The other day, MBW noted that Universal Music Group is targeting a 25% annual EBITDA margin over the next few years – and that it’s likely to need to explore innovative new revenue streams to get there.
Exhibit A: Over two years since announcing that it was making a foray into the hotel business via a partnership with investment group Dakia U-Ventures, UMG has now opened its first “music-based experiential hotel” in Madrid.
The UMUSIC Hotel Madrid is now operating at full capacity after opening its doors on November 14, 2022, at a 60% capacity, UMG-run website uDiscoverMusic confirmed on Monday (January 9).
The first-ever UMUSIC Hotel is located inside the historic Albéniz Theater building in the Spanish capital. The theater, inaugurated in 1945, closed its doors in 2009. Its owners originally wanted to demolish the building and replace it with a luxury residential building, but a group of citizens banded together to stop the demolition, which was granted in 2016, uDiscoverMusic says.
As a result, negotiations for what is now the UMUSIC Hotel Madrid started, according to the report.
UMG launched the UMUSIC Hotels brand in October 2020, at a time when the hotel industry and the whole hospitality sector was still reeling from the COVID-19 pandemic.
However, Spain wasn’t its first location target. UMG and Dakia identified the first three locations as Atlanta, Georgia; Biloxi, Mississippi; and Orlando, Florida.
The Mississippi hotel is expected to be completed this year, said Robert Lavia, Chairman at Dakia U-Ventures, at a press conference in 2020. The executive revealed at the time that the UMUSIC Broadwater hotel complex is valued at $1.2 billion.
Each UMUSIC Hotel is planned to draw inspiration from where they were located, promoting their local cultures, UMG said earlier.
“UMUSIC Hotels will both highlight these cities’ rich music heritages and provide new opportunities for artists to reach fans in immersive, innovative and authentic ways.”
Bruce Resnikoff, Universal Music Enterprises
“Through music’s unique power to inspire and unite – especially given UMG’s unparalleled roster of artists and labels – UMUSIC Hotels will both highlight these cities’ rich music heritages and provide new opportunities for artists to reach fans in immersive, innovative and authentic ways,” Bruce Resnikoff, President and CEO of Universal Music Enterprises, said at the time.
Unlike traditional hotels, UMUSIC Hotels offer fans, guests and artists with immersive music experiences, incorporate elements of the local music scene, says UMG.
To celebrate the launch of UMUSIC Hotel Madrid, Antonio Banderas’ take on the musical Company will be showing at the theater until February 14.
It will be followed by Spanish singer-songwriter David Bisbal’s 20th music career anniversary show, which will take the stage for 20 days between March and April.
A one-night stay at the UMUSIC Hotel Madrid costs around EUR €266.00 to €392.
Aside from a theater, the 130-room hotel also features a fitness room, an outdoor pool, a bar ampitheater, three meeting rooms, a two-level solarium, a rooftop bar, an onsite restaurant, an event space and a pool bar.
The hotel joint venture between UMG and Dakia builds on their previous agreement signed in August 2019 to create immersive music experiences.
The companies have also planned on identifying other potential projects including “next-generation retail.”
UMG’s entry into the hospitality sector comes as the music company expands its revenue sources. In recent years, it delved into the NFT space, the medical sector, fitness technology, and social media, among others.
Music Business Worldwide