Skift Take

Emirates and Aegean will codeshare. You scratch my route network and I’ll massage yours.

Dennis Schaal

Greece’s largest carrier Aegean Airlines said on Wednesday it had struck a so-called code sharing agreement with Emirates, allowing both companies to offer more destinations to their passengers.

Emirates passengers will be able to travel to eight destinations in Greece via Athens, while the agreement will allow Aegean to expand its international network via Dubai.

Aegean, a member of the Star Alliance airlines group, currently flies to 138 destinations at home and abroad with a fleet of 64 aircraft, including new Airbus A320 and A321 neo jets.

(Reporting by George Georgiopoulos Editing by Mark Potter)

This article was from Reuters and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to [email protected].

Aman Resorts has been in the headlines this month after it received a $900 million investment from Saudi Arabia’s Public Investment Fund and Cain International, a UK-based real estate investment firm. The deal valued the Swiss company, owned and run by Vladislav Doronin, at $3 billion.

Aman this month also debuted a Manhattan location, which has an 83-suite hotel and 22 branded residences.

The deal raised questions. What’s Aman’s strategy? Why are investors confident? Will they ever make a profit? While an Aman executive didn’t respond to an interview request, some industry observers offered educated guesses as to the answers to these questions on background.

The peril is that growth may cause Aman to become too successful. Scarcity is an important driver in luxury sales. In the past, few ultra-high-net-worth individuals had been to an Aman. But as the brand’s network grows, the more vulnerable its coveted premium status will be. Aman today has 34 properties, with nine under construction. Can it retain its cachet as it scales?

Some analysts point to recent luxury brand transactions where valuations were about 15 to 20 times earnings before interest, taxation, amortization, and depreciation. If one assumes the latest Aman investment was done at about 17 times expected earnings for this year, the company might throw off around $170 million in margin this year. Is that adequate?

Estimating the cost of equity and cost of debt for hotel, resort, and residence projects across more than 20 countries during a time of rising inflation, interest rates, and geopolitical uncertainty is a considerable challenge. The latest investment may be premised on Aman increasing its historical annual revenue growth and operating margin even further. That may be hard.

Many eyes were drawn to Saudi’s new stake. The state-owned $1 trillion fund officially said the investment fits its 2021-2025 strategy of diversifying its investments in non-oil sectors such as tourism. Relatedly, the fund has a pipeline of more than 130,000 hotel rooms in the kingdom set to be in operation by 2030. The kingdom’s commitment could run deep.

Patron of Choice

What key decision-makers at Saudi Arabia’s fund and Cain have in common with Doronin, a real-estate developer, is they’re all billionaires. So they understand the mindset of the ultra-high-net-worth individuals that Aman covets as customers, and they have a sense of how effective it is at addressing their key needs as travelers relative to other players.

Eight years ago, Doronin bought Aman after having stayed in the properties. He’s now owner, chairman, and CEO. He and investor Omar Amanat bought Aman for about $300 million, according to published reports. (Amanat is no longer an investor.)

Will Cain and the Saudis as new investors ever make money?

What the billionaires may know better than the rest of us is that Aman’s core target customer is in a phase of life where they’ve seen so much that they want access to more than one type of ideal property. They may want a tropical view, a mountain view, or an exciting city, depending on the circumstance. Aman hopes to tap into this group’s desire for flexible options by building its network across property types and locations to encourage repeat visits.

While Aman’s hotels grab the spotlight, the company’s operation of branded residences is believed to be central to its financial potential. The company said it had generated $2.4 billion in sales of Aman-branded residences in the past year alone.

Sales of residences may be important for being able to keep the economics working for the hotels, which tend to run to about 80 suites, making it relatively small in guest count compared to other boutique hotels, while still having many big hotel features, such as expansive lobbies.

For Aman’s backers, the opportunity for the brand remains much bigger than it already is. Consider that the company’s Miami hotel and residences are co-owned by British billionaire Len Blavatnik, who must be expecting returns well exceeding the cost of capital. Most projects require cold-eyed investors to believe the pitch, and many real-estate veterans have so far.

Cain’s philosophy is to invest in gateway cities — as shown by how it has made most of its investments in Miami, New York, Boston, Los Angeles, Madrid, and London. The gateway cities are all target markets of Aman because ultra-high-net-worth individuals often pass through them — hence, Cain’s interest in Aman.

Key Ingredients for Ultra Luxury

Aman was founded in 1988 by Adrian Zecha, who created remote village-like resorts that shed the pretentiousness of many luxury properties in exchange for intimacy and gracious service. The first, Amanpuri, was built in Phuket, Thailand, on the model of an unassuming but luxurious private residence secluded by nature.

One of Aman’s brand pillars is location. It develops locations with views difficult for others to replicate but that are increasingly in gateway cities or are easily accessible from nearly every major hub for the wealthy. This scarcity of location can help to sustain Aman’s prestige. The new capital firepower will enable the company to be competitive in acquiring and developing these super-rare sites.

Privacy is another luxury that can be hard to obtain for celebrities and wealthy business people. Aman’s properties and residences are architected for seclusion while still reflecting the unique traits of a location — a tricky balance to create operationally in a cost-effective way. An upcoming hotel in Beverly Hills promises to have rooms nestled in botanical gardens.

A stellar service proposition is also easier requested than consistently provided. It’s straightforward for Aman to have a high staff ratio per guest to make sure all needs can be instantly accommodated.

More operationally challenging is how to hire talent that’s ideal for the work. Aman is said to have relentlessly fine-tuned its talent acquisition and training system to select employees who aren’t just skilled at the mechanics of, say, making a martini or folding a bed but also have the right humility and deference to show respect to ultra-high-net-worth individuals.

Finding the right person for the right position is especially difficult, particularly when Aman tries to instill a service mindset developed in Thailand to all resorts and residences globally. Aman Real Estate Holdings owns or part-owns 16 of the 34 hotels, so it has a hands-on role in the hiring and training challenge.

Wellness is a topic of growing interest for the well-off, and Aman — whose guests have an average age of 44 — was early to providing rejuvenating amenities and services. It put new twists on spa and meditation services, such as detox seminars and the use of biofeedback machines.

Aman’s wellness services sync with its restaurants in serving foods perceived to be wholesome, such as organic fruits. Overall, the hotels and residences are designed to reflect qualities of peace, harmony, space, and balance, the company has said.

What’s Next?

Aman’s biggest source of customers is the U.S., followed by Britain, Switzerland, and other Western European countries — though its Japanese customers are the most loyal. Upcoming property openings in Miami and Beverly Hills should help fortify its U.S. business.

Right before the pandemic, the company announced a relatively lower-cost luxury brand, Janu. The crisis slowed its rollout. The latest funding will help support Janu’s development, a statement said.

The first Janu hotel is set to open soon in Montenegro, with others to open in Al Ula in Saudi Arabia and in Tokyo. The company recently hired Guy Heywood, formerly with Six Senses, as Janu’s chief operating officer.

While Aman’s watchword is “peace,” Janu’s is “soul.” Aman’s properties are structured for seclusion and a low-key pace. Janu will aim to foster social connectedness and livelier energy, such as through more group activities. Janu will also enjoy the favorable economics of higher room counts.

The concept of the Janu spinoff appeared to be similar to how fashion brands develop more affordable products adjacent to their flagship offerings for the ultra-rich. If you can’t afford Hermes’ Birkin handbag for more than $10,000, the luxury retailer will offer you a Kelly Pochette for only a few thousand.

Looking ahead, Doronin has spoken about creating “an ultra-luxury ecosystem” around the Aman brands, going beyond hotels and branded residences.

What might that include? In an email interview with The New York Times this week, Doronin mentioned the creation of a member’s club at a cost of maybe $200,000 for each location. Might Aman try to marry the exclusivity of a member’s club to office or co-working spaces?

Doronin’s team earlier this month touted Aman Essentials, a collection of fragrances, leather goods, and high-end fashion, in Vogue Business. What other collaborations with a fashion retailer, jeweler, or watchmaker might enable an extension of Aman’s aesthetic? Of note, Doronin and his co-investor outbid LVMH for Aman years ago. The luxury giant may still be interested in fostering partnerships with the brand.

Might Aman create a more niche resort brand by acquiring Azerai, a set of resorts founded by Aman inventor Zecha?

Might Aman go as far as to open schools or academies where its immersive approach to wellness, such as Qigong energy training, or principles of high-touch hospitality, might be taught? Or perhaps a small network of members-only standalone elite wellness centers in major cities?

Or might it create a standalone experiences brand? After all, the company already offers experiences at its resort properties, such as guided tours to heritage-protected sites.

If anyone is attuned to what Aman’s customers want, it should be its CEO, who socializes with celebrities and does business in his non-Aman work with countless upper-net-worth individuals.

Yet more questions will unspool themselves now that Saudi Arabia’s trillion-dollar fund has backed Aman. The fast-growing, fast-diversifying kingdom is likely to have additional money to invest in luxury travel and other categories for years to come, according to the International Monetary Fund. Aman’s financial runway could be quite fashionably long.

Aman Resorts has been in the headlines this month after it received a $900 million investment from Saudi Arabia’s Public Investment Fund and Cain International, a UK-based real estate investment firm. The deal valued the Swiss company, owned and run by Vladislav Doronin, at $3 billion.

Aman this month also debuted a Manhattan location, which has an 83-suite hotel and 22 branded residences.

The deal raised questions. What’s Aman’s strategy? Why are investors confident? Will they ever make a profit? While an Aman executive didn’t respond to an interview request, some industry observers offered educated guesses as to the answers to these questions on background.

The peril is that growth may cause Aman to become too successful. Scarcity is an important driver in luxury sales. In the past, few ultra-high-net-worth individuals had been to an Aman. But as the brand’s network grows, the more vulnerable its coveted premium status will be. Aman today has 34 properties, with nine under construction. Can it retain its cachet as it scales?

Some analysts point to recent luxury brand transactions where valuations were about 15 to 20 times earnings before interest, taxation, amortization, and depreciation. If one assumes the latest Aman investment was done at about 17 times expected earnings for this year, the company might throw off around $170 million in margin this year. Is that adequate?

Estimating the cost of equity and cost of debt for hotel, resort, and residence projects across more than 20 countries during a time of rising inflation, interest rates, and geopolitical uncertainty is a considerable challenge. The latest investment may be premised on Aman increasing its historical annual revenue growth and operating margin even further. That may be hard.

Many eyes were drawn to Saudi’s new stake. The state-owned $1 trillion fund officially said the investment fits its 2021-2025 strategy of diversifying its investments in non-oil sectors such as tourism. Relatedly, the fund has a pipeline of more than 130,000 hotel rooms in the kingdom set to be in operation by 2030. The kingdom’s commitment could run deep.

Patron of Choice

What key decision-makers at Saudi Arabia’s fund and Cain have in common with Doronin, a real-estate developer, is they’re all billionaires. So they understand the mindset of the ultra-high-net-worth individuals that Aman covets as customers, and they have a sense of how effective it is at addressing their key needs as travelers relative to other players.

Eight years ago, Doronin bought Aman after having stayed in the properties. He’s now owner, chairman, and CEO. He and investor Omar Amanat bought Aman for about $300 million, according to published reports. (Amanat is no longer an investor.)

Will Cain and the Saudis as new investors ever make money?

What the billionaires may know better than the rest of us is that Aman’s core target customer is in a phase of life where they’ve seen so much that they want access to more than one type of ideal property. They may want a tropical view, a mountain view, or an exciting city, depending on the circumstance. Aman hopes to tap into this group’s desire for flexible options by building its network across property types and locations to encourage repeat visits.

While Aman’s hotels grab the spotlight, the company’s operation of branded residences is believed to be central to its financial potential. The company said it had generated $2.4 billion in sales of Aman-branded residences in the past year alone.

Sales of residences may be important for being able to keep the economics working for the hotels, which tend to run to about 80 suites, making it relatively small in guest count compared to other boutique hotels, while still having many big hotel features, such as expansive lobbies.

For Aman’s backers, the opportunity for the brand remains much bigger than it already is. Consider that the company’s Miami hotel and residences are co-owned by British billionaire Len Blavatnik, who must be expecting returns well exceeding the cost of capital. Most projects require cold-eyed investors to believe the pitch, and many real-estate veterans have so far.

Cain’s philosophy is to invest in gateway cities — as shown by how it has made most of its investments in Miami, New York, Boston, Los Angeles, Madrid, and London. The gateway cities are all target markets of Aman because ultra-high-net-worth individuals often pass through them — hence, Cain’s interest in Aman.

Key Ingredients for Ultra Luxury

Aman was founded in 1988 by Adrian Zecha, who created remote village-like resorts that shed the pretentiousness of many luxury properties in exchange for intimacy and gracious service. The first, Amanpuri, was built in Phuket, Thailand, on the model of an unassuming but luxurious private residence secluded by nature.

One of Aman’s brand pillars is location. It develops locations with views difficult for others to replicate but that are increasingly in gateway cities or are easily accessible from nearly every major hub for the wealthy. This scarcity of location can help to sustain Aman’s prestige. The new capital firepower will enable the company to be competitive in acquiring and developing these super-rare sites.

Privacy is another luxury that can be hard to obtain for celebrities and wealthy business people. Aman’s properties and residences are architected for seclusion while still reflecting the unique traits of a location — a tricky balance to create operationally in a cost-effective way. An upcoming hotel in Beverly Hills promises to have rooms nestled in botanical gardens.

A stellar service proposition is also easier requested than consistently provided. It’s straightforward for Aman to have a high staff ratio per guest to make sure all needs can be instantly accommodated.

More operationally challenging is how to hire talent that’s ideal for the work. Aman is said to have relentlessly fine-tuned its talent acquisition and training system to select employees who aren’t just skilled at the mechanics of, say, making a martini or folding a bed but also have the right humility and deference to show respect to ultra-high-net-worth individuals.

Finding the right person for the right position is especially difficult, particularly when Aman tries to instill a service mindset developed in Thailand to all resorts and residences globally. Aman Real Estate Holdings owns or part-owns 16 of the 34 hotels, so it has a hands-on role in the hiring and training challenge.

Wellness is a topic of growing interest for the well-off, and Aman — whose guests have an average age of 44 — was early to providing rejuvenating amenities and services. It put new twists on spa and meditation services, such as detox seminars and the use of biofeedback machines.

Aman’s wellness services sync with its restaurants in serving foods perceived to be wholesome, such as organic fruits. Overall, the hotels and residences are designed to reflect qualities of peace, harmony, space, and balance, the company has said.

What’s Next?

Aman’s biggest source of customers is the U.S., followed by Britain, Switzerland, and other Western European countries — though its Japanese customers are the most loyal. Upcoming property openings in Miami and Beverly Hills should help fortify its U.S. business.

Right before the pandemic, the company announced a relatively lower-cost luxury brand, Janu. The crisis slowed its rollout. The latest funding will help support Janu’s development, a statement said.

The first Janu hotel is set to open soon in Montenegro, with others to open in Al Ula in Saudi Arabia and in Tokyo. The company recently hired Guy Heywood, formerly with Six Senses, as Janu’s chief operating officer.

While Aman’s watchword is “peace,” Janu’s is “soul.” Aman’s properties are structured for seclusion and a low-key pace. Janu will aim to foster social connectedness and livelier energy, such as through more group activities. Janu will also enjoy the favorable economics of higher room counts.

The concept of the Janu spinoff appeared to be similar to how fashion brands develop more affordable products adjacent to their flagship offerings for the ultra-rich. If you can’t afford Hermes’ Birkin handbag for more than $10,000, the luxury retailer will offer you a Kelly Pochette for only a few thousand.

Looking ahead, Doronin has spoken about creating “an ultra-luxury ecosystem” around the Aman brands, going beyond hotels and branded residences.

What might that include? In an email interview with The New York Times this week, Doronin mentioned the creation of a member’s club at a cost of maybe $200,000 for each location. Might Aman try to marry the exclusivity of a member’s club to office or co-working spaces?

Doronin’s team earlier this month touted Aman Essentials, a collection of fragrances, leather goods, and high-end fashion, in Vogue Business. What other collaborations with a fashion retailer, jeweler, or watchmaker might enable an extension of Aman’s aesthetic? Of note, Doronin and his co-investor outbid LVMH for Aman years ago. The luxury giant may still be interested in fostering partnerships with the brand.

Might Aman create a more niche resort brand by acquiring Azerai, a set of resorts founded by Aman inventor Zecha?

Might Aman go as far as to open schools or academies where its immersive approach to wellness, such as Qigong energy training, or principles of high-touch hospitality, might be taught? Or perhaps a small network of members-only standalone elite wellness centers in major cities?

Or might it create a standalone experiences brand? After all, the company already offers experiences at its resort properties, such as guided tours to heritage-protected sites.

If anyone is attuned to what Aman’s customers want, it should be its CEO, who socializes with celebrities and does business in his non-Aman work with countless upper-net-worth individuals.

Yet more questions will unspool themselves now that Saudi Arabia’s trillion-dollar fund has backed Aman. The fast-growing, fast-diversifying kingdom is likely to have additional money to invest in luxury travel and other categories for years to come, according to the International Monetary Fund. Aman’s financial runway could be quite fashionably long.

Skift Take

Today’s edition of Skift’s daily podcast looks at Vacasa’s new CEO, post-pandemic habits of Indian tourists, and a new batch of women-led tour operators.

Rashaad Jorden

Good morning from Skift. It’s Thursday, August 25 in New York City. Here’s what you need to know about the business of travel today.

Listen Now

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Episode Notes

Tour operators were largely battered by the pandemic, but dozens of travel communities saw membership grow substantially while travel was paused. Contributor Tony Carne reports that women-led tour operators have grown from those booming communities.

Carne writes that desire among travelers to be among like-minded individuals — as well as safety concerns — are driving the growth of such communities. Those groups have evolved from settings where travelers can meet online to companies organizing tours. One noticeable feature about groups Carne discovered was the importance of community, which he believes sets them apart from traditional tour operators. Haley Woods, the creator of Girls LOVE Travel, said her group started running trips because that’s what her community wanted.

Next, inflation hasn’t slowed down Thomas Cook (India), with the travel company recording strong growth in the second quarter. And Managing Director Madhavan Menon strongly believes that surging travel demand isn’t dying down, reports Asia Editor Peden Doma Bhutia.

Menon said in an exclusive interview with Skift that Thomas Cook (India)’s rebound has been fueled mainly by domestic travelers, with both business and leisure travel recovering to nearly pre-Covid levels. The company registered a second quarter pre-tax profit of $740,000, which Menon attributed to the company successfully cutting costs.

However, Menon acknowledged that Thomas Cook (India) is struggling to secure visas for customers to locations such as the United States and United Kingdom. In addition, he believes the Indian government needs to increase its efforts to attract foreign visitors. Menon notes that it’s not extending electronic visas to travelers from the UK, a major source market for India.

We end today with big news from Vacasa. The vacation rental company announced on Wednesday that former Egencia President Rob Greyber will replace Matt Roberts as CEO, reports Executive Editor Dennis Schaal.

Roberts said he’s leaving Vacasa to spend more time with family and return to retirement. He had been retired before becoming Vacasa’s CEO in 2020. Meanwhile, Greyber, who will also take over Roberts’ slot on Vacasa’s board of directors, will assume his new CEO duties on September 6. Greyber served as Egencia’s president for 11 years, during which the company became a force in tech-enabled corporate travel, Schaal writes.

Vacasa, which went public through a blank check merger in December 2022, eliminated 25 sales positions last month, and Vacasa hinted further cuts could be on the horizon.