Can you flash twice in a bottle? At least that’s what Chris Burch, creator of one of the most luxurious hotels in the world, seems to think.
NIHI Sumba, Burch’s Resort in Southeast Indonesia, is the stuff of a luxury hotel legend. It’s a favorite of TPG employees, including The Points Guy himself, who after a visit in 2017 said NIHI’s combination of exploring and relaxing would stay with him for the rest of his life.
It’s easy to see why. NIHI describes its location on Sumba Island as a place where “rugged luxury meets unregulated freedom.” It’s a place with bespoke luxury experiences that blend exceptionally well with the surrounding community – a property that showcases luxury doesn’t have to mean anything gilded. Instead, it can be about the surrounding beauty and activities.
Sign up for our daily newsletter
Originally named Nihiwatu for the surrounding beach, the resort was created in the 1980s by original owners Claude Graves (a surfer) and his wife Petra, who set the stage for NIHI’s ethos. The couple established the Sumba Foundation to give back to the islanders and build a better health and infrastructure network across the island of Sumba. The foundation grew through donations and commitment from resort guests and now includes an educational component, job training and business opportunities for islanders.
Burch, an American entrepreneur known for his role in launching and growing brands like Faena and Tory Burch, purchased what is now NIHI in 2012 in partnership with hotelier James McBride, who is now CEO of NIHI Hotels .
The duo expanded the resort into today’s ultra-luxe iteration, reportedly spending tens of millions of dollars and adding private villas overlooking the Indian Ocean, a world-class spa and other luxurious amenities. At the same time, the NIHI team adheres to sustainable building practices and pays homage to Sumbamese culture with the resort’s thatched roofs, local art and an overall attitude of relying on nearby resources
Aside from the beauty of it all, the experiential component of NIHI is a huge draw for its guests. Private butlers can arrange everything from horseback riding and swimming — even javelin throwing or pasola — to yoga and cooking classes.
Long story short, resort is as much about giving back and preserving as it is about providing a unique, ultra-luxurious experience.
Sure, it’s not the easiest place to get there: catch a flight to Bali, a $605 flight from Bali to Tambolaka Airport organized by the resort, and then a 1.5-hour drive (or a private helicopter charter). With rates sometimes approaching $3,000 a night later this year, it’s not the cheapest either. And Burch and McBride know that.
“The key to hospitality is curiosity and when young people join NIHI it is a once in a lifetime experience. They’re blowing their entire budget,” Burch said alongside McBride in an interview with TPG. “We need to offer the same experience to these younger people who can’t afford to pay more than $450 a night, but they can [still] want that feeling.”
Buch and his team recognized this and decided to create a new, more affordable brand that they say will have the same unforgettable punch as NIHI, but without the out-of-this-world price. Come in, Kodi.
TANIA ARAUJO/NIHI HOTELS
Kodi comes to life
The first Kodi property is set to open next summer overlooking Komodo National Park on the Indonesian island of Flores, and the brand is set to grow in additional locations around the world.
Although Kodi is separate from NIHI, it will play with elements of its big luxury sister brand, such as: B. The emphasis on design and experiences tailored to the environment of each property. Each hotel will also have a philanthropic component.
McBride said the Kodi brand will work in more locations (like mountain, lake, lake, or city destinations) than NIHI, which will stick to more “extraordinary” locations with world-class design “that match where it’s going.” located”. While the NIHI brand has so far focused on Indonesia, a property in Costa Rica is also in the works.
While many of Kodi’s specifics are still under wraps, it will be interesting to see how the company transforms elements of NIHI to achieve this lower price point. NIHI is known for smaller room numbers, larger villas and pools, and private butler service. But for $450 a night, you probably can’t get a personal butler, can you?
The NIHI team’s idea that a once-in-a-lifetime vacation doesn’t have to be a once-in-a-lifetime experience emerges amid increasing competition in the luxury space—even at the highest levels of luxury travel.
On the frontline of attainable luxury, hotelier Ian Schrager is more focused on expanding its public hotel brand – a brand that is described as combining a luxury experience with some elements of a limited-service hotel, by relying on technology to meet some guest needs .
Schrager was known for co-owning the famed Studio 54 nightclub before moving into the hotel world and accelerating the boutique hotel trend with properties like Morgans Hotel and Delano South Beach.
However, his focus these days seems to be on Public’s push to chart a new direction for more affordable luxury. For comparison, a room at the Public in New York City later that fall was $400 a night, while a similar room at the New York Edition (which Schrager partnered with Marriott to launch) was $986.
Undercutting high-end hotels on costs without destroying overall sentiment would be a significant shift in hospitality if Schrager and the NIHI team executed the model well. But NIHI and Kodi face competition beyond Schrager.
NIHI may once have competed directly with brands like Aman, which were associated with traveling to remote parts of the world to find solitude at a hefty price. Now, Aman is getting closer to where people live by opening urban resorts in major cities like Tokyo and New York City. In addition to a beachfront property in Miami, a Beverly Hills location is also in the works.
It’s also launching Janu, its own cheaper alternative to Aman, with locations in Montenegro and Tokyo. However, we’ll have to wait and see what “affordable” really means for Aman, where nightly rates at the recently opened New York property are well over $3,000 a night.
Where Kodi will actually end up in terms of price and location, at least outside of Indonesia, is also anyone’s guess – but don’t rule out the possibility that the team at NIHI and Kodi will grow closer to their customer base.
“It’s going to move very, very quickly, and I think it’s going to quickly become a brand that we can bring to the US,” McBride said.
Not a standard luxury playbook
The NIHI team’s expansion of the new Kodi brand comes at a time when the world’s biggest hotel companies are drooling over the luxury hotel sector – and strategizing how they can get a bigger slice of the high-end pie.
Hyatt’s acquisition of Apple Leisure Group has expanded its presence in Europe, giving it a head start with high-end all-inclusive resorts. But Hyatt’s luxury offering isn’t just about all-inclusive resorts.
The Chicago-based lodging company has partnered with Small Luxury Hotels of the World in an alliance that allows World of Hyatt loyalty program members to earn and redeem points at SLH properties. The company has also fueled the expansion of its luxury brands Park Hyatt and Alila, as well as the wellness-focused Miraval offering. Ten Park Hyatt hotels are in the company’s development pipeline, along with three Alila properties and a Miraval planned in Saudi Arabia.
Accor’s expansion into the lifestyle hotel sector, which is more focused on experiences and dining, also accompanies growth in its ultra-luxury division, led by the Raffles and Orient Express brands. The company’s 15-hotel development pipeline, with new Raffles hotels in the works, puts the brand on track to nearly double its global footprint. Accor also has three Orient Express Hotels in various stages of planning and development. The company has identified around 80 destinations worldwide where it sees an opportunity for future growth and development in the ultra-luxury sector, an Accor spokesman told TPG.
Marriott CEO Anthony Capuano indicated earlier this year that the company is also expanding into luxury hotels, as this top-tier sector accounts for just 10% of the company’s hotel portfolio but 25% of the fees it collects from hotel owners , which licenses its various luxury brands.
“It’s a strong driver of the loyalty program, so you’ll see how we continue to accelerate our growth in the luxury space,” Capuano said at a New York University hotel conference this summer.
But NIHI and Kodi probably won’t play by the same rules as these big hotel companies. Marriott and Hyatt are public companies and ultimately report to Wall Street. That means explaining costs better, which usually requires keeping expenses down and saying, “If it ain’t broke, why fix it?” Mindset.
As Schrager once told me (with a laugh) about partnerships between smaller, cooler brands and the bigger corporations, “You have to look and see if you think that person will be able to make sure it’s not too much.” gives meat on a ham sandwich when sent to the dining room.”
These larger companies might balk at what keeps NIHI at the top of the review lists — even if some of their own high-end brands, like St. Regis, lag behind when TPG sends in reviewers to rate the product.
NIHI and probably also Kodi would have no problem with sending the guests too much meat on the ham sandwich, figuratively speaking. They will do whatever it takes to maintain a high level of repeat business. This means that decor and design are changed practically every year.
“You have to come back and constantly see that there’s been improvements and changes,” McBride said. “This improvement and change can be in colour, it can be in the field, it can be in the gardens [or it] may lie in the experiences, but it must always be something new. Every single business needs to evolve… There is nothing more powerful to keep your customers coming back than to surprise and delight them.”
That ethos is likely why NIHI isn’t losing much sleep in the face of new directions from other companies looking to bolster their own luxury hotel presence — or raise concerns that their new brand will likely face more direct competition.
Soon we will see how this affects Kodi. How much ham can Burch and McBride put on a $450-a-night sandwich, and where will they find ways to create new experiences and spaces for regular guests without driving prices to NIHI levels? We’re excited to find out.
“I have some of my favorite hotels in the world and I don’t want to say that [what they are, but] I swear to you they don’t put any money back into Zimmer. They just don’t do it,” Burch said. “We will do it forever, and we never want to get tired, and we always want to look young and happy. That’s it. It’s as simple as that, and I think that’s our key to luxury.”