When Nobu Hotels was first launched by Nobu Matsuhisa, Robert De Niro and Meir Teper as an offshoot of their successful restaurant brand, naturally there was concern as to whether the brand would succeed. Now, nearly 10 years later, after opening three properties in 2020, the brand is on a continuing path of expansion into 2021, nearing its 20th property.
“When we started the hotels, naturally, the first was to get the first one off the ground and to make it a success,” said Trevor Horwell, CEO, Nobu Hospitality. “It was really ‘Make sure you get in with the right partners to do that. You need to convince people that the hotel side of it is going to be a success.”
Caesars Entertainment was the first to partner with the hotel brand. “You need the belief of the first partner to do that and we were lucky with Caesars Entertainment that they believed in the brand,” he said. “They did their own analysis, and they could see the strength of the brand equity as well as the customer loyalty that was built more than 20 years or so. The key was getting the first one off the ground and then going forward, you just have to make sure that every one that you do really delivers the Nobu concept fully.”
The success of the brands has always been about its loyal customer base—something that has helped during the current pandemic. “We like to embrace the local spirit of the destination,” said Horwell. “The food and beverage provides the heartbeat of the hotel. It then comes down to bringing in the loyal Nobu customers to stay at the hotel. We do probably 150,000 customers a year in each individual restaurant, so it is a matter of just converting some of those customers to stay with you and probably, if you convert 10-15% of the customers that are going to Nobu today, you are going to fill all of our hotels.”
After tapping into that customer base, the key was still delivering the Nobu DNA to guests. “It has taken time and it is a testament to all the teams that have worked to make it happen,” he said. “The owners are very key to going forward and we are still growing at pace even despite the pandemic. I think a lot of it has to do with the strong brand equity and the business model.”
Those loyal guests have helped Nobu weather the storm of the pandemic. “We closed some operations and then we reopened,” said the CEO. “We are happy that there is a trust in our brand and our guests are starting to come back. We had a great 10 years behind us if you think about it, and 2019 was no different than 2018. The way we look at our business is that we just have to plan for the future. We’ve got a sustainable business that’s been around for 25 years, so we have already painted our picture on the global scene now. We have to just keep moving forward.”
The company continued that move forward in 2020 as it opened new properties in Chicago, Warsaw and London’s West End, while also completing the renovation of another in Palo Alto, CA. All of the hotels were doing well until the pandemic hit. “We are very encouraged that when we reopen again, we will see a resurgence of the business that we had. The great thing about it is 70% of our customers going to the restaurants are locals, so in a way we’ve got quite a business model because if we can drive traffic to our restaurants from the locals, it balances just to a certain extent what is happening in the hotels if we are having lower occupancy.So our breakeven points are slightly different to maybe a lot of other hotels and so forth.”
This year will also see growth for the brand. “We’ll do the same this year,” said Horwell. “We are going into Marrakesh [Morocco]. By the end of the year, we will be opening Atlanta and then the early part of next year, we are opening Toronto. So we’ve got some great projects going.”
In late February, the company announced a deal for its first hotel and restaurant in Hamburg, Germany. The property will be located within the Elbtower, a project by Signa Real Estate. The Elbtower will be a mixed-use development destination encompassing premium office space and the Nobu hotel and restaurant set within the tallest high-rise in the city. The project is the first in Nobu’s partnership with Signa.
The hotel will have 191 guestrooms and suites; a 200-seat Nobu restaurant; a terrace bar and lounge with views of the River Elbe; and a fitness and wellness facility. Plans for the property also include event space for corporate and social gatherings, as well as an outdoor terrace.
Horwell expects more announcements of the brand’s growth in the coming year. “To me, we have done it very carefully,” he said. “When I say very carefully, you just have to layer on new properties with care and you don’t want to go into a market that you are not going to be successful. A lot of it has to do with looking at the market mix of each location.”
The company approaches all of its hotels the same, but the one factor that is paramount is service, especially when it comes to food and beverage—its “heartbeat.” “Naturally, in today’s environment, people are looking at making efficiencies in various areas, which is happening all over, but if you stay at Nobu, it is about the full food and beverage experience of Nobu throughout the property,” he said. “We have some wellness aspects, but we tend to do that on a bespoke basis. The main thing for us is that we play to our strength, which is F&B and that is where our customer comes from.”
