No queue, no check-in on a desk with a laminated card. Your buggy will be down on the airstrip when you arrive and your name will be mentioned only once, in a low-key manner. When you arrive at your room, open to the sea with a slow-turning fan, your luggage will somehow have arrived ahead of you. There’s a scent in the air that you’re unable to identify but it will stay with you for years.
About three members of staff to every guest on property at Aman resorts. It does not make money on room rates on any normal calculation.
Which is fine. Because the rooms are not really the point.
The Numbers That Don't Add Up (Until They Do)
The hospitality elements of a resort such as Aman, Six Senses or Soneva (the rooms, the ratios, lobby scent commissioned by a perfumer etc) often run at a wafer-thin margin or even at a loss. This is not a mistake but rather a design factor. And the design factor for running hospitality at a loss is the villas that are attached to the main resort – the resort’s branded residences. A Soneva Jani villa runs into the millions whilst an Aman private home would cost even more.
Economically, the hotel stay is the world’s most expensive property brochure. Your four grand a night to stay at the hotel was to show you a property showroom.
The Arrival Is the Sales Pitch
The little touches you admired (the buggy at the airstrip, bags moving on their own, check-in over a cold towel and not at a computer) now make sense in a different way: this is what it would feel like to own and experience them every day.
Several of the hotel brands are now selling their signature lobby fragrance to residence owners. As for the thread count of their sheets, the brand of soap they use, and the amount of morning light that streams in from the water, all of these things are supposed to remain the same whether the owner is staying for only a week or is a permanent resident.
If You're Just There for the Week
What I’ve described is real, and the staff are exceptional, as is the property. None of it is a trick. Of more interest is the question of who is benefiting from all this attention, and that would be you for now and the developer for a couple of conversations hence.
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Do all luxury five-stars work like this?
No. Raffles in Singapore or Four Seasons in a city centre are hotels. They need to be full and making good margins on their rooms. The branded residence model is at the ultra-remote end of the spectrum: island resorts, private archipelagos – nowhere to go for dinner down the road. And it works only because total immersion is the model. If you can go for dinner down the road to somewhere else, the spell is broken.
What does "branded residence" actually mean day to day?
Depending on the country, you can buy the villa freehold or take a long lease. The resort will then manage your property for you, renting it out when you are not there for a management fee, and in return you get the full hotel service: housekeeping, spa access and the restaurant. Some owners make the rental income cover their costs, but many do not even attempt to do this. Instead of investing, they are simply paying a high premium to experience the resort as if they were staying there as guests.
If the hotel runs at a loss, who actually funds the experience?
First it is the developers, then the individual residence buyers in aggregate. It is selling villas at Aman prices that funds the staff-to-guest ratios that make Aman a brand of value. An extraordinary hotel is required to justify the prices of the villas and the prices of the villas must fund an extraordinary hotel. Both must be real.
Can you visit these places without any intention of buying?
Amans runs a soft sales policy. Nobody pesters guests by the infinity pool with sales brochures. The resort needs to generate interest and guests need to return 2-3 times before a natural conversation about property can take place. Some guests have been returning to Amans for twenty years but have never purchased a property there. They are, from the developer's perspective, lovely guests who help to pay the resort's bills until the right buyer comes along.
FAQ
Why do luxury island resorts run their hotels at a loss?
They do it by design, because the hotel works as a showcase for the villas. Resorts such as Aman, Six Senses and Soneva often run hospitality at a thin margin or a loss. Villa sales to residence buyers fund the staffing and details that guests enjoy.
What is a branded residence?
A branded residence is a villa at a luxury resort that you can buy freehold or on a long lease, depending on the country. The resort manages it and rents it out when you are away for a management fee. In return you get full hotel service, including housekeeping, spa access and the restaurant.
Do all luxury five-star hotels work this way?
No. City hotels such as Raffles in Singapore or Four Seasons in a city centre need full rooms and good margins on them. The branded residence model suits the ultra-remote end of the market, such as island resorts and private archipelagos, where guests have nowhere else to go for dinner and total immersion is the model.
Will Aman staff pressure me to buy a villa if I stay?
Not at Aman, which runs a soft sales policy. Nobody pesters guests by the infinity pool with brochures. Guests are expected to return two or three times before a natural conversation about property happens. Some have returned for twenty years without buying, and the developer still values them as guests who help pay the resort’s bills.
