Opening hotels & clubs for Cipriani

Welcome to The Stanza’s In The Room interview series, designed to make you feel like you’ve just had a very satisfying and insightful coffee chat with an industry leader.

Thank you all for being part of The Stanza. If you enjoy the interview, please share it with a friend or colleague :)

Connect with The Stanza on IG ⁠here⁠.

Clemente started his career at Cipriani in LA in 2011 and has since worked in a variety of hospitality roles - from daily operations, to development and opening new locations. Some of his notable openings include Mr. C Hotel in Miami, and the two Casa Cipriani locations in New York and Milan. Currently, Clemente is the club director at Mark’s Club in London (The Birley Clubs), overseeing the refurbishment and relaunch. 

I invited Clemente on The Stanza to share insights from his extensive experience directing the orchestra required to successfully open and operate a hospitality business. I’m particularly excited to share this interview because it’s the first Milanese guest.

Enjoy!

Connect with Clemente ⁠here⁠.

Interview Highlights:

• Opening Casa Cipriani in Milan

• The meaning of heritage with respect to hospitality

• Club culture in NYC vs London vs Milan

• Optimizing business models for clubs vs hotels

• Fundraising for clubs vs hotels

What were the biggest lessons that you learned from opening Casa Cipriani that you’re bringing to your role at The Birley Clubs?

Nothing goes as planned. When you're planning for an opening, prepare for the unexpected. And to be fair, it's kind of an oxymoron because you cannot prepare for the unexpected. You just have to have an open mind that things are going to go wrong and it's going to be very, very intense. Even though nothing goes as planned, a meticulous training program, which covers different operational scenarios, can make the difference between success and failure. The more training the better prepared for the unexpected.

I think the biggest lesson was just dealing with the pressure. In Milan, we had not only the attention of the media and the Milan crowd, which is a very particular crowd with very high expectations, but also we had Arrigo Cipriani, who had just turned 94 years old, often coming to Milan with his whole family to check on progress.

Learning how to manage the pressure of expectations and balancing construction budget and finances with owners expectations, landlord’s expectations, and time constraints typical of a construction process was the biggest lesson.

In any circumstance, when I find myself in a very intense situation, I just take a step back, take a deep breath, and I am able to analyze without getting too emotional. Then there are many small theoretical things that I learned during the process, but it's too big of a list. This is the biggest takeaway.

The Cipriani brand also has stood the test of time and they've gone through a lot of different phases. They've also had their fair share of legal troubles. But I'm curious as to why, from an insider's perspective, do you think they've maintained a certain level of prestige over a long time?

The brand is to me the ultimate lifestyle Italian brand in hospitality. There is nothing that really reaches the level of consistency in terms of service, food, glamor, attraction, magnetism that this brand has. I think that throughout the years, the biggest contributing factor to maintaining the brand's high quality and consistency was the family. The family being present, traveling to every location, every opening, they're there. 

When Giuseppe Cipriani opened Cipriani in New York, he was on the floor with Arrigo Cipriani taking orders, bringing them to the kitchen and so on. And even after 25 plus years in the business, Giuseppe was at the Milan opening, taking orders and making sure that every single table was satisfied. 

Giuseppe Cipriani… who does not have to do that, right? Because he has achieved everything that he needed to achieve. So it’s just the passion and the love they have for this business. It's so evident, so clear in the amount of presence they put in every single restaurant and property they have. 

I think that the care for the detail, the interest for consistency, and the presence in every aspect of the operation have been the most determining factors in maintaining the quality and the level of service and food that they have throughout these years. They have gone through some hardships, but always manage to come out of it because they have the grit, the determination, the incredible passion for hospitality and a clear understanding of their heritage. 

In New York, Casa Cipriani is part of the cultural zeitgeist. There's many memes about it. There was that whole member purge that happened last summer. And it has a bit of a reputation.

Whereas in Milan, I think club culture generally hasn't quite taken off. There really aren't any other clubs besides Aethos, which isn’t a true club, and Core Club, which hasn’t opened a physical location yet, and The Wilde, which is opening soon.  Why do you think that is? Why do you think clubs have really taken off in New York and London (in these Anglo-Saxon countries) versus in Europe?

In Italy, you only had the historical clubs, which were the social clubs like Clubino in Milan, or Circolo della Caccia in Rome. But those had primarily an “aristocratic and bourgeois” kind of vibe to it. 

Outside of Italy, there is the culture of the social club. If you take London, for example, it's the city with probably the most private clubs in the world and there has always been a culture for it.

There are different purpose clubs that target different subsets of people because London has always been a more international city and therefore there’s more diversity and more opportunities to reach different subsets of people.

And that Anglo-Saxon mentality transferred perfectly to New York. With New York being such a cultural international capital, you can build different brands for different people. In such massive, dispersive cities, you kind of have to go back to small communities. And a way to build big or small communities is by creating members clubs, social clubs or any kind of group in general.

After this big preamble, to go back to your question, in Milan, there is already a community. It’s such a tiny town where everybody knows each other already. There is a sense of membership to Milan. The fact that you live in Milan gives you a sense of membership [in a way]. 

Further, in Italy, there is still a bit of a cultural disconnect from the modern concept of a club. Milan has an increasing international crowd so it’s more receptive to members clubs, but there is still a generational/cultural divide in Milan of people that have accepted the club concept, and people that are a bit stuck in their old ways.

I was also thinking that in Latin cultures, there's already such a big emphasis on socializing. Everyone's out at the bar at 5pm having aperitivo. So the concept of paying 4000 euros a year for a club membership isn’t really a thing here. 

Yes, absolutely. We noticed that when we started selling memberships in Milan, some of the people in Milan were ready for something like a private members club. But you could see the friction from the old school mentality and the new school mentality where the people that had traveled and knew New York and London were happy to pay 3500 euros. 

There was also a subset of hardcore Milanese people, who thought “why would I pay three and a half thousand euros and then pay for dinner as well?”. You're paying for a sense of community, a service, a sense of belonging, a home away from home. And we actually got that question many times. In New York, we don't. People are actually happy to spend to get into places like this, where they'll pay any amount of dollars.

Do you think the members club business model as we know it today is a good business model or did you ever think of other ways to possibly innovate on that?

There's a lot of clubs now. I think that everybody's embarking on this membership club journey. In the medium term: it's very popular and a lot of people are going to make money. In the long term: a lot of people are going to lose money. The brands that survive will do so because they have that level of service, recognition, brand value and clients around the world.  

But I think that it's an amazing business model because memberships are primarily just floats, everything floats to the bottom line and it's fantastic. Many people raise capital and build the members clubs with the membership money. And it's fantastic. But at the end of the day, you really have to pick your winners in this world where there are so many private members clubs opening. We’re seeing this bubble expand, but one point, it will probably burst.

These businesses need to be able to show operating profit without membership. I think that's really the key to survival for any club that can go into a downturn. If you are not able to survive with creating, generating, operating profits, it's going to be really tough when the pool of members shrinks. 

And how do you do that? Charge 30 euros for a bellini? [Kidding.]

It is difficult to reinvent the wheel, so it is difficult to completely change the club model. But there are ways to make it more efficient. And the best way to make it efficient and successful is to find your niche in the market, your specific unique clients that have a common need and cater perfectly and seamlessly to those needs. Multi purpose clubs are not necessarily the answer to survive in this world because you dilute the common goal of the members participating.

It’s tough - finding your uniqueness, understanding exactly what you're about and what you're selling, and having a value proposition that is different from your competitors is crucial. You cannot be one of the many clubs that just opens with amazing design and beautiful outlets and a fantastic chef. You really have to look for your vision, your mission, and your little corner in the market and cater to that specific corner in the market and really satisfy everything that they're looking for. 

I take the example of Mark's because I'm so familiar with it. In a world where every club is about flamboyant craziness and amazing chefs and crazy offerings, Marks stands out because of its simplicity, privacy, kind of old British flair, elegance. 

And you don't really hear a lot about Mark’s, which is part of its charm because it's not out there, it's not anything crazy, but it appeals to a very specific kind of person. It appeals to the people that are looking for the old school kind of club with a touch of glamour. They're looking for privacy, a certain high level of service and an understated British elegance.

The Mark’s Club members are very unique and they love it. They absolutely love it. So I think that the way to be successful financially is to find your mission, to find your vision that is unique from your competitors and stick to it. And it's not going to be enough to be fashionable, cool, and have an amazing designer, an amazing architect, and an amazing chef. It's not enough. You really have to pick your members, and satisfy their needs.

As a follow-up to that question, since you've worked on both hotels and clubs, is the fundraising process from an operator's perspective different between a club and a hotel and how so?

The hotel model is very simple and it's the more profitable one, at the end of the day. The main difference is that club models allow membership fees to flow directly to the bottom line, creating a sense of financial safety. While hotels need to be operationally and financially successful to survive, it's also a healthier business model because you don't have to rely on an inflow of fees. In terms of raising capital, I think that with a good hotel brand, it's easier.

There are so many brands in private members clubs now, that I think it's going to be increasingly difficult to raise capital for them as we go on, unless you're powered by an amazing brand such as Cipriani or something similar, which is always going to be easy. People are going to literally come to you, approach you to open anywhere. And that was the case for the most part with Cipriani. When I was at Casa Cipriani Milan, we got approached so many times to open in Madrid, to open in Paris, to open in so many places. But they want to pick their next venues very carefully so they don't just open anywhere. In general, if you have a strong brand, it is easy to raise capital. 

If I ever had to pick an easier business model, it would be a hotel with a very strong brand. I think that's quite a sustainable business model - once you structure the operations of a hotel and you have decent management, the business runs itself and the margins are great. And again, clubs have a few challenges to be operationally profitable, and it’s not always easy. Many clubs around the world survive purely because of membership revenue. I mean, that’s nothing new for people in this world. It’s normal for clubs to get to a point where they function on membership revenue and then get to a tipping point where it's not enough. Then it’s a vicious cycle because the members weren't the quality people they were looking for. And slowly it dips and members don't want to go as much. It was a snowball effect that happened to certain clubs.

So just to conclude: a strong brand - one with a great reputation, heritage, track record of success, and solid marketing strategy - will be easier to raise capital for hotels.

Favorite hotels or restaurants?

My favorite city hotel is the Hotel Costes in Paris: I love the buzz and excitement you feel when you are there. But I also love old school, charming properties like Claridge’s and the Ritz.

One small hotel that I love and I would love to mention is Palazzo Arone dei Baroni di Valentino in Palermo, a boutique B&B inside a beautiful historical home. Another special hotel is Can Cera in Palma de Mallorca. It has a sexy, elegant and stylish vibe without too much glamour.

My favorite restaurants: I love Bacaro Montenapoleone, a small hidden gem in the heart of Milan, and my favorite restaurant during my years in NYC was Gennaro on the upper west side. It’s a simple and wholesome Sicilian restaurant.