When you think about the most innovative and forward-thinking hotel brand, which company comes to mind? For me, it’s Virgin Hotels. Although the company has opened only a handful of properties, Richard Branson and the Virgin brand are known for thinking outside of the box. Doing things differently. Walking one way while everyone else walks the other.
So, for the debut episode of Lodging Luminaries, a twice-monthly podcast where I aim to speak with movers and shakers in hospitality – those in positions to create change and drive the industry forward – I wanted to get to know the people behind the Virgin Hotels brand. I called up Raul Leal, who launched the brand in 2010 and was tasked with bringing Branson’s pet project to life before stepping away from the CEO role earlier this year. Leal opened up about a number of interesting topics, including those first brainstorming meetings for the Virgin Hotels brand and how Virgin became an early adopter in areas of digital transformation and personalization.
Read some highlights from the interview below or listen to the full episode here.
Q: So Richard Branson was entering the hospitality space for the first time and asks you to lead the Virgin Hotels brand. What were some of those early planning meetings like? What challenges and opportunities did you see ahead?
Leal: I didn’t really know, honestly, how much progress they had made or not. And I assumed that they had some secret lab somewhere that they were working on all this stuff. We never really got into the nitty gritty.
So, I get to New York and I go, “OK, well let’s go see the product.” And now I have all the questions in the world. And they say, “What do you mean? What product?” And I say, “Well, where’s the stuff?” And they say, “We already showed it to you.” I said, “All I saw was the PowerPoint presentation,” and they say, “That’s all there is.”
I said, “Well, I think it’s going to take us longer to launch. There are so many things that we have to discuss, like our point of view on product, on the concept, on technology, on just the purpose of the organization.”
And so we started with sticky notes on the walls, all their ideas, and a lot of crazy stuff that we could never do, ever. The thought process was that no idea was a bad idea. We should look at everything. And that’s a great way to brainstorm – no judging, even with the wackiest of ideas. I had to keep an open mind, no matter how crazy the idea was.
What were some of those early concepts that you think really shaped the Virgin brand?
Leal: One was our point of view on technology, which was to keep it simple and to put the customer in control of the experience through their devices. Don’t try to do anything fancy in the rooms that the customer is going to have to learn.
Also, we wanted to do something different on the teammate side. In addition to crafting our consumer app, we also created an employee app, which is very much a big part of our culture today. It’s where all our training is done and where all our employees can find their information, their benefits. They can look at their 401k balance and whatever they want. We took the same approach with the teammates, which was to put them in control of their experience at Virgin Hotels.
Q: Hospitality is known as the industry that’s slow to adopt technology. It seems like we’ve been in a “digital transformation” for a decade now. Virgin was early on that, but do you see the rest of the industry finally catching up?
Leal: When we launched Desires Hotels in 2002, the premise was that we were one of the first hotel management companies for independent hotels that was using a CRM-based platform. So the “Desires” name alluded to the fact that you should be able to get your preferences met at these hotels.
So, we were really focused on preferences even way back then. I did carry that with me to Virgin, and then obviously we were able to accelerate that significantly. I think the industry has to move in that direction going forward. Are the points going to be sufficient enough to maintain loyalty in the future? I don’t think so.
As a matter of fact, I think it would be interesting to find out today, if all the points programs went away, who would be the top brand? That’s how you determine real loyalty. And I actually have an answer: I think it would be Four Seasons because they don’t have a points program and they’ve continued to remain relevant.
Q: Currently, the industry is having a tough time bringing back workers. What are some ways hotels can attract talent?
Leal: I think hotels should really just rethink their employee branding, just like they do the consumer branding.
In my prior life, when we used to take over hotels, I used to walk and the first thing I always did was walk into the employee cafeteria. As soon as we were going to take over a hotel or as I was touring the hotel, I wanted to understand the way people were being treated.
And, you know, it was funny. You’d walk into the employee cafeteria and there’s a massive bulletin board with all the OSHA compliance and other posters. And one of the posters was quite demeaning – the poster with the minimum wage was the biggest poster. So I used to think, “How are we going to attract people into the industry by saying we are paying you the minimum wage?” Meanwhile, we want you to know that, while you’re sitting down and eating and relaxing, it’s going to be awesome. We need to focus more on employee branding and make workplaces that are progressive and attractive to today’s digital employee.
Q: Why was it the right time to leave your CEO role at Virgin? And what’s next for you?
Leal: It was a great ride for me. I’m a hotel guy at heart, and most of us in the hotel business never get a chance to step outside the industry and do something different. In many ways, Virgin is not a hotel company. I learned so much from being with a company that’s outside the industry and is so beloved.
In my heart, I’m an entrepreneur and I’m a hotelier. So, there are some things on the agenda in the hotel business that I want to do. Right now, we need more leadership than ever in our business.