Does luxury have a nationality? The Orient-Express company would seem to think so. Even though the Tatas are the largest shareholders in the trains-to- hotels-to-restaurants company, Orient-Express has reacted to the prospect of a total Tata takeover with horror.
The problem, said Orient-Express in a letter to the Tatas, is that its customers do not associate an Indian company with luxury. So, a full-fledged Tata takeover would cause Orient-Express to lose its deluxe edge.
Anybody familiar with the Orient-Express brand will have suppressed a chuckle when they read about this latest example of the company’s foolish arrogance. Orient-Express is not a great European company whose founders sipped vintage champagne with Louis XIV. Rather, it is a more recent conglomerate, constructed by an American tycoon who made his money from the kind of containers you use to carry cargo on ships.
Its chief claim to fame was the revival of the old Venice-Simplon train (the Orient Express) and it followed this up with the purchase of stakes in established European luxury properties. For instance, it bought into Cipriani hotels but relations between the Ciprianis (who are an old Italian family) and Orient Express have been strained over the use of brand names associated with the Cipriani heritage. Similarly, it quarreled with Mark Birley (who died a few months ago, after which his daughter sold the empire), the former owner of such legendary London clubs as Annabel’s, over their partnership in London’s Harry’s Bar (Orient-Express claims to own the name because of its investment in the Cipriani franchise). Birley and his family believed that luxury required a high level of service while the Orie nt-Express management, American in spirit, demanded management school-style cost-cutting and portion-control. Even in America, its chief claim to fame is the once fashionable 21 Club, a former speakeasy that fed New York’s great and good till a couple of decades ago. It may be unkind to say so but the great and good have largely stopped going to 21 since Orient-Express took over.
Claim to fame: The Orient-Express company’s big achievement was the revival of this train.
So when Orient-Express, its heritage consisting largely of containers piled up on the docks of various ports and its registration filed in a Bahamas tax haven, decides to get sniffy about the Tatas, India’s most respected group and owners of one of the world’s grandest hotels, it’s hard not to laugh.
Clearly national snobbery is the last refuge of the parvenu.
But leaving aside Orient Express and its colourful sea container history, there is a serious issue underlying this dud controversy. Do we judge luxury brands on the basis of their owners’ passports?
I would argue that we do not. Many of the world’s greatest brands are now owned by non-Europeans. In England, many Savile Row tailors have non-English owners (Gieves and Hawkes, for example). Nobody stopped going to Harvey Nichols when Dickson Poon, an overseas Chinese millionaire, bought it. The Dorchester is owned by the Sultan of Brunei but it hardly matters. And even Harrods seems to have survived the reign of the supremely vulgar Egyptian Mohammed al Fayed.
But yes, there is a problem when a brand’s heritage is diluted. For instance, none of the brands I listed above (with the possible exception of Harrods which has now become a tourist trap and lost much of its traditional clientele along with its royal warrants) makes too much of the nationality of its owners. Fe w people know about the real owners of Savile Row’s bespoke tailors. Dickson Poon did not turn Harvey Nichols into a Shanghai Tang-like brand. (Though how is this for a reversal? Shanghai Tang itself is now owned by a French conglomerate). And as for the Arabs you see milling around the lobby of the Dorchester, it is hard to argue that the Sultan’s ownership of the property attracts them: All London hotels are full of Arabs.
If the Dorchester were to declare that it was now going to be a strictly Islamic hotel with no alcohol served, I imagine it would make a difference. If the al Fayed family, which also owns Turnbull and Asser, were to announce that the famous Jermyn Street shirt maker would now only make jellabas, then I guess that Turnbull and Asser’s links with the previous century’s brand of Englishness would be weakened.
Beyond that, however, I don’t see how ownership makes any difference at all to a luxury brand—or even to a mid- market company. Did anyone even realize that Intercontinental Hotel was bought by a Japanese company in the 1980s? Did we stop watching movies made by Columbia Pictures when Sony bought the studio? Is high-street shirt maker Thomas Pink less English because it is now owned by the French? Do we care that the Stella McCartney and Alexander McQueen labels are owned by an Italian company which is eventually controlled by a French conglomerate?
My sense is that, if a brand remains true to its core values, then ownership is largely irrelevant. Take Orient-Express’ own example. How many of the tourists who go to Venice’s famous Cipriani hotel care that its ultimate ownership vests with a company controlled by an American millionaire who made his money in cargo? Or, consider the Mandarin Oriental group which now manages world famous hotels in the West. I would argue that Mandarin Oriental—a Hong Kong-based company—may have actually elevated the brand value of such properties as London’s Hyde Park hotel and Geneva’s Hotel DuRhone because of its own luxury image.
The Taj group seems to have come to a similar conclusion. When the present management took over the company, it abandoned the old St James Court name for its London property and used the Crowne Plaza branding. But now, it goes out of its way to identify properties with both the Taj, and with India (they fly the Indian flag). For instance, the Pierre, its luxury New York hotel, is proud to call itself a Taj hotel. And in such markets as the Maldives and Mauritius where it has gone head to head with Western hotel chains, the Taj branding has actually been an advantage.
So, luxury is more complicated than the management of Orient-Express might think. Just because a Made-in- China label may not signify quality, it does not follow that we will look down on such hotel chains as Shangri-La, Banyan Tree, the Metropolitan and, of course, Mandarin Oriental, whose owners are of Chinese origin or whose parent companies are registered in Hong Kong. In fact, I would argue that in the luxury hotel segment, guests regard Asian chains as having a distinct advantage because of their tradition of service and pampering. It’s the same with airlines. Who would you rather fly? Singapore Airlines and Thai Airways? Or Continental and United?
So a bit of advice for Orient-Express hotels: Take the Taj branding—they’ve been running hotels for a hundred years and they have very little experience of the cargo business.
(Write to Vir at firstname.lastname@example.org)