AIC Growing and Diversifying With New Products in the Pipeline

As Nobu Hotel Los Cabos officially opened this week following the opening two weeks ago of Hard Rock Hotel Los Cabos nearby, we sat down with Frank Maduro, vice president of marketing for AIC Hotel Group, to talk about that company’s relationship with the new Nobu property and how AIC is working with agents to match the property to their clients.

A.I.C. owns the Nobu Hotel Los Cabos as well as the new Hard Rock property and also seven other resort properties in popular vacation destinations. Soon a new Nobu property will open in Chicago, bringing AIC’s owned properties to a total of ten.

TravelPulse (TP): Please describe how Nobu became a trusted and solid partner? What was the role the company played with the Nobu brand of hospitality through that process?

Frank Maduro (FM): We were looking for a partner in our Miami Beach hotel, which was the Eden Roc, and it all stemmed from moving the Nobu restaurant into the Eden Roc Hotel. Once that deal was signed and we saw the quality—and we've always known the Nobu restaurant quality—we began talking to them about the hospitality side because the property needed a differentiator in Miami Beach as the destination has a ton of very, very good quality, high-end hotels.

We needed a brand to help us with that property. So we converted half pf the hotel into Nobu Hotel Miami Beach and the other half of the stayed as Eden Rock Miami Beach. It was a hotel within a hotel concept like you see in Las Vegas. It all just worked out, due to the good relationships we had with Nobu and Hard Rock Hotels. We needed a differentiator and that came with the quality of the Nobu hospitality experience and the dining experience.

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TP: How has the “hotel within a hotel” concept working for that property?

FM: It works fine. It's two towers, so two completely separate towers. We have two separate check-in areas. There is a private Nobu pool and then they have a common pool. So they do have very segregated areas and unique experiences on that side which works well in that facility.

But that was an opportunistic model because the hotel is very large. It has 650 rooms, so we put 200 rooms as Nobu and nothing was interrupted. All our other hotels are or are going to be stand-alone brands. It's a model that tends to work only you have a massive complex.

TP: Nobu Chicago—when will it open? Does that urban area present a departure for you and the brands you have been marketing?

FM: The Chicago hotel is a brand new building, brand new build. It's still being finished. Some of the other properties we have are conversions. So we do both. The role that AIC is playing with the Nobu brand throughout the hospitality evolution is to work closely with them in developing their standards to hospitality as some of their hotels are city hotels.

Chicago will open in the first quarter of next year, probably the end of March, beginning of April. But it is will be purely a city hotel, and that is a departure for us, 100 percent. But we felt that the location, the city, provides an opportunity to diversify our portfolio. It’s in the heart of Chicago in an up and coming neighborhood that is seeing lots of tech corporations move in, including Google. It will, of course, have a Nobu restaurant as an anchor. And, we'll have a noble rooftop bar. It will be a boutique, though—only 100 rooms.

TP: What market is Nobu hospitality targeting as a feature in your portfolio of properties and how does the direction differ from other markets?

FM: It's been a challenge in that our Nobu portfolio is very diverse and different. Somebody who's going to this Los Cabos property, or to a beach resort, is very different than somebody who's a transient guest in Chicago—and the feeder markets are very different.

The Midwest, Chicago, is predominantly business travel during the week. Weekend people come into the city to enjoy festivals or events and that demographic is very different than somebody in California looking for four- or five-night getaway to Los Cabos. They all share similar traits in that they are affluent and have plenty of disposable income. They are professionals, and they share some of the other traits of clients in the rest of our portfolio. Still, it's a very different clientele than from other properties, and it skews a little bit younger and hipper, believe it not.

Nobu is not a mass tourism product, yet rooms need to be filled and at a high price point. The expectation of, uh, of this type of clientele is very high. When you pay the type of prices that you're going to pay in Los Cabos for a product like this, you have to deliver or people are not going to trust you. The great thing about Mexico is that the infrastructure, not only from a physical perspective but manpower perspective, is second to none. The hospitality industry thrives there because the mindset and culture is to be very serviceable. The staff is very professional and it helps deliver this type of product.

TP: Your company has specialized in all-inclusive concepts. How does that fit into the Nobu profile?

This property specifically has proved a little more challenging in that most in that respect compared to selling all-inclusive properties in the Caribbean or in Mexico. So when it comes to a product providing a European Plan for F&B, we're finding that, although Nobu is not all-inclusive, agents can break the mindset and sell it. It’s a completely different concept from a brand perspective because the Hardrock brand and the Nobu brand are completely different, with different experiences and different clientele.

And remember, some people don't want the all-inclusive option. Some people prefer to come to the hotel, sleep, go outside and eat at a restaurant, explore, do different things. So it's just a different type of clientele. We tried the all-inclusive concept in the Nobu Miami Beach, believe it or not, and it was hugely successful, but operationally it was very challenging due to labor costs. There are other hotels guests can go to for an all-inclusive experience. But it won’t be Nobu and we are going to continue down this path.

TP: Please describe your travel agent programs and how agents can profit from selling Nobu properties and others in your collection.

KM: What agents need to know is that this is a place for luxury clients mostly. Travel agents have been integral to the success of our company. We've been around for over 30 years, mostly in the all-inclusive space, and that can be expensive and may require a lot of handholding for clients. So travel agents do the best job at that. I mean, 80 percent of our business still comes from travel agents and that’s massive.

We just had, two weeks ago, our annual awards function for travel agents at the new Hard Rock property that opened in Los Cabos. Some 150 travel agents come down, experienced the grand opening of the hotel, and were also recognized for their achievements. So it's a constant. We are always evolving and developing our agent programs with more training and tools. These are AMP and an override program and they have been in the works for a decade or more.

An additional big advantage is that our sales force is empowered to make decisions on behalf of agents. This is one of the key challenges the industry and sales professionals are allowed to resolve issues on the spot.

Also, we have a pretty strict policy regarding price parity where other competitors have different prices depending on the channel. We don't play that game. Anytime that we see rate disparity, we address it. And if it's not corrected, the channels turned off. And trust me, that has happened.

So we have Amped Amplified Rewards, which is an override program. And we also have a dedicated website for agents where they can access a number of resources and tools. It's a secure site.