LONDON—After more than four decades, Hard Rock International is bringing its passion for rock ‘n’ roll full circle in London, as the Orlando, Florida-based company announced last week it will open its first Hard Rock Hotel in England’s capital.
Hard Rock struck a chord with GLH Hotels, which owns and manages the 1,019-room Cumberland Hotel, to convert the Cumberland into a 900-room Hard Rock Hotel London that will debut in 2018.
Josh Littman, VP of development for Europe, the Middle East and Africa at Hard Rock International, said the project is a new milestone for the company in London.
“It is our first hotel property in London, where we were born 45 years ago, so we have always been looking,” Littman said. “Always London was at the top of the list. Our forward-looking strategy is centered on hotels. Hopefully it will be our flagship hotel, and it is a perfect location.”
Executives from both companies said the deal took about 30 months to get right. They believe it could lead to future partnerships.
“We knew it was a win-win from the very first day we talked with (Hard Rock International). We know something about owning and operating hotels, and they obviously have a passion for rock ‘n’ roll and how it seeps into everything,” said Colin Roy, GLH’s chief marketing officer who also is responsible for the firm’s brand development.
The courtship between the two companies took its time, Roy said, because GLH first needed to renegotiate the lease on the Cumberland. GLH is the largest owner-operator in London with more than 5,000 rooms, and its family of brands includes Clermont Hotels & Residences, Every Hotels, Amba Hotels, Thistle and Thistle Express.
Roy declined to comment on the length of Hard Rock International’s agreement on the Cumberland. In its own lease negotiations on the property, GLH added 46 years to the 30 years remaining on its current lease.
The hotel is located at the corner of Oxford Street and Park Lane, near Marble Arch and Hyde Park in prime real estate, Roy said, who added the project “will help revitalize that end of London.”
“We had to first renegotiate the lease, then start talking with Hard Rock, and we wished to continue management,” Roy said. “That big brands command premiums is not a fair way of doing things.”
Rock ‘n’ roll is here to stay
The Cumberland will adopt Hard Rock International’s brand standards, Roy said, but there are still parts of the property remaining outside the deal.
“There are very few properties in London that have prime location and the full envelope on offer,” he said. “Hard Rock allows us to use the whole hotel. It will have all the elements, a Hard Rock Cafe, a shop, and they will move into the rooms by the end of this year. Renovations will occur floor by floor, but the top floor is the size of most London hotels. The hotel will remain open during the process.”
Roy added the hotel’s four basement floors are still unaccounted for in the deal.
“We hope this deal is not a one-off,” Roy said. “We’re building our relationship now, getting to know one another.”
Littman said he is happy GLH will continue to manage the property.
“This hotel will not just be a flag across the door,” Littman said. “In the past, we had a lot of franchises, but in the last two decades we’ve been beefing up our infrastructure, and the bulk is now managed, but (GLH) felt strongly about managing it, and we knew they knew the market better than anyone else.”
Littman said Hard Rock was “flexible” in striking the deal with GLH.
“Yes, we prefer to manage or franchise, but we’re pro-deal,” he said. “Hard Rock is not a plug-and-play model per se. The (London) deal is almost management-light. There was lots of hand holding. We have to execute the brand, and it bodes well with the right partners.”
Yael Coifman, founding partner of Leisure Development Partners—a consultancy specializing in the leisure and entertainment sector of the hospitality industry—said the deal should benefit both companies.
“London is an incredibly dynamic market but also home to Hard Rock, and you cannot discount that,” Coifman said. “Tourists come here all year round to go to the original Hard Rock Cafe. Hard Rock is a brand that is world-class strong, and this hotel makes every sense in terms of reinforcing that brand.
“The hotel will add a lot to London’s hotel market. Yes, London has the Ritz, the Dorchester, the hotels everyone recognizes, and it has excellent, smaller boutique hotels, but this type of hotel is something it does not have.”
Wider plans for both
Both companies have robust pipelines.
Every, GLH’s select-service brand, launched in February 2015 in London and will get a second property in the city later this summer. Roy also said the Amba brand is performing well.
“We’ve refurbished 1,200 keys across three hotels in last 18 months. We feel we are good at doing conversions in existing businesses, so we are not worrying about the conversion of Cumberland,” Roy said.
He said the way forward for GLH is clear.
“We are willing to own and operate, have skin in the game, invest and hang the flag, and then we can talk about management contracts and how to expand the brands,” Roy said.
Littman said Hard Rock International’s sights also are fixed on Europe.
“We signed Hard Rock Hotels in Berlin, at a site at Checkpoint Charlie, last year, and there are a number of deals we’re working on, in such places as Madrid, Barcelona, Prague, the Costa del Sol and Paris, although the barriers to entry in Paris are very high,” Littman said. “We have signed Budapest, and Tenerife and Dubai are opening this year.”
Littman said the company’s goal is to have a solid mix of resort and urban city hotels in major markets.
“Generally we do not want more than one hotel in each market, so location is vital,” he said. “Our recent openings and deals show how serious we are, that we are a solid, credible, successful story for owners and perspective owners. People are coming to us. We’ve raised a lot of eyebrows. We’re strengthening our leverage and have strong PR power.”