The sound of money

“I am able to find calmness and solutions. I am in my zone. I don’t think I’ve felt this good, especially since the last two years,” he says.

For the founder of FIVE Holdings, there is a lot to feel good about right now. Not just the 1,500 hotel rooms between FIVE Palm Jumeirah, FIVE Jumeirah Village, FIVE ZURICH and FIVE LUXE (soon to be opened), but a $320m stake in the legendary nightlife company Pacha Group – one of Spain’s largest hotel and night club names.

Originally launched as SKAI Holding in 2011 and rebranded as FIVE Holdings in 2017, Mulchandani’s flagship FIVE Palm Jumeirah opened the same year. In a city that now has more hotel rooms than Las Vegas, he has done the impossible: Create a brand-new hotel from scratch and make it one of the most talked about on the planet. His hotels have struck gold by focusing heavily on entertainment and experiences, with the fancy hotel rooms almost a sideshow.

It has also been a financial masterstroke, with profits of $51m just in the first six months of this year, a 43 percent rise on the same period last year. It has EBITA margins of 41 percent, more than three times that of some of its biggest competitors and is heading for a $2bn IPO in Dubai in 2025. The sound of music at the legendary FIVE pool parties, the sound of money in the boardroom.

“What we’ve been able to do exceptionally well is entertainment hospitality. This is a Disneyworld for adults. Alongside that fundamental journey, we’ve also built a highly sustainable product,” he says, adding: “When we started in 2017 it was just about making it work. You have all these super strong competitors with huge market share, so you look at what space nobody is in. And nobody was in this space. The way we designed our hotel, with a lot of F&B, was always for entertainment. But I don’t think even we estimated how strong our story could become.”

When he launched the flagship Palm Jumeirah in 2017, many critics wrote it off as just another new hotel in Dubai, the emirate now being home to 151 five-star hotels. “I was always sure we would do better than what was happening already. Was I nervous and scared, and having all those emotions of fear and feeling overwhelmed? Yes, but how we deal with our fear is part of being an entrepreneur. Did we know what we were doing? No. But I think we adopted a way to say let’s build the consumer experience first. If we build an amazing consumer experience, we will always find a way to make money out of it,” he says.

Mulchandani went full force into the entertainment side of hospitality, making his hotels the go-to place for a good time. International super star DJs, A list celebrities, the best restaurants, the best live music and a massive push on social media – long before other hotels were doing the same.

“We used social media to build authentic content, which helped us build a community. It was consumers marketing to consumers,” he says, adding: “It’s about the promises we make and the promises we keep. I feel we have reached a stage where we have fans. In music, people say ‘I am going to that concert, I don’t care how far it is or what it costs.’

“I think we have fans who are so connected to the brand, they will not stay anywhere else.”

Mulchandani also has no shortage of financial fans. In early October the company listed a $350m green bond on Dubai’s Nasdaq, with the proceeds used to fund the Pacha deal. More importantly, it has given FIVE its first taste of regulated corporate life, ahead of the planned 2025 IPO.

But, Mulchandani says, the company’s stock market listing isn’t being done for the usual purposes of fund raising and expansion. “We are all in this together, we don’t really need to do an IPO for money or growth. We are generating a significant amount of cash. The real reason is the employee stock option programme. I have moved $200m worth of my shares to be given to the employees. This was done after the bond,” he says.

Which means that approximately 10 percent of the company is being handed to staff – everyone from the front desk to the CEO.

“I think this will give them a sense of ownership,” says Mulchandani. What it will also do, he says, is create “around 50” new millionaires in Dubai, all of them staff and working at various levels in the company. As far as tips for the staff go, it doesn’t get any better.
FIVE Holdings has also changed the game when it comes to sustainability. Not just fancy talk but serious action. The company boats 1,500 LEED platinum hotel rooms compared to just 2,050 across the USA in 2022.

In the entire USA the average luxury resort has a carbon footprint of 78Kg CO2e per occupied room night. FIVE’s carbon footprint is over three times lower at just 24 Kg CO2e. FIVE has also emerged with the highest ESG rating in the world to date, as the only company to receive an ‘A’ grade across all sectors from global rating agency, ISS.

And both FIVE Palm Jumeirah and FIVE Jumeirah Village ran entirely on solar power throughout last year and this year. “These numbers are better than you will get from some of the biggest brands in the world, and I don’t mean just in hospitality,” he says.

But just as he is relentless in growing the business, Mulchandani is equally focused on giving back. Over the past seven years he has worked closely with a number of charities, foundations and organisations, focusing on social justice, health, education and economic development. Partnerships with the Diya Foundation, Sir Ganga Ram Hospital and New Face Medical Trust have seen him support over 800 lifesaving heart and facial surgeries, till date. FIVE also supports Room to Read Foundation, an international non-profit promoting gender equality through literacy.

Mulchandani’s business success has come with no shortage of perks – FIVE even has its own branded private jet – but the more you talk to him, the more you get the sense that this is no longer about just the money. “I am definitely calmer. I don’t think I’ve ever been in as much of a flow as an entrepreneur as I am right now,” he says.

He admits there have been some “regrets” on the journey to the top, but luck has always played a big part. “Over the last two years, I have been very lucky with some good calls. You can’t take luck out of the equation. It’s just arrogance to believe you can create success just through intelligence. Maybe luck follows the brain, I suppose luck has a way of finding you when you’re giving it all you have.”

As for FIVE, there is no doubt the empire he created has changed the hospitality sector for the better. But what about Mulchandani himself? Has he changed much? “Yes. I like to hear people and listen to their opinions. Maybe I didn’t before. The real tragedy is not to listen to people.”

With an IPO to come, expansion in Ibiza and soaring profits and revenues, plenty of people are listening to him right now.