Sir Richard Branson has been putting posh heads in posh beds at 39,000 feet for years. Now he wants to do it on the ground – starting in Chicago
Does he know, I wonder, how many brands he has launched? Sir Richard Branson, the Virgin founder, pauses. He doesn't. 'Quite a few,' he says after a long silence. 'But what I do know,' he adds hastily, 'is that we have created ten $1 billion businesses from scratch.'
That would be enough for most billionaires, especially those who are one year off pensionable age in Britain. But Branson wants to add an eleventh to his stable, best known for Virgin Atlantic and his other airlines Virgin America and Virgin Australia, as well as his Virgin Money, Virgin Active, Virgin Mobile and Virgin Holidays – a Virgin hotel chain.
Over the years, Branson, 64, has put together a small collection of resorts, including his own ’39,000-a-night Necker Island in the Caribbean, under the Virgin Limited Edition brand, but he has not opened anywhere for ordinary leisure or business travellers. Until now. Virgin Hotels, a new company based in America, has just opened its first property in Chicago. Hotels in Nashville and New York are slated to open in 2016 and 2017, while San Francisco, London, Dallas, Los Angeles, New Orleans, Miami and other US markets are in the pipeline.
Branson has been putting people to bed at 39,000ft on Virgin Atlantic for 31 years. What took him so long to do it on the ground? 'We've launched a lot of other travel and hospitality brands over the past 50 years, so it's a good question,' he says, fresh from a briny early-morning dip in the Caribbean off Necker, where he is holidaying with his family.
'We have talked about it. But it has not been until Virgin America and Virgin Australia started flying to so many major cities, to add to, of course, Virgin Atlantic, that we thought, “Let's see if we can create a hotel brand that enhances the image of Virgin and appeals to those who travel on Virgin airlines.”'
Branson and his team started looking for sites in 2011 in the depth of the recession, because they knew the prices would be right. They were – or at least they would have been had the banks not decided to hold on to properties until the market rebounded. As a result, it has taken longer than Branson had hoped to get the hotels business off the ground. In that time, some of his hotel tricks have already been introduced by others.
Ian Schrager, the man who invented the hip hotel with the Royalton and the Delano, has launched PUBLIC, also in Chicago, which will be the first of a new 'essential service' hotel chain. Think great design, with many services free and overall prices kept low by the removal of things few people use or appreciate, notably expensive 24-hour room service, bell boys and doormen.
Branson's hotel pitch is similar. 'Lots of the big chains nickel 'n' dime you by charging for wifi, for late check-out, for cancellation, for business centre services… you name it. Why would I do that and piss off my guests so that they will not come back? I want to give them the services they need and not trouble their wallets too much.'
Check in to a Virgin hotel and you will find minibar snacks and drinks at high street prices. There's no room service delivery charge, which means an omelette, orange juice and coffee in Chicago is around ’14. Definitely worth staying in bed for. Virgin loyalists qualify for nifty perks: Virgin Atlantic gold card holders get free breakfast and free room upgrades if a better room is available. Silver card holders get free upgrades. There are also pleasing new services. A Tesla electric car – red, of course –will shuttle you around town, if you ask nicely.
Where Branson hopes to put one over Schrager is by adding 'Virgin-ness'. He doesn't mean the Virgin wall of fame, decorated with pictures of himself signing up the Rolling Stones to Virgin Records, launching his airlines or ballooning around the world, although that helps. He means by adding a little sex, rock 'n' roll and good old-fashioned 'Briddish' eccentricity.
His soon-to-be-patented lounge bed, which comes with super-soft leather headboard and a leather chair on one corner, is designed, he insists, to help people to work in bed. But he really knows that most will use it to do other things more adventurously. The same goes for the giant leather pouffes in each room. The soft-carpeted lounge suite in the Commons Club – a private members-style club on the first floor that is, in fact, open to all – is called 'the shag room'.
There is real rock 'n' roll in the two upstairs bars. One, with a stage for live bands, is hidden away speakeasy-style. Find it if you can. The other is 4,000 sq ft and has 360’ views of the most handsome city in North America. It comes with its own house DJ. As for British humour, the bar has old-fashioned country house-style stags' heads on the wall, except these stags' heads are made of jaunty, psychedelic crochet and have baby doll eyelashes. Pick up a breakfast menu and you'll find home-made crumpets and porridge that is called porridge, not oatmeal. The valet parking fella sits in a red London phone box.
With so much Britishness, I wonder why Branson has chosen to open in the Midwest, not London's West End. 'We know how discerning the British are, so we thought we'd practise on the Americans first,' he laughs.
Virgin Hotels is majority owned by Branson. He has two investors: entrepreneur Alberto Beeck and hospitality and real estate fella Diego Lowenstein. They and other third-party investors will buy or lease properties and Virgin Hotels will run them in return for a management fee and a fee for the right to use the Virgin name. Over the next decade, Virgin Hotels will invest 'several hundred million dollars' to open twenty properties, mainly in the US and UK. If all twenty 'work a treat', as Branson predicts, he will look towards Asia. 'We've had a lot of interest from China and the Far East,' he says.
The launch of Virgin Hotels marks a welcome break for Branson after a rough year. Sure, he has floated Virgin Money and Virgin America but he has also been forced to axe his UK short-haul feeder airline for Virgin Atlantic, Little Red. He has ditched Virgin Atlantic routes, notably London to Japan, in order to get the airline, 49 per cent of which was recently bought by the US giant Delta, back in the black. He also suffered a grave setback in his effort to conquer space tourism when a prototype Virgin Galactic space craft crashed in November, killing one of the test pilots.
He concedes that it is upsetting for staff when Virgin Atlantic closes routes — he has also cut services from London to Vancouver, Mumbai and Cape Town — but says: 'Nothing lasts forever. We've been flying for 31 years. We've constantly reinvented ourselves to stay ahead of the curve. Part of that process means facing financial facts. We have a small number of slots at Heathrow and if one is losing money and another can make money, we'd be mad not to close the loss-making one and open a new, profitable one. Trees die and new saplings grow.'
While Virgin Atlantic routes heading east and south have been scrapped, he points out that new services are being added, for instance from both London and Manchester to Atlanta, Delta's global hub, and from London to Detroit. There are also more services to existing destinations, notably Miami and San Francisco. 'The Delta deal does mean we will tilt more towards America,' he says. 'Overall, we will end up employing more people and being more profitable and surviving another 30 years. We are profitable this year and should be very profitable next year.'
He adds that the airline has just launched its first Boeing 787 Dreamliners with all-new cabins. 'We are also about to introduce yet another upper class seat in our planes when everyone thinks we already have the best upper class seat.'
In spite of the Virgin Galactic tragedy, he insists his commitment to space tourism is 'absolute and undiminished. We continue to be excited by the challenge of space — and make no mistake, it is a huge challenge. Everybody who works for Virgin Galactic, all those people who want to fly on Virgin Galactic and the vast majority of the public support us getting the job finished. We're pushing on. People are working day and night to get back on track. There is a lot going to be happening.' Who knows, one day there might be a Virgin Hotel in space. Until then, we'll have to make do with the Windy City.
Virgin Hotels Chicago, 203 N Wabash Avenue, Chicago, Illinois 6060. Rooms from $209, rising to $1,200 a night for a penthouse suite
virginhotels.com +1 312 940 4300
British Airways flies twice daily from London to Chicago. Economy returns from ’508. Virgin Atlantic flies daily from London to Chicago from April to October. Economy returns from ’632. Upper Class from ’2,410.66
John Arlidge writes for the Sunday Times in London and Cond’ Nast in New York