Hotels go beyond bedsheets to attract guests
The lobby at a Tryp by Wyndham hotel in Fort Lauderdale emphasizes local maritime culture.
Continued economic and job growth have been a boon to hotel operators, who are seeing steady demand from both leisure and business travelers. Deloitte is predicting a robust year ahead for hotels with growth between 5 and 6 percent that will push the volume of gross bookings for the year to a record high of $170 billion.
Yet hotel brands and operators also are in the midst of a sea change as they respond to competitive pressures from the likes of private players such as Airbnb and HomeAway, increased innovation and technology and changing customer demographics and behavior.
“Our demographics are getting younger and whether it is hotel design or technology at the property, we have to make sure that we are competitive in giving them what they need,” says Aly El-Bassuni, senior vice president of franchise services for the Americas at Radisson Hotel Group.
Hotel brands across the spectrum of limited service, mid-priced and luxury are adapting to the latest market trends that include the following.
1. It’s a lifestyle
Just about every hotel company in the industry has rolled out a new “lifestyle” brand. Rather than catering to a specific demographic or age group, such as millennials or baby boomers, lifestyle marketing takes a broader view to sell products and services that cater to a particular lifestyle—groups that have shared interests, attitudes and favorite activities, such as the outdoorsy set or people obsessed with the latest technology.
Hotels are weaving those lifestyle attributes into the fabric of properties in terms of design, décor, food and beverage offerings and amenities. “Ten to 15 years ago hotels were about comfort, good bedsheets and pillows and a big TV. Now it is about the experience that you have,” says Rodrigo Azpurua, president and CEO of Riviera Point Development Group, a Florida-based developer that has built hotel brands such as La Quinta Inns & Suites, Radisson Red, Comfort Inn and Wyndham Hotels & Resorts.
For example, Radisson’s lifestyle brand Radisson Red is aimed at creating an urban, hip experience and it is using art, furnishings and music to convey that lifestyle experience for guests, notes Azpurua. Other lifestyle brands include the likes of Canopy by Hilton, Aloft and Element from Starwood, Marriott’s Moxy hotels and Hyatt Centric among others.
A. The lobby at a Tryp by Wyndham hotel in Fort Lauderdale emphasizes local maritime culture. B. This Radisson Red rendering at the Miami International Airport includes a special guest bottom right. (It’s Dr. Who.) C. The decor of the Hotel Indigo in Pittsburgh offers a glimpse of local history. D. This luxury suite in MGM National Harbor, Washingon, D.C., goes well beyond the norm.
2. Experience is king
Major hotel brands are continuing to roll out new concepts and redesigns that offer more of a distinctive, boutique hotel experience. “I think the brands have realized in the last four or five years that people are tired of the cookie-cutter hotels,” says Ignacio Edenburg, CEO of Edenburg Hospitality, which manufactures and supplies furniture and fixtures as well as the interior design for hotels across the U.S. and worldwide. “We have gotten to a point where the brand itself realizes that the flags need to be different and there needs to be a story to tell within the interior design.”
For example, IHG’s Hotel Indigo flag aims to create unique hotels that reflect a local area or neighborhood in details ranging from the design and décor to the menu in the bar or restaurant. Edenburg Hospitality worked on the interior design of the Hotel Indigo in Pittsburgh East Liberty, which opened two years ago. In addition to incorporating the city’s steel industry past, the hotel features décor and design touches that showcase the community’s history of theater, entertainment and philanthropy.
Wyndham has done the same with its TRYP concept and Marriott with Element. The new TRYP by Wyndham that opened in Fort Lauderdale last year includes a shark tank aquarium in the lobby.
3. Bullish on growth
The hotel sector remains on a steady pace of expansion. Nearly 180,000 rooms were completed in the U.S. last year, which increased total hotel inventory by 1.9 percent, according to Marcus & Millichap. The firm is predicting that supply will grow by another 2 percent in 2018, with the majority of new building occurring within the upscale and upper midscale segments. The majority of new projects are located in larger markets, such as New York City, Nashville and Dallas.
“We’re very bullish on growth,” says El-Bassuni. At its recent business conference in April, the firm announced a major “brand refresh” that will impact 160 Radisson hotels in operation and under development in the Americas. The company also said at the conference that it sees “significant” room for growth across all brands, and it also announced two new projects: a Radisson Blu hotel in Anaheim, California, and a Radisson in Times Square, New York City.
The comprehensive overhaul includes a new look for guest rooms and public space corridors and an overall new brand experience. “We’ve really gone back to our Scandinavian roots with simple designs, natural wood and color tones,” says El-Bassuni.
4. Sustainability the new norm
Building “green” hotels was a revolutionary idea 10 to 15 years ago. These days, sustainability is not something that only a few of the leading brands are doing—it is expected as the standard for all hotels, says Azpurua. Especially for millennials, who are now a key target market for hotels, sustainability is a key element in all aspects of a hotel from building design and furnishings to policies and practices.
Ten years ago, there were just 15 LEED certified hotel projects. Today, that number has jumped to 444—twice the number of LEED certified projects compared to five years ago with another 1,255 projects that are currently pursuing LEED certification, according to the U.S. Green Building Council.
Hotels are embracing sustainable practices because consumers are demanding it, and also because it makes sense from a revenue perspective in creating efficiencies and reducing costs for operators, says El-Bassuni. “I think it’s a healthy balance between thinking about environmental sustainability, but also about profit,” he adds.
5. High-tech and smart
Hotels brands are investing in tech that can both enhance the customer experience and improve operations. “Technology is one of the big changes in how companies are designing and building hotel rooms today,” says Azpurua.
On the consumer side, hotels are developing apps that can improve the guest experience. Apps allow guests to check-in and check-out of hotel rooms from their smart phone or mobile device. They can use their smart phone or device as the “key” to unlock doors, and apps also are integrating loyalty programs and points. Hotels are beginning to roll out technology that allows guests to stream entertainment from their device, such as Netflix and Hulu, onto their in-room television.
On the operations side, hotels also are investing in revenue management systems that utilize artificial intelligence and machine learning. Radisson expects to deploy its new artificial intelligence decision-making software at all of its hotels in the Americas by the end of the year. The software provides capabilities such as competitive benchmarking in terms of demand and competitive price shopping that gives operators and general managers support in making sure they are maximizing pricing in both low demand and high-demand periods.
6. Bye-bye business centers
Traditional business centers that used to be a standard hotel amenity are disappearing as more people travel with their own personal devices. “Providing that is really not relevant today. Any one of our customers walking in today has anywhere from three to four computing devices,” says El-Bassuni.
Instead the focus is on making it easier for guests to use those devices both in-room as well as in common areas throughout the hotels such as lounges, restaurants, club rooms and common areas. Oftentimes, the key to that is providing a great Wi-Fi experience. “It’s less about the technology that we provide and enabling guests to connect through best-in-class Wi-Fi and the ability to connect to their television,” says El-Bassuni. Hotels also are continuing to create comfortable common area spaces where people can work and socialize.