Pictured: Sir Richard Branson pushes forward with Virgin Hotels, which has yet to open a hotel, but once intended to develop and operate up to 25 properties by 2017.
Chicago – Almost four years ago, Sir 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 it into the Virgin Hotel Chicago by the fall of 2013, the first Virgin property for the hotel group that launched in 2010. Now June 2014, it hasn’t materialized, as of yet.
At the time of the announcement, Hotel Management spoke to then 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. Late last month came word that Virgin was eyeing a Silicon Valley location near the likes of Google. This news was on the heels of an announced Nashville, Tenn., project, coupled with last June’s news of a new-build Virgin hotel in New York at 29th Street and Broadway.
All of this is coming out in the shadow of a recent Wall Street Journal article that portrayed Virgin’s wan evolution. While the brand oozes cachet and a pedigree—albeit in other industries—Virgin Hotels still hasn’t opened a single property, and has had to deal with the departure of two top executives (one being Marino).
One of the reasons for the torpid rollout, as WSJ points out: Its plan to acquire distinct properties in North America cheaply during the property downturn didn’t pan out, as banks that held distressed 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.”