News of faculty

08 Apr 2013

Five views on luxury perception

One of the highlights of the recently held Moscow based Luxury Hits business program conducted in association with the RMA business school was a presentation by vice president of one of the largest international companies specializing in hotel architectural design and investment Arno Schwalie.

«Design Hotels was founded in 1993. We have started out as a consulting firm in the hospitality industry. Mostly we are playing a middle man role between the designers of the hotels with developers and hotel operators that might be interested in investing into a profitable venture. We offer the selected projects to our partners in the hospitality business, as well as offer consultations to them along the various stages of the project realization. Our annual investment is currently around 200 million, and the number of hotels that have been created under our management has now reached 250.

What I really would like to discuss is the subject of the perception of luxury by different people, and the variety of preferences that are being channeled through the markets and in turn shape the existing demand. Recently we have published a report in which we have identifies 5 specific groups of luxury, or perhaps 5 definitions of luxury. I'm not going to go into the detailed description of each one of them, but I will point out that there is a significant range of perception between these different groups of what constitutes a luxurious traveling, lodging and a luxury hotel. But the essential difference between these groups shows in how much one end of the spectrum values the aspect of brand recognition as opposed to the raw simplicity of alternatives, which can be at time rather expensive as well. With some groups strongly preferring the fresh new emotions and impressions over the recognizable brand names.

Now after I've visited Russia, I have come to realize that the local hotel market if far from being filled. Some would estimate that a tenfold increase in the number of hotels would be in order to accommodate the demand based on the city of this size. In practical terms the hotel design doesn't really exist as a separate architectural industry. Considering that Moscow is one of the largest financial business centers as well as being a tourist attraction, it is safe to say that the demand for new hotels and hotel design will remain steady and continue to grow. And we would be very interested in participating in this market. What exactly is needed for that? Mostly we just need the expression of interest to this cooperation from our Russian partners.…»

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