Lucia Penrod, co-founder, owner and chief executive officer, Nikki Beach Global (Nikki Beach), and Robert Walters, CIO, Global Asset Solutions, discuss the evolution underway at Nikki Beach as the trusted brand navigates expansion.
My husband, Jack, and I have been in the hospitality industry for many years, but the origins of this business date back to the 1980s, when we were asked to help revive the Miami Beach area, which was overwhelmed with crime. We opened Penrod’s Beach Club at One Ocean Drive in 1989, and it soon became very popular.
In 1997, my husband’s daughter, Nicole, was killed in a car accident, at the age of 18. At that moment, we decided that instead of mourning her death, we were going to celebrate her life. We took out the property’s pool, and Jack planted trees to create a garden by the sea, filled with lights and candles. We named it Café Nikki.
We didn’t plan to create a business around it; it was something done as a family to help us cope with our grieving. But one day we were approached by a couple of surfers who wanted to host a party there, beginning what has become an incredible journey.
Every celebrity in town was coming to Café Nikki — Harrison Ford, Cameron Diaz, Al Pacino, Madonna — and they just fell in love with the space. We decided to expand onto the sand, and in 1998 we officially opened the first Nikki Beach.
Because our muse is Nicole, everything that we do is with her in mind. We want women to feel comfortable and safe at our properties, and so our design is very free-flowing and feminine; our DJs don’t play aggressive music; you visit us and there are groups of women, couples, friends and families having a great time.
We cater to a crowd which can travel anywhere, so rather than compete, we have created something totally fresh. When you come to us, you feel like you’re coming home, with the best service, with the highest-quality food and drinks. With us, you can party during the day, no more late nights in stuffy clubs. You listen to the music you loved when you were young and irresponsible, and you wake up the next day refreshed.
We have always believed in listening — really listening — to what the customers want, and they were telling us that they felt like they were in the south of France. At that time, in the U.S., there was no such thing as lunch on the beach, no such thing as champagne on the sand. We decided to travel to Saint-Tropez, to the cradle of the beach club business, and when we were there, we found an incredible location to purchase. We opened in 2002 in Saint-Tropez, France, then in Saint Barth in the Caribbean and Marbella in Spain, and now we have 11 beach clubs and five hotels.
We have never sought to create a big brand, but after a few years of organic growth we could see the opportunity. It was then, as we thought about our values, that we took a conscious decision to put the celebration of life at the center of everything we do. From how we treat our guests, to how we work as a global team, it's all to create a legacy.
We are now working with Global Asset Solutions as we continue to grow the hotel business, to translate our precious brand without losing that vision.
Robert Walters, chief investment officer at Global Asset Solutions, adds:
“With memories of days spent at Nikki Beach in the past, we were aware of the brand’s strong reputation through its beach clubs and burgeoning hotel business with tremendous potential, though growing quite slowly. Lucia approached us to begin working with her team to reinforce the strategy for their hotel division to ensure that it is a fantastic, owner-friendly operating platform, which will appeal to developers and investors who are looking for something special.
“Why is Nikki Beach an interesting hotel brand? It offers so much to the guests that they won't find elsewhere; an experience that is genuine and heartfelt from all the staff that they encounter. It offers an exceptional food-and-beverage experience, which contributes 45% to 50% to total revenue, whilst also challenging the market in terms of ADR, creating a highly profitable business.
“The brand is able to compete with upper-luxury hotel flags and our asset-management experience in that segment meant that we quickly saw its potential. There is a huge and growing appetite for lifestyle luxury, and Nikki Beach stands out.
“We believe the market wants that focus on the guest experience, combined with a strong room product in a luxury setting, and so the plan going forward is to build on the success of the existing properties in terms of rate and reputation by supporting the future growth of the brand.
“We are looking at key European, Asian and American markets and we are developing a new concept which will enable the brand to take on smaller projects, in a rather more adaptable way, i.e. without the need to occupy a large resort site.
“We’re not taking a big tilt in one direction or another, this is a natural evolution of the brand, to retain the inherent strengths that are there, with a focus on key locations. For the next generation of Nikki Beach hotels and beach clubs, we’re at the start of something quite exciting for the business. For example, whilst existing hotels such as the property in Dubai provide one vision of a luxury resort experience, we are working on new concepts which will enable the business to adapt to very different locations and opportunities.
“Everyone at Nikki Beach, all the team members in the properties, the waiting staff, the bar staff, everyone through to the management are imbued with a sense of what the brand represents, and Lucia and her team bring a creative flair that succeeds in also guarding the legacy so jealously, you realize it’s something quite special.
“Too many businesses today are called brands, but the word ‘brand’ doesn’t capture what Nikki Beach is about. It’s a lifestyle in a world of lifestyle brands. And it’s contagious.”
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