The big news at The Lodging Conference, which concludes today in Phoenix, was branding. Two new potential chains, Virgin Hotels and B Hotels & Resorts, were unveiled at the event at the Arizona Biltmore. While launching a new brand in the midst of the industry’s current downturn may seem counterintuitive, it may prove to be smart.

“We’ve been looking at launching a hotel brand for several years, but it makes sense for us now for three reasons,” says Anthony Marino, managing partner of Virgin Group’s leisure and hospitality sector. “The Virgin brand has a lot of momentum and customers in our other businesses have been telling us to get into the hotel industry. Also, we believe there are lots of opportunities in hotel real estate now and in the near future. And, finally, we believe we can bring something different to the marketplace.”

Virgin comes to the marketplace with a huge war chest—$500 million of its own money and funds from partners Alberto Beeck and Diego Lowenstein—that it will use to launch the brand and develop and/or operate up to 25 hotels in the next seven years. The Virgin concept, while still in the development stage, calls for a chain of four-star lifestyle properties that leverage Virgin’s DNA of high-style, service-oriented and customer-centric consumer products.

While Virgin is new to the hotel business, it has two well-seasoned pros on its team. Capstar Hotel Co., President and CEO Paul Whetsell has advised Virgin as it developed its launch plan and will consult on operations and acquisitions issues. Virgin also hired former Desires Hotels President Raul Leal as president and COO. His job will be to develop Virgin Hotels’ operational standards and the brand on a daily basis. A top priority for Leal is service.

“It will be the most important component of the brand,” says Leal. “We’ll hire associates and managers who take joy in serving others. They’ll need to be irreverent, entrepreneurial thinkers who want to be empowered on behalf of the guest.”

Virgin plans to grow through a variety of vehicles, including joint-ventures, equity placement and third-party management. Leal says the first property should open in the next 12 to 18 months. Initial targets will be gateway cities in the U.S., followed by expansion to Europe, Asia and other parts of the world.

The other brand launch, B Hotels & Resorts, included a splashy poolside party at The Lodging Conference. This brand’s concept is more fully formed than Virgin, and its first property opens in December in Fort Lauderdale, FL. The chain will focus on conversion of existing flagged or independent hotels to one of three designations: Hotel, Resort or Boutique. Initial target markets will be urban and resort locations in the U.S.