When the developers of Palazzo Versace Dubai announced in 2008 that their well-heeled patrons would have their soles cooled by the world’s first artificially refrigerated beach, quite a few news outlets took notice. There would be no frantic tip-toeing across hot sand for these guests; instead, by virtue of an underground mesh of heat-absorbing pipes and enormous wind-blowers, they would soon be able to enjoy the summer sun on cool sands.

However, in an unfortunate development for any excited holidaymakers, plans for the beach were shelved shortly afterwards for "technical reasons". This marked only the start of the Palazzo’s troubles. Three years later, the collapse of the Dubai property market saw financing for the project dry up, almost completely upending the venture between Versace and its developer partner, Enshaa. Only now, with the crisis over and capital recaptured, does an opening date set for later this year seem likely. Yet, with so much time having elapsed since the original announcement, questions remain over whether the substantial investment made by the two companies was even worth it.


Catwalk empire

When fashion houses expand their portfolio, and lend their names and design ethos to branded hotels, it’s an act that doubles down on logic central to their line of business. The most successful labels define their clothing lines as statements, or even extensions, of their customers’ personality – an attempt to cultivate status through acquisition of their product and imbue a feeling of exclusivity. From there, it’s not difficult to imagine that other aspects of one’s lifestyle might be defined by the same rules. And as it turned out, hospitality was the first place where fashion houses began to test this theory seriously.

The first iteration was Versace’s partnership with Sunland Group in 1999 to build Palazzo Versace Gold Coast, which set the basic template for what would become known as the ‘fashion hotel’. Aware that seasonal variation was an impossible undertaking for their partners, they retreated to their core design principles, a neo-Romanesque gaudiness reflected in the hotel’s feast of chandeliers, and endless sheets of pink and white marble. That this became modestly popular with a smattering of A-list celebrities and upper-middle-class Australians eager to share the limelight proved to operators that such a seemingly niche offering could have wide and sustainable appeal.

Since then, around half a dozen high-end fashion labels have partnered with prominent management companies to make serious forays into the luxury hotel market. The Armani Hotel Dubai occupies 11 floors of the Burj Khalifa. Bulgari operates establishments in London, Milan and Bali. Smaller houses such as Christian Lacroix and Ferragamo have even joined in, albeit through subtly lending their design expertise rather than via overt branding.

The reviews have not always been kind. When The New York Times visited Maison Moschino in Milan, what it found was a former railway house with rooms containing "oversize velvet dresses that double as headboards, suspended light fixtures in the form of poodles… and ball gowns that stand in for art installations". A visit from The Wall Street Journal to the Armani Hotel Dubai was memorable less for the sleek design of the interiors and more for the fact that many of the room’s amenities were hidden behind drawers and cupboards with no handles. "Mr Armani wants guests to discover [how to open them] for themselves," a member of staff was quoted as saying.

Focusing on these drawbacks, it’s easy to forget that these ventures can be modestly successful. The Armani Hotel Dubai has been going for five years and even won the prize for World’s Leading Landmark Hotel at the 2014 World Travel Awards. Since then, the fashion house has opened another offering in Milan. Meanwhile, Bulgari is set to open an additional three hotels by 2017 in Shanghai, Beijing and Dubai. And after playing host to the likes of U2 and Beyoncé, the Palazzo Versace Gold Coast was sold to a Chinese consortium in 2012 for $68.5 million, at what was deemed to be the height of the worldwide property crunch.

There have also been setbacks. In February of last year, Alberto Piantoni, CEO of Carlson Rezidor, announced that the hotel group was "splitting with Missoni, having developed new strategic visions in the field of interior design and hospitality". This meant that by June, the label’s name would disappear from two luxury hotels in Kuwait City and Edinburgh. There was little indication that either hotel was faltering. The Hotel Missoni in Edinburgh was named Europe’s Leading New Hotel of the Year in 2010, while its counterpart in Kuwait City was enjoying RevPAR of 7.2% by November 2013 before its subsequent rebranding. Yet, as Piantoni went on to say, the continued inclusion of the bold and bright designs that came with the Missoni label no longer fitted with the hotel group’s "long-term strategy and focus on our core brands, Radisson Blu and Park Inn by Radisson". Earlier this year, plans for another Armani hotel were also put on the backburner after the company’s partner Emaar Group announced it was "very happy" with the hotels it was already operating in Milan and Dubai.


Slow birth

Such is the environment that the Palazzo Versace Dubai has spent the past nine years waiting to break into. With a construction budget initially estimated at $250 million, the hotel was intended to outdo its Gold Coast predecessor in size and ambition. Promotional photos depict swathes of pink and white marble endlessly garlanded with gold leaf and Louis Quatorze furnishings, a stereotype of Italian decadence straight out of a Tomasi di Lampedusa novel.

Yet when the ‘great recession’ began lapping at the shores of Dubai’s property market, funding for the hotel collapsed. The construction cost doubled, forcing the developers to slash the price for pre-sold flats. Other worries, including planning difficulties thanks to the proximity of a dhow shipyard further down the creek and a wholesale redesign of the property pushed the opening date back a further four years. Fast forward to the present day and, with the Dubai property market bouncing back, Palazzo Versace Dubai has come close to opening several times. Staff recruitment for a March opening began in September 2014, and although that date has been and gone without any event, the recent sale of several of the on-site residences suggest a late-2015 opening.

Will Emirates Sunland Group recoup its investment? Bigger and brasher than its Australian cousin, the Palazzo Dubai offers the perfect retreat for those customers as much at ease paying for hand-cut imported Italian glassware as scouting the big buy in the Dubai Mall just a 12-minute drive away. Amid a regional hospitality sector increasingly populated with high-end offerings, that distinctiveness might be crucial in ensuring its survival.

It’s also crucial in a niche sector where fashion hotels live or die on the cachet of their eponymous label. Part of the appeal of a stay at a fashion hotel is as much the conversation had about it afterwards as the level of service. Having to spell out the significance of the brand probably at least partly explains the differing fortunes of Bulgari and Missoni.

Name recognition and a distinctive style are certainly two things Versace has in spades among its target market, but whether that will guarantee the survival of Palazzo Versace Dubai amid competition from Armani and Bulgari is another matter. Whatever the case, it’s a course to which Versace is indisputably committed, with the brand having already decorated entire apartment blocks throughout Saudi Arabia and Lebanon in its legendary baroque style. If those ventures prove successful, then the Palazzo Versace Dubai is likely to remain on trend for some time yet.