• Consumers crave experience 

Food, beverage and experience were the essentials for any lifestyle hotel, attendees at the Hotel Alternatives Event 2019, hosted last week by Hotel Analyst, were told.

Experiences were increasingly being demanded by guests and were seen as key to creating lasting loyalty, heard delegates at the conference held in the Jumeirah Carlton Tower in London.

Cédric Gobilliard, SVP, lifestyle division, AccorHotels, said: “The lifestyle hotel is all about F&B&E – food, beverage and experience. When you create a lifestyle hotel, it is a social club, a community with shared values – it’s not fake at all. Forget about being a hotelier, focus on F&B&E and focus on creating a hotspot.”

Commenting on the group’s Jo&Joe brand, Gobilliard, said: “Jo&Joe is a mix between huge F&B product – 50% – and a mix between travellers and locals. We don’t need to invest in marketing, it will be social media which spreads word of mouth.” The brand was created in part as a response to Airbnb, with Gobilliard commenting: “Airbnb has had a positive impact on AccorHotels. We realised that it was a new experience and gave people new expectations. They think global, but act local. They digital, but they want to be social. They are selfish, but want to share everything.”

Commenting on the role of loyalty programmes in the brand, he added: “My community doesn’t need the loyalty programme to be engaged. It’s important for AccorHotels, but it’s not so important for the community.”

Ben Livingstone, CEO, Graystone Action Sports, the adventure sports group, said that he felt that loyalty programmes were outmoded. He said: “As long as people feel something evolving they’ll always come back, but loyalty cards are on their way out.”

The panel pointed to the difficulty of creating authentic experiences. Tom Chalmers, design director, SACO, said: “We call it meaningful experience, past the classic wine tasting or bus tour. We’re trying to imbue emotions, to do something a bit deeper. You have to partner with true believers, you can’t do this ourselves. We create an eco-system of experience.”

Livingstone responded: “Our product is not a warehouse full of birch ramps but that’s not our product, it’s about giving people the experience and be taught and be better. You get something to take away, a skill.”

Alternative hospitality assets were seen as being in a strong position to offer loyalty-inducing experiences, in particular in the co-living and co-working sectors. Gerard Greene, CEO & founder, Our Society said: “When we look at hotels they are very transient spaces and they have spaces where they might bring in F&B. Residential often has lots of amenities but someone at the door to stop you getting in. But co-living looks for more curating and can offer more. There is a massive opportunity to draw investors and people from the hotel industry because there’s a lot to bring to the party [in the alternatives sector]. The integrity and authenticity of a brand is what will ultimately drive the long-term success of the brand.”

Greene warned that experience in residential rather than hospitality could put some co-living developments at risk. He said: “Developers are so used to building and selling. There are very low, or no sinking funds. No thoughts on corridors, back of house and then what happens is that people are piling in on the basis of P&L accounts without a capex budget. So what happens in three years’ time to their rental rates when there is more competition? The residential market had one-year rolling contracts, so there is an education to be had from the hotel sector in the form of management contracts. The residential industry has got a long way to go to understand the value of the brand. There’s no room for leases because of the yields.”

Adela Cristea, senior director, head of business development, UK & Ireland, Radisson Hotel Group, said that the company was moving into co-working as a result of owner demand. She said: “Public spaces are the first impression when you come to a hotel and the last when you leave which makes them so important. We think that Radisson Red would suit co-working. We have entertainment spaces in the lobby, pool tables, foosball tables. People want to work in the lobby, rather than at a big table.

“Being flexible and creative and thinking out of the box is key to success. We at Radisson are being very flexible. We are happy to lease out space if the owner wants different F&B or lease out space in the lobby for co-working space. It’s owner driven. We think brands are here to stay but we need to adapt and cater for what the owners want.”

HA Perspective [by Katherine Doggrell]: What the owner wants, of course, is more cash for gold cars and helicopters and while they may very well want co-working spaces, they are likely to want them in the belief that they will bring in more cash. Other hotel companies are also looking to monetise the trend for people coming into their lobbies and drinking lattes ever so slowly while they use the free wifi and one way is to call it co-working.

Much of the debate around experience was how to do it well, in a manner the guest won’t find contrived and won’t cost too much. As Chalmers noted, the right partner goes a long way. If you want to have yoga in your hotel, all you need is the space and an amenable yoga teacher, who guests can pay. The AccorLocal programme looks at making the most of amenities and services which, by and large, the hotel already has.

Greene quoted Starwood Capital founder Barry Sternlicht, who said that customer services about ‘how to not fail your customer’. It’s about getting the basics right.

Additional comment [by Andrew Sangster]: There were two key highlights for me in this, our fifth Hotel Alternatives Event. The first was the range of hospitality professionals popping up in all sorts of diverse real estate verticals and in other experience economy businesses.

Examples of the hospitality professionals include Gerard Greene, the former CEO of Yotel, who is now creating a co-living concept Our Society; Robert Ryan, a former development manager at Travelodge is now chief real estate officer at office specialist Techspace; and Ben Livingstone, a former hospitality consultant is now CEO of Graystone Action Sports, a next generation sports facility in Manchester.

The second highlight was understanding just how rapidly the experience economy is reshaping the real estate landscape. Hospitality and hospitality-like services are now the key to the future in everything from offices to retail to residential. All the big trends such as co-living and co-working have at their core a hospitality element. The panel session on this topic featured office provider Knotel (the hospitality connection is clearly in the name), a serviced apartment provider who is now developing a co-working nursery concept called Cuckooz Nest, the previously mentioned Our Society and Radisson Hospitality, a global hotel brand player who is spotting the activity in some of these sectors and is getting increasingly involved.

I used to talk about how silos were being broken down and boundaries blurred. I increasingly think it is now more relevant to talk about how the hospitality virus is infecting nearly all real estate (industrial has so far proved resistant). There is a break out of hospitality fever across the property sector.

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