Almost four years ago, Richard Branson's Virgin Hotels introduced itself to the world when it acquired the Old Dearborn Bank Building in downtown Chicago with plans to convert the former bank to the Virgin Hotel Chicago by the fall of 2013. Now May 2014, it hasn't materialized, as of yet.
At the time of the announcement, Hotel Management spoke to then managing partner, leisure and hospitality, of Virgin Group and head of Virgin Hotels, Anthony Marino, who has since left the company without seeing the Chicago project come to fruition. His words at the time, while hopeful, were not, in fact, prescient. "This is the first [hotel] we're announcing," he said of Chicago, "but we may open others before this property opens. It probably won't open until the fall of 2013, and there's a very good possibility we could open in another market sooner."
Hasn't happened, yet Virgin continues to announce new properties. Just today there is news that it is eyeing a Silicon Valley location near the likes of Google.
Last week, Mountain View city council members discussed the possibility of leasing two downtown parking lots to the hotel chain, reports say. “Our hopes are to build, as part of a new parking structure, a Virgin Hotel that would help finance the new parking garage on existing lots,” project architect Bill Maston said.
And, just last month, Virgin said its third U.S. property would be in Nashville, Tenn.
All of this is coming out in the shadow of a recent Wall Street Journal article that portrayed Virgin's wan movement. While the brandoozes cachet and pedigree, Virgin Hotels still hasn't opened a single property, and has had to deal with the departure of two top executives (one being Marino), the Journal wrote.
One of the reasons for the torpid rollout, the Journal contends: "Its plan to acquire distinct properties in North America cheaply during the property downturn didn't pan out, as banks that held distressed real-estate assets chose to hold on to them."
As a result, Virgin pivoted to securing management contracts, "but found that many hotel owners were hesitant to commit to a startup company with no track record of operating property," the Journal wrote. A name only goes so far.
Said hotel and real estate luminary, Laurence Geller, the founder of REIT Strategic Hotels & Resorts, "Lenders and equity investors are less enamored with sexiness. They are more enamored with large brands and their big distribution systems."