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More than a bed

Published: 01/03/2015 - Filed under: Home » Archive » 2015 » March 2015 » Special Reports »

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For business travelers deciding on where to spend the night, this is the best – and most fragmented – of times. New hotel brands are being rolled out at assembly-line speed, bearing trendy names that read like smartphone apps but with the vowels intact, like Haven, Cordis, Quorvus and Unscripted. 

A booming lodging industry is in the midst of a diversification whirlwind as it targets a new generation of traveler that might be defined by age, mindset or craving for experience. Combine that with a resurgence of independent hotels and the explosion of sharing options like airbnb and it makes for a bountiful but potentially blurry menu of lodging options.

“There are business travelers who function similarly to the way they did a decade or two ago,” says Bjorn Hanson, clinical professor at NYU’s Tisch Center for Hospitality and Tourism. “But there is a new business traveler and the challenge for lodging is to respond to both demographics. The traditional brand was all about uniformity and standards no matter where you are,” says Hanson. “The same color palette, art, room service menu and wine list. Today even for more traditional business travelers, that sameness has become a negative. To most travelers the hotel is the highlight of their stay.”

One reason for all the activity is that business is good. A survey by PKF-HR Hotel Horizons reported a record 70.4 percent occupancy for major markets in 2014, eclipsing the mark set in 1996. And the consultants forecast that record will be broken again this year and in 2016. So despite a ramp-up in supply after years of stagnant growth, the result will be increased pricing for the foreseeable future.

Tapping into the Experience

While Conrad Hilton’s classic lodging credo of “location, location, location” still holds, it now partners with “experience, experience, experience” as hotel operators seek to make even a business travel stay memorable by establishing an emotional connection with guests.

“We create relationships,” says Samuel Leizorek, managing partner for Las Alcobas, a boutique hotel in Mexico City, “and those relationships are always better than what’s new and flashy. We don’t operate on there being a difference between the leisure and business traveler. They may spend a few hours a day doing different things but they all want a good rest at night, a fantastic breakfast and amazing amenities.”

According to Toni Stoeckl, Marriott’s vice president of lifestyle brands, “For Marriott, it’s about going beyond the functional aspects of a hotel stay and infusing that stay with an experience that connects with you on an emotional level, that you want to share with others. We would love for our guests to be raving fans of their experience.”

Christie Hicks, senior vice president, Starwood sales organization, agrees that the hotel stay is about having a relationship with the individual. “Do you have the right technology for that specific person – whether they want to be continuously connected or not. One business traveler might be social and want the option of active public spaces while the more solitary traveler will want a room that gives them everything they need. We have to satisfy all of them.”

Food and beverage (F&B as hoteliers say) have taken center stage in the experience game as millennials are perceived as the first generation of foodies.

At AC Hotels, a European chain acquired by Marriott last year, “the focus is on B&F rather than the traditional F&B,” says Stoeckl, “as travelers seek out craft beers and custom-made cocktails. “ He adds, “It’s about the stories guests can take with them – discovering new drinks or local artists whose work is exhibited in the bars and restaurants.”

At Hilton’s new lifestyle brand, Canopy, there will be complimentary nightly tastings of local craft beers, wine or spirits. The café bar will take the spotlight for serving small bites and beverages. And the hotels will be providing free bikes.

And while boutique/lifestyle hotels have trumpeted the importance of design and hanging wall art, Jim Holthouser, executive vice president, global brands for Hilton, says, “We have identified the need to take the emphasis off of high-design and deliver exactly what the target consumer desires: an energizing comfortable stay with more included value.”

Millennial Madness 

The hospitality industry’s obsession with millennial travelers has become something of an inside joke, except the stakes are serious. “These changes have nothing to do with age or generation,” says Lalia Rach, partner in Rach Enterprises and a popular speaker at industry events. “For the business traveler it means being able to function the same way on the road as at home. Our lives have become blended; there’s no separation between road and home, between business and leisure.”

At Hyatt’s new Centric brand, says spokesperson Amy Patti, an inside-out approach to the concierge will make a local ‘navigator’ out of every employee. “This has changed the roles of our hosts,” she says, “who need to interact with guests differently and rely on their personality/interpersonal skills rather than just their ability to execute front desk tasks.”

Not surprisingly, much of the millennial outreach involves technology. Hanson says that hotels will have to maintain traditional features like a front desk – generally preferred by older guests – while giving millennials the choice of checking in at a kiosk or using their smartphone at the room door.

In what seems a direct outreach to millennials, Javier Rosenberg, Carlson Rezidor Hotel Group’s COO for the Americas, says the group has recently launched #BluRoutes which provides guests of Radisson Blu hotels “access to the best running routes that begin and end at the hotel; we are also working to enhance mobile apps to increase service offerings and concierge capabilities – and even to control the guest room environment.”

Hilton, according to Holthouser, has introduced the “digital lobby,” which allows guests to check in and choose their room before arriving at the hotel. And this year, the brand will roll out technology that will enable guests to unlock rooms with a mobile device. The front desk will be “repurposed – a shift from one of transaction to one of genuine hospitality.”

And at the recently redone and debranded Hotel Irvine in California (previously a Hyatt), a new “Reach Me” program offers a personalized text concierge which allows guests to text a request – everything from inquiries about the neighborhood to car service to room service – and receive an instant response.

Buzzword or Watchword? 

With 1,000-room hotels calling themselves boutiques and many new brands pitching themselves as “lifestyle” lodging, have these terms lost meaning? Many believe so, but insiders are still trying to sort it out. 

“I personally think the term boutique has been abused over the years and I am not sure that everyone that calls themselves a boutique truly qualifies as one,” says Rosenberg, adding, “The lifestyle segment is growing and gaining popularity simply because guests crave a unique and memorable experience when they travel, even when it’s for business. Gone are the days when a traveler wakes up to the same curtain and carpet, not knowing whether they are in Aruba or Dallas.“ 

“We were first with a boutique brand,” says Hicks, “and it means different things to different people. It doesn’t have to mean hip and cool; it can mean calm and collected.”

Hanson says the discussion about defining boutique and lifestyle is important because travelers are selecting hotels for their unique attributes. “My definitions,” he says, “are that a boutique hotel is about the hotel – its location, architecture, design and history. A lifestyle hotel is about the traveler and his or her demographics. Some brands, like Kimpton, have managed to do both – create a cool image without it being about an individual hotel. They sell hotels with a point of view.”

And in a demonstration of one big brand aiming to get in on that coolness, Kimpton has been bought by IHG, operator of Holiday Inns – with promises of leaving the brand alone to do what it has always done – but with the support of IHG’s global resources.

Rach says boutique and lifestyle operators are appealing to both younger and older travelers who want to feel young. “We all want to feel that we’re still hip, we’re still in. And we’re talking about people in their 40s, 50s and 60s.” But again, Rach stresses that functionality is key: “At the end of the day if the hotel doesn’t allow you to do business, you are not going to give them your business.”

The Numbers Game

Independent hotels, partly because of the leveled playing field created by the Internet, have found themselves in a desirable position – able to prosper without branding. As a result, many multi-brand companies have launched collections of independents, including Carlson’s Quorvus, Hilton’s Curio and Marriott’s Autograph. 

Even Loews, a small chain, has created a collection called OE, which stands, not surprisingly, for Original Experiences. The pitch: Hotel owners get in on powerful booking engines and loyalty programs while consumers enjoy quirkier hotels but with big-brand support.

And the collections are not to be confused with global marketing networks like Preferred Hotel Group which, with over 650 locations worldwide, is far larger than its new competitors. Its chief competitor, Leading Hotels of the World, boasts 430 members – both groups with representation in dozens of countries. The mission for the companies is to offer hotels a stamp of approval, a promise of high standards although they are independent.

Some see a blurring of brands, collections and networks. Preferred launched a major brand-style loyalty program last year called iPrefer. “This was obviously geared to the business traveler, says Lindsey Ueberroth, CEO. “We can offer that program plus an opportunity to stay in hotels that don’t all look the same.”

One tiny independent that has done very well on its own is Las Alcobas. It has a mere 35 rooms but in five years has become one of Mexico city’s top hotels. Says Leizorek, “Everyone seems to forget that when people travel for business or leisure they are far from home. We are your second home in Mexico City. If you are a regular guest you can leave clothes or other items with us and we will clean them or take care of them.” Leizorek will open a second Las Alcobas in Napa, CA, in 2016. 

But even Leizorek has decided to join forces with the Luxury Collection, Starwood’s assemblage of posh properties. 

Airbnb Goes B to B 

Airbnb, the giant of residence sharing services, has taken aim at business travelers with a targeted web portal and other initiatives. Marc McCabe, business travel lead, says, “We realized that ten percent of our guests were on business and we needed to address that.”

A number of corporations have signed contracts with airbnb to facilitate their employees staying at airbnb locations – not so much negotiating rates as aiming for transparency and to deal with issues like security. And last year airbnb signed a much-heralded deal with Concur, the expense management giant, in a direct move to reach business travelers.

McCabe says that 15 to 20 percent of airbnb rentals can be booked instantly, although he adds even business travelers “like to develop a relationship with their hosts before arrival.” And McCabe says airbnb may seek to compete with hotels by offering a loyalty program of its own.

Ancela Nastasi, a New York-based lawyer who has created a company called iHost which helps airbnb hosts manage their operations, explains the appeal to business travelers this way: “One advantage is substantial cost savings over a comparable hotel. Second, the traveler will find a unique and individualized stay. And third, many business travelers want to see and experience a city as a local would, so airbnb is ideal. You could have a sterile kind of day in a boardroom, then come home and relax in an actual apartment.” 

While traditional hoteliers may be fighting airbnb, others see it as just another competitor. Says Bashar Wali, president of Provenance Hotels, a small group of boutique hotels, “Airbnb is here to stay; it forces us to be better and offer local authentic experiences.” 

Back To Basics 

With all the hubbub about a new kind of hotel, some fear overlooking the basics. “We’re in 2015,” says Rach, “and we still see many hotels without numerous and convenient plug-ins for devices. How many hotels say they are geared to business travelers but where you have trouble connecting to the Internet; or who don’t have someone you can call if you’re having trouble. None of that is earthshaking but all important to the business traveler.”

“We won’t sacrifice creature comforts to be cool,” says Wali, adding, “A business traveler doesn’t want a sexy lobby but then a room with an uncomfortable bed, a funky showerhead and mediocre WiFi.“ But even with its focus on the fundamentals, Provenance does cool things as well.

And little things can mean a lot. Rach says she was at a hotel in Washington, DC, recently where ”they had a little note on the hanger saying they would iron any piece of clothing quickly for $5; and the service was available from early morning to late evening. That is one of the nicest things you can do for a business traveler and it doesn’t take a lot to make it happen.”

“Business travelers,” asserts Rach, “are looking for an efficient use of time rather than a peculiar design by a hotel trying too hard to be different.”   

By Harvey Chipkin


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