Richard Branson: Why Now’s the Best Time to Launch Virgin Hotels

Virgin Group founder Richard Branson traveled to Chicago last week to take another look at his brand new baby: the very first Virgin Hotel now open to the public. Located in a 1920s Art Deco landmark building, the hotel has 250 guest rooms and a restaurant club lounge. Equipped with free Wi-Fi and electrical outlets galore, the Virgin Hotel encourages a type of work-life balance in which business travelers can be productive while sipping on cocktails and listening to live music. 

“You only live once–you might as well work from a nice environment like this and get inspired,” Branson tells Inc. “I typically hate meeting rooms, but having meetings here I didn’t feel it was a chore.”

The Chicago property was designed by Rockwell Group Europe, which was guided by Virgin’s in-house design team to integrate Virgin’s playful aesthetic while restoring the building’s key features like the brass elevator doors and marble flooring. Expected in the coming months are a 23-hour diner, two penthouse suites, a combination coffee shop and wine bar, and a rooftop terrace. 

“The thinking behind the hotel was to create the kind that was competitive to something like the Soho House, but without making it completely elite in charging high membership costs and excluding local people from being able to drop in,” Branson says.

Most rooms consist of a sleeping chamber and a bathroom chamber, separated by a sliding door. The suites have a living area. According to Virgin’s research, business travelers now spend more time working on their hotel bed than on a desk, so the Virgin team created a proprietary bed design to accommodate working in bed. The chambers also include large vanity mirrors and a street-priced minibar that is a mix of Trader Joe’s and corner bodega.

“That’s a very Virgin thing to do, to offer something above what people would expect but not charge them through the nose for it,” Branson says. “We don’t listen to the accountants.”

The Virgin Hotel in Chicago is just the first in a line of new hotels, including forthcoming properties launching in Nashville in 2016 and New York City in 2017. Like the Four Seasons, these properties will all be individually designed to suit the specific feel and interests of each city. In Nashville, for example, the hotel will have its own recording studio.

After Coca-Cola managed to drive Virgin Cola out of business, Branson swore to never again go into competition against a “Goliath” unless he could offer a distinctly superior product. The Virgin Group’s long-term investment into Virgin Hotels underscores a certain confidence that it can offer a more affordable yet equally cozy hotel experience.

“The Virgin brand now is pretty well established in America, and we find that when we launch a new product people will give us a shot and check it out,” Branson says. “If we get the design right and all the bells and whistles right, they’ll stick with us.”

According to Branson, Virgin has been trying to get into hospitality for some time. In 2007 during the financial crisis, the company initially began scouting sites for this project, but prime real estate was not placed on the market because owners were paying very low interest rates at that time. The Virgin Hotels project was resparked in 2011, when the Chicago property was first announced.  

Since then, the hospitality industry has met the sharing economy and welcomed a brash new guest: Airbnb. In the past few years, Airbnb has hired a director of hospitality and even created its own travel magazine to emulate the hotel experience. Branson, however, believes that business travelers using Airbnb could miss out on some offline social aspects.

“Having face-to-face contact inside someplace like the Commons Club [Virgin Hotel’s restaurant lounge] makes business meetings that much more social than checking inside someone’s flat,” Branson says. “Hats off to Airbnb, but there’s definitely still room for the right kind of hotel.”

As of now, it’s uncertain to what extent Virgin Hotels will be incorporated into cross-promotional efforts with other Virgin brands, but Branson did mention that having a hotel in Chicago made sense because Virgin America and Virgin Atlantic both fly into O’Hare International Airport. 

With the expansion of Virgin Hotels happening quickly and like clockwork, Branson hopes to eventually have at least a handful of properties in the U.S., as well as internationally. And as for Virgin Hotels’ intergalactic expansion plans, “one day we’re going to have a hotel in space, I promise you,” Branson says.