Virgin's Sir Richard Branson: Ode to Abstinence
Sir Richard Branson (left), chairman of Virgin Atlantic Airways, stopped by the Travel + Leisure offices recently to chat with managing editor Mark Orwoll (right) and other staffers about the multifaceted Virgin empire.
Those of us who count among life's touchstones war protests, rock festivals, love beads, and hitchhiking trips abroad always appreciate it when an old hippie makes good. But there's good—and then there's Richard Branson. A shrewd CEO with the looks of a 1970's Guitar Hero; a shameless self-promoter who, in person, comes across as almost painfully shy; a visionary who is a self-admitted Luddite; a record-setting transatlantic hot-air balloonist and world traveler who has never been to South America: Branson is contradiction personified. But by seeking out businesses and challenges that personally appeal to him (Virgin Atlantic Airways, Virgin Megastores, bridal emporiums, limousine services, wineries), he has focused his business interests in a way that also appeals to millions of consumers the world over.
Still, despite the spreading tentacles of the Branson empire, travel in its many forms remains at the heart of the company's success. The founder of Virgin Atlantic and its multiple offshoots was in Manhattan on May 4 to unveil the new Virgin Clubhouse at Kennedy International Airport, a 5,800-square-foot passenger lounge in Terminal One filled with Warhol paintings, video monitors, portable DVD players, PC's with Internet and e-mail access, and an interior designed to evoke the fun, flair, and diversity of New York City itself. When Branson and his publicist, Sharon Pomeranz, arrived at the T+L offices and were shown into our conference room where breakfast was laid out, I was delightfully surprised to find the handsome billionaire dressed in casual slacks and open-neck shirt, tentatively nibbling a strawberry, looking more like a Saturday-morning gardener than one of the world's wealthiest and most successful entrepreneurs.
Sir Richard (he was knighted in December 1999) and I, along with several other T+L editors, chatted for close to an hour on topics ranging from the growth of Virgin Air and the strains of running a railroad (Virgin Rail), to his plans for his growing hotel empire and why, in his words, he is "computer illiterate."
The 49-year-old Branson, despite having scores of companies that carry the Virgin brand, still seems to pay closest attention to his airline. "In July we're beginning service from London to India," he said. "We're also aiming to start new service within Australia that month." When I said that July was a big month for him, he wearily put his hand to his forehead and said, "Don't remind me" (referring to his upcoming 50th birthday).
The Australian venture may prove to be tough going for Virgin. The new airline, dubbed Virgin Blue, will compete on a number of inter-city routes with biggies Ansett and Qantas. "But I believe we're going about it the right way," Branson said. "We'll be charging only about a hundred dollars Australian one-way between Melbourne and Sydney—what's that, about fifty American?—so the pricing is very attractive. Our name is very strong in Australia, and there seems to be a lot of enthusiasm for us coming into the market, from the airports and from travelers. Of course, we're still in the honeymoon period."
Several years ago, an upstart discount airline called Compass attempted to do the same thing in Australia that Branson is hoping to do now, but that company ended in failure, despite the fact that Ansett and Qantas back then were not nearly as strong as they are nowadays. Branson, however, believes that his business plan, which includes new 737's painted Virgin red, will be successful. (The name Virgin Blue is a pun on "Bluey," Aussie slang for a redhead.) "We'll have one of the newest fleets in the country, which will be attractive, and we figure we can be profitable on a 75 percent load factor."
Branson hopes the Australian enterprise will be another in his long line of success stories—especially now, since he's hit a few bumps in the road of late. Virgin Cola, which he launched in the United States by driving a vintage tank into Times Square to aim (literally and figuratively) at the world-famous Coca-Cola sign there, has failed so far to burp its way into America's soft-drink psyche. Virgin Rail, which Branson created to take advantage of the privatization of British Rail several years ago, has been called "a national disgrace" by at least one politician and is often criticized for its poor on-time performance record. Virgin Air was informed in April that it would lose a slot on the London to Cape Town route, leaving the airline with only one flight per week on that route compared with British Airways' seven.
But every time Branson's business bubble is poked on one side, it bulges on the other. Take his hotel/resort business, called the Virgin Limited Edition, which is growing at a moderate but healthy pace and cementing the Virgin brand's reputation for high-quality products. Limited Edition now comprises five resorts (including Sir Richard's private home on Necker Island in the British Virgin Islands, England's Le Manoir aux Quat' Saisons, La Residencia in Mallorca, Palazzo Sasso in Italy, and South Africa's Ulusaba Private Game Reserve) and the Roof Gardens, a private club in London's Kensington neighborhood.
"There's this neat Australian couple that you really ought to profile," he told me, his face beaming at the thought of them. "They used to run Necker Island for me. Now their job is to go to the most beautiful and exotic spots they can and find more Necker Islands for me, places where we can have new hotels. That's how they found Ulusaba, which is like Necker Island except it's surrounded by jungle instead of being surrounded by the Caribbean. Trouble is, there aren't many places like that left in the world."
But it's not only the Australian couple that scouts new resort locations. "Our next project is called the Casbah Tamadot, in the Atlas Mountains outside Marrakesh. It's an old fort. Actually my parents found that one for me while they were following one of my balloon trips. They came back after visiting it and said that if I didn't buy it they'd kill me."
Throughout our interview, Sir Richard (he giggles a bit when you call him that) exhibited an occasional bashful but toothy smile. His voice, pleasant but innocuous, hardly wavered to either side of what can only be called mildness. His famous sandy hair, studiously mussed and now edged with gray, brought to mind an aging surfer boy more than a go-get-'em world business leader. His style in clothing owes more to Sears than to Brioni. His demeanor is not so much shy as self-effacing, and his answers to questions are never assertive but almost always hesitant, sometimes bordering on inarticulate. And yet it would be difficult to sit across the table from this man and not be charmed utterly.
Wherever the future leads Branson, and wherever Branson leads Virgin, he will insist that his businesses be creative, cutting edge, high-tech—whether that means using high-speed tilt-technology rolling stock at Virgin Rail or, at Virgin Air, using the very large double-decker Airbus A3XX long-haul jets once they roll off the assembly line. ("Maybe I could put in a couple of Jacuzzis for the passengers on those," he said, only half in jest.) Ironically, considering his reputation as an innovator, Branson himself is remarkably low-tech. "I don't use a Palm Pilot," he said. "Instead I just have these big fat address books I carry around." While he does rely on his cell phone, he has not yet, on a personal level, embraced the Internet. "I must confess that I'm computer illiterate," he said, despite the fact that Virgin and all its multifarious subsidiaries maintain a vast presence on the World Wide Web (www.virgin.com).
Branson's never-ending habit of buying existing businesses, revamping others, and starting new ones, all under the Virgin name, led me to ask him what many people wonder: When does the concept of "extending the brand" devolve into a potentially deadly dilution of the brand name?Sir Richard smiled mischievously, like a naughty schoolboy caught scratching his name into his desktop with a penknife. "I suppose it's mostly a matter of my being interested in something, an idea that sounds appealing," he said. "And I have many interests."
That point of view isn't exactly one of the business models they teach at Wharton (not that Branson ever attended business school), but so far, after some 30 years as an entrepreneur, the Virgin chief has developed a theory of business that few people can quibble with. At least, not when the theory is put into practice by a man like Sir Richard Branson.