The big news is that an Indian real estate company, DLF has purchased Aman Resorts, the very high end resort operator for USD 250 million. The interesting part of the news is that this represents just a tiny portion (well under 1%) of the current market cap of the recently listed DLF. Ok, so that is headline. Now, for the analysis & context.
Adrian Zecha the founder & CEO of Aman has done this before. In the early 90s, Aman was sold to LA based Colony Capital and Zecha left the company. What followed demonstrated the power of the man behind the brand. Aman’s regular, very rich clientele decided that Aman without Zecha wasnt quite the thing they wanted and started to drift away. Soon, the money bosses had had enough. They sold the company to a HK group and Zecha was back running the business. So, will there be a replay this time?
DLF is a listed company and listed companies do not make great custodians of luxury brands. Sooner than later, operating managers & bean counters will bring ‘brand extensions’ and “marginal costing’ to the table and before you can say ‘cuban cigar’, the franchise will dip alarmingly. However, DLF is a bit different. It is a family-run business that happens to be overwhelmingly owned by the founding family, even after its listing. So, typical corporate sclerosis might not happen in this case, which is good news for the Aman brand.
There is another ‘longer view’ on the whole issue. In the next decade, the newly rich from India and China will gradually replace the western moneyed elite as the natural customers for such luxury brands in hospitality. Maybe, this is a good time for a new sensibility of uber-luxury in hospitality. In that sense, maybe Zecha’s time is over.
Click here to read my earlier post on Adrian Zecha & Aman.
Click here for all my posts on Luxury holidays.
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