Hotel as community hub

MADRID – While some of their existing deals remain in various stages of development, UMusic Hotels is a concept with unique positioning—bringing local music and artistry inside the property to make it the focal point of the city stay and experience. UMusic CEO Robert Lavia said the hotel arts programming is what truly depicts the surrounding community and how guests start to discover that community.

Lavia doesn’t look at the first property now open in Madrid as a hotel. Rather, he sees an integrated resort that taps into the community in a different way, changing the way guests experience traditional hospitality, discovering the locale through the hotel’s lens. “We’re using the most powerful medium in the world, which is music. It’s the most viral content on the planet. People follow music more than sports,” Lavia told Hotel Investment Today during a recent interview. “It’s an international language and we can use music as a driving force for not just content but discovery.”

A joint venture between Universal Music Group (UMG) and Dakia U-Ventures, UMusic Hotels puts music and entertainment at the forefront of design and the guest experience. It draws inspiration from the local culture and serves as a creative hub in community—promoting positive social change, education and innovation through the power of music.

UMG and Dakia work together to identify and create properties and leverage Universal’s intellectual property for both hotel services and in-hotel ancillary services such as restaurants, retail stores, concert venues, etc. Universal further contributes marketing and promotional support, the sourcing and managing UMG artists for various projects, and facilitating concerts and performances to occur onsite.

On the operations side, UMusic Hotels has recruited Jordi Solé, a 25-year hotel veteran, as president of hospitality.

The first, 130-room, leased luxury hotel in Madrid opened in November 2022 with a renovated, historic 898-seat theatre, where Universal Music Spain works with the property to bring in entertainment. In fact, the first musical production had actor Antonio Banderas as director and player of the title character. Lavia added that three noteworthy local artists followed up selling out 20 consecutive nights.

At the first Madrid property, Lavia added that more than 70,000 people have bought show tickets since the opening and theatregoers arrive through the hotel lobby, which helps activate the entire space.

Lavia said food and beverage is a big revenue driver and tends to help drive hotel rate and occupancy, which he said is on par with other 5-star hotels in the market at around €225-250 a night.

UMusic Hotels, which does not take equity stakes other than lease arrangements, has a second project in Madrid’s Plaza de Canalejas set to open in 2027. The group signed an agreement with the Pescaderías Coruñesas to manage the complex that will include 70 rooms, occupy about 10,000 square meters and include the restoration of three historic buildings – the 600-seat Reina Victoria Theater, the Meneses Building and the Casa Allende.

Back in 2020, UMusic Hotels announced three projects in the U.S., including Atlanta, Georgia; Biloxi, Mississippi; and Orlando, Florida, but the pandemic put them on hold for a few years, according to Lavia, who is also chairman at Dakia U-Ventures. They also had Pyramid Hotel Group as a joint venture partner for the U.S. projects, but Lavia said that relationship has since become more of preferred support management arrangement. Lavia said the U.S. deals are still being developed, adding that projects are also confirmed in Barranquilla, Colombia, and São Paulo, Brazil, which is also a lease deal. Another project is expected to be announced in Mexico.

Lavia said most of the project are financed – some of them in different stages because of permits, etc. “Some of our projects are very large. So, they have to go through a large permitting process and some rezoning,” he said. “That sometimes delays the debt financing…Generally, we don’t do projects unless the person who owns the land has the equity. Then it’s just about finding the debt.”

More generally, Lavia, who spent his formative professional years working in the theme park and circus businesses, said UMusic Hotels has a progressive expansion plan with a main objective to take the brand to the main cities in the world and those which will consolidate its presence in Europe, the United States and Latin America. “We look for locations where entertainment, music and hospitality go hand in hand. In this sense, our interest is not only open to other cities but also to seaside destinations,” Lavia added.

Most of the projects are greenfield because Lavia said it is hard to find an asset that fits what they want to create. “There aren’t too many hotels in the world that have a theater that’s fully embedded into the asset,” he said.

Projects also have shared office space for the local creative community to come together to access recording studios and different mechanisms they need to create. “When those creators work from our hotel (through a membership fee) they will have coffee in the lobby and usually rub shoulders with our hotel guests,” Lavia explained.

Looking three years down the road, Lavia said he’d love to have some 20 hotels open or under development. “Every city we’ve gone to, we’ve been very blessed. We literally get grants from the city because they understand how important this is to drive impact on the city.”

Lavia added that UMusic Hotels fully integrate into their communities. “We do studies in every city we go to on how to empower the music and creative ecosystems,” he said. “The mayors, secretaries of culture and tourism are fully aligned with us because we can act as a bridge to those worlds and do something that’s really impactful to the community. We all want to get it right.”