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Jun
2015

The experts eye: When an iconic brand from the west mutates in the east

As might be expected the staff of Luxury Insights China are out experiencing what the market has to offer on a regular basis so that they can do their job effectively. Our team visits malls, events, conferences and of course hotels, both to observe what is going on in them, and to actually stay overnight and experience the facilities and service on offer. Doing these things at our own cost means that we look at the experience as a consumer might, all be it, a very knowledgable one, aiming to be as objective as possible.

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A few weeks ago I took a weekend trip to Suzhou, a city close to Shanghai with the intention of getting some air and a change of scenery. On a previous day trip, I had been to look at the recently opened Lamborghini Hotel purely because I was interested to see what it looked like. The exterior was simple and well presented, and the lobby area clean and modern with a single long low set check-in, checkout and concierge desk that ran the length of the room. Behind the desk one could see the water feature and a well-tended garden.

Moving further into the building, there was an airy atrium in which old black and white photographs of famous Italian film stars and celebrities were hung. Off this was the library, and a wine room, and further back a French restaurant and access to the guest rooms. The quality of the finishing at first sight looked good, although the use of dark wood on the walls and furniture did make things a little gloomy for my liking. First impressions were reasonable, but few guests and minimal staff created a rather empty feeling. It was late afternoon, so I assumed that most guests would be out enjoying Suzhou, hence the ambience.

The Tonino Lamborghini brand is operated in China by a local management company that plans to open many tens of hotels across the country over the coming few years. Its positioning differs from that of the hotels in Italy, as there is a fusion of Italian and Chinese styles within the hotel. Like many international brands, the huge China opportunity presents a chance to monetise the brand name and status by working with a partner willing to invest the large amounts of capital necessary for success. The potential risk is that the brand DNA changes shape once here and looses some of its core values.

First impressions count

Having decided to spend the weekend in Suzhou, I needed to select a hotel. My first inclination was the Lamborghini Boutique Hotel that I had briefly visited some months earlier. It’s on the banks of a lake, and it appeared to have the sort of character I might like, so I made a booking. On arrival, the staff helped take the bags from the car to the lobby, and I was presented some very nice tea to drink whilst the check-in formalities were completed, all as might be expected.

As I experienced on my first exploratory visit to the hotel, the lobby was empty and on the walk towards my room, the atmosphere felt cold and soulless. Entering the corridor leading to the guest rooms, it was hard to miss the carpet into which was woven the lyrics to a Beatles classic ‘Love, Love, Love’, somewhat at odds with the brands Italian roots? The room continued the dark wood them both on the walls and floors, broken up in places by the Lamborghini logo and the use of red in a minimal way.

By this time and although everything was clean and new, I was feeling that the promise of Lamborghini quirkiness, the lines and extremes that are often found in their supercars and within my perception and expectation of the brand were missing, had hit me hard. Yes the logo was still present in various forms around the room so that I was reminded of the name, but the materials, colours and design of the interior whispered Lamborghini and didn’t scream it.

I have not stayed in a Lamborghini hotel in Italy, and have only seen images, yet their styling is clean and simple, the use of red is obvious, and it looks if only in a picture, to be following the brand DNA. I wasn’t getting this in Suzhou.

After getting over some initial disappointment, I decided to use the pool before lunch however I was told that it did not open until 2pm? I then said I would use the gym, which was also closed, but a call a few minutes later reversed this message and informed me that it was now open. Perhaps I was just unlucky, and today was not typical for the hotel, I’d certainly like to think so.

Delivering on a promise

It is quite possible that my experience as a Chinese customer and relative disappointment are of little importance here, and for those with less international experience, a Lamborghini hotel may deliver all they expected, which of course is good. But there are two points to be made here, the first being that Chinese luxury consumers are becoming knowledgable and more selective when it comes to luxury brands, and now have higher all round expectations of them and how they should interact. To assume that the name is enough to satisfy the guest is not necessarily a wise thing, because consumers will see through it if it is not supported by tangible evidence.
After the status and position of a brand has been established in the eyes of the consumer in China this cannot easily be changed. So if Lamborghini, or any other brand whose core business is not hospitality, enters into this sector as some have or are planning to do, they need to consider how it may affect the perception of their brand, and how they avoid the brand values they have spent so long establishing from being damaged. This may sound like a very obvious statement, but there has to be a big temptation amongst many global brands, to find as many ways possible to monitise their name in a country like China, especially at a time when the market here has slowed down and demand is high for income contribution.

Avoiding the pain to make a gain

Over the next five years, we can expect to see more brands like Lamborghini enter the hospitality sector in China, and extend their connection to an audience far broader than those within their core sector. Many of those who visit and stay in a branded hotel of this type, may never be owners of the core product produced by the brand, yet they will remember the name of the hotel and their experience, and associate this with any further conversations with their circle or in their own purchase decisions. The potential income levels in China from this activity could potentially cloud wise long-term decisions for executives within the brands who purely see a way to increase their numbers from the territory. They are being offered a great deal by a Chinese investor who only see’s the brand name as a quick route to money, and has little or no attachment to the brand.

Clearly there is an opportunity for luxury brands in cars, clothing and possibly many other sectors to extend into hospitality, but this is not their core, so they have to find a partner both to invest and operate the facilities. At this point they hand over something they have spent many years building to others, and they really should be sure that they will treat it with appropriate sensitivity and respect.


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