The below observation was written by Mr Mike Cantrell in response to “Public Spaces: Battleground of the Brands” and allows for an interesting discussion:
“I have seen a new C-level position pop up of late, CXO (Chief Experience Officer). These positions are being filled by hoteliers and with what means the blending of hospitality and retail experience, or in this case the lack of retail and more of a pure hospitality experience. With these lines being blurred, how do hoteliers combat this? My only thought is to fight fire with fire and create the same thing. Create a local experience tied with the hotel but with no rooms.”
In our own consulting experience, we have seen many parallel industry verticals hiring at senior levels to transfer this ‘technology’ into their operations.
Hospitality is regarded as a leading sector for customer experience design and operationalisation, especially within luxury segments. However, the flow of know-how has been largely one-way and these previously paralleled concepts are now beginning to converge- as my previous piece suggested.
Arguably, hospitality has been complacent and whilst innovation should and can circulate from industry to industry, hoteliers have been slow to adopt and adapt great customer thinking from retail and other models.
Personally, the idea of hotel brands opening facilities without rooms is appealing. However, the GP contribution comes from the rooms and as the question posed by Mr Cantrell suggests, the challenge is how to make hotels without rooms as a division make money.
This isn’t an unsolvable challenge.
Uber and Airbnb have both figured out how to make money without traditional inventory.
And unlike distributor startups that have to dedicate millions of investor dollars into brand building, hotels already have strong and established brands with global recognition, footprints and customer bases.
This is a foundation that every startup enterprise would be grateful for. Why is it, therefore, that there is barely a hotel brand I can think of that has really stretched its brand outside of its core business?
The co-working space has been a missed opportunity.
What Mr Cantrell is describing is not different to a WeWork. Could this model not have been applied in a Westin or a W? Could the Four Seasons or The Ritz-Carlton not have taken up residence in the private members club market?
A former client, LUX* Resorts & Hotels have successfully taken its in-house Café Lux concept outside of the hotel walls and now operates a growing number of stand-alone outlets in Mauritian shopping centres, tourist destinations and the airport.
Too often it seems that hotel innovation is incremental. Is this enough?
Improvement by thousand-minute adjustments may keep the machine well-oiled and optimised but, if the industry isn’t careful it will be waking up one day to find that somebody has moved its cheese.
This article was first published by HOTELS Magazine