Public Spaces. Fighting Fire with Fire
This is a follow-up post to my blog entry, “Public spaces: Battleground of the brands,” prompted by reader Mike Cantrell’s thoughtful reply.
He wrote, in part:
“I have seen a new C-level position pop up as of late, CXO (Chief Experience Officer). These positions are being filled by hoteliers and with that means the blending of hospitality and retail experience, or in this case the lack or retail and more of a pure hospitality experience. With these lines being blurred, how do hoteliers combat this? My only though is 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 from retail to airlines hiring at senior levels (often, effectively, the CXO to whom Mr Cantrell refers) to transfer hospitality ‘technology’ into their operations.
Within many industries, hospitality is rightly regarded as the leading sector for customer experience design and operationalisation, especially for operators in luxury segments. Sadly, however, the flow of know-how has been largely one-way and these previously parallel sectors are now beginning to converge on hospitality as my piece demonstrates with just two of many possible examples.
Arguably, hospitality has been complacently content to have its proprietary distinction pillaged by others while sticking too stubbornly to its own knitting. Innovation can and should circulate from industry to industry and yet hoteliers have been slow to adopt and adapt great customer thinking from retail, in particular, but other sectors, too.
I personally very much like the idea of hotel brands opening facilities without rooms. Of course, we know where the GP contribution comes from and, as your final question suggests, the challenge is how to make a hotel without a rooms division make money. However, this isn’t an unsolvable challenge. Uber and Airbnb have figured out how to make money without traditional inventory, after all.
Unlike disruptor startups that have to plough millions of investor dollars into brand building, hotel chains have strong and established brands with global recognition, footprints and customer bases. That’s a great foundation that every startup enterprise would be grateful for. Why is it, therefore, that there is barely a hotel brand I can think of has really stretched its brand outside of its core business?
Surely, the whole co-working space was a missed opportunity? What Mr Cantrell describes is really little different to WeWork. Could that not have been Westin or W? Could not Four Seasons and The Ritz-Carlton have taken a slice of the lucrative private members’ club market?
One of our former clients, LUX* Resorts & Hotels, has successfully taken its in-house Café Lux concept outside of the hotel walls, operating a growing number of stand-alone outlets in Mauritian shopping centres, tourist destinations and the airport. I’d be grateful to hear of other examples with which readers may be familiar.
Years ago, I was involved in a project with British Airways to explore whether its Terminal 7 building at New York’s JFK airport could become a destination for New Yorkers with no intention to fly. Perhaps paradoxically, it was a blue sky exercise but the innovation thinking was to create a British Airways experience of global travel that families, in particular, could consume and enjoy without the need to buy a seat, take off or to leave the country.
Too often it seems that hotel innovation is incremental. Improvement by a thousand minute adjustments may keep the machine well-oiled and optimised but it’s not going to prevent the industry waking up (one day!) to find that somebody has moved its cheese.
This article was first published by HOTELS Magazine.