulgari aims to open 20 to 25 hotels, with 12 locations already secured, Mr Babin said.
He wants to open a hotel in New York, but says the brand has yet to find the right property.
“I don’t know yet what the ideal neighborhood would be,” Babin said. “In hospitality, you have to be in New York, but you have to be in New York in the right place to create a lasting wow effect.”
Write to Matthew Dalton at [email protected]
Copyright © 2021 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8