The Future of Guest Experience By Samantha Shankman
Interviews with CEOs Skift Books of the world’s top hotel brands 2015 The Future of Guest Experience
By Samantha Shankman with Greg Oates and Jason Clampet
Skift Books 2015 The Future of Guest Experience
By SAMANTHA SHANKMAN with GREG OATES, JASON CLAMPET AND SKIFT
Published in 2015 by SKIFT
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Publisher: Skif Editor: Jason Clampet
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4 Table of Contents The Global Chains Luxury and Lifestyle Brands Craig Reid Auberge Resorts Frits van Paasschen J. Allen Smith 69 Starwood Four Seasons 8 41 Niki Leondakis Commune Hotels Christopher Nassetta Greg Dogan 72 Hilton Worldwide Shangri-La Hotels & Resorts 12 45 Insights: Kimpton and the Rise of Boutique Hotels Arne Sorenson Nicholas Clayton 75 Marriott International Jumeirah 16 47 Jason Pomeranc SIXTY Hotels Insights: Georgetown Herve Humler 76 University Rethinks Ritz-Carlton Executive Training 50 Brooke Barrett 19 Denihan Hospitality Group Sonia Cheng 79 David Kong Rosewood Hotel Group Best Western International 52 Larry Korman 21 AKA Insights: Luxury Hospitality 81 Mark Hoplamazian Returns to the Human Hyatt Hotels Element Insights: How Alex 24 54 Calderwood’s Ace Hotel Changed the Way We Travel Sébastien Bazin Alan Fuerstman 83 Accor Hotels Montage Hotels & Resorts 27 56 Marketing Organizations David Berg Neil Jacobs Lindsey Ueberroth Carlson Rezidor Hotel Group Six Senses Preferred Hotel Group 30 58 87 Wayne Goldberg Rocco Forte Paul Kerr La Quinta Inns & Suites Rocco Forte Hotels Small Luxury Hotels 33 60 90 Stephen Holmes Carl Michel Jean-François Ferret Wyndham Worldwide Generator Hostels Relais & Châteaux 36 63 93 Insights: Why Every Hotel Rob Katz Ted Teng Brand Wants in on the Vail Resorts The Leading Hotels of the Boutique Business 38 66 World 96
5 6 Introduction Te pace at which the global hospi- Tis collection of 28 CEO inter- physical extravagance. tality industry is changing has reached views captures the strategies and chal- Join the CEOs of lifestyle hospitali- an unprecedented high. lenges of leaders as they consider the ty groups including Commune, SIXTY, Mobile apps, social media, peer impact changing global economic and and Generator Hostels in a discussion reviews, online booking, and an on-de- cultural factors have on their business on the transformation of the boutique mand mindset have completely shifed and how they plan to anticipate and concept into a cultural zeitgeist and travelers’ expectations and given hotels adapt accordingly. how they protect truly boutique expe- the tools and opportunity to engage By collecting their thoughts on a riences from the onslaught of lifestyle customers with unprecedented fre- similar set of topics--from technology brands peddled by corporate hotel quency and accuracy. and marketing to fees and training-- groups. Simultaneously, a growing number we have tackled the hospitality’s most Learn from the CEOs of the four of global travelers is expanding the po- pressing topics from every angle and top hotel marketing organizations tential customer base of every brand, gained a glimpse at what the future of including Leading Hotels of the World, causing a life-or-death fght for loyalty hospitality will truly look like. Relais & Châteaux, Small Luxury Ho- and driving the frequent introduction Read InterContinental Hotels tels, and Preferred Hotel Group as they of new brands and collections to all Group CEO Richard Solomons discuss talk about the rising interest in inde- major hotel groups. brand diferentiation and experiences pendent properties and how customer “Te Internet has entirely changed for every kind of customer, or Marri- habits have fundamentally changed the customers’ expectations. Tey know so ott International CEO Arne Sorenson services they ofer. much about what exists in the hotel in- discuss the importance of marketing in Despite the size, location or sector dustry that they didn’t know ten years building and expanding hotel brands. of their specifc hotels, all of the CEOs ago,” says Accor CEO Sebastien Bazin. Best Western CEO David Kong concluded their comments by men- No longer satisfed with a clean bed talks about technology’s role in chang- tioning technology’s inability to replace and welcoming smile, customers are ing customer expectations and former true hospitality. searching for brands that embody the Starwood Hotels & Resorts CEO Frits As former Starwood Hotels & destination that they’re in, provide a van Paasschen discusses its ability to Resorts CEO Frits van Paasschen sums personalized experience or give them improve the guest experience and free up, “In the end, you can’t download the tools to get in and out exactly how up staf for true engagement. a hotel or outsource a butler. Te they choose. Hilton Worldwide CEO Christo- hospitality business is about going “Nowadays hotels are not merely pher Nassetta touches about the global somewhere, having an experience and hospitality companies; they are lifestyle war for talent and Hyatt Hotels CEO seeing people face-to-face. providers. Guests expect us to inform Mark Hoplamazian compares the risks Dig in as hotel CEOs from Con- them about what’s happening at a and rewards of empowering front line necticut to China discuss guests’ rapid- particular location,” Shangri-La Hotels employees. ly changing expectations, technology’s and Resorts CEO Greg Dogan. Read the CEOs of luxury hotel role in improving and personalizing Hotels are also in a frantic search groups including Ritz-Carlton, Four a stay, and how hotels hire and train a for new employees and shaking up both Seasons, and Jumeirah talk about the nimble workforce. Tey’ll also dispel who and how they train their front changing defnition of luxury and their strategies for digital content line employees in an efort to empower how they’re adapting their products marketing, social engagement and them to stray from a guidebook and and services to meets travelers’ rising post-stay communication in an efort surprise guests as opportunities arise. demands for personalization over to create and keep loyal customers.
--Samantha Shankman
7 The Global Chains
8 Starwood Hotels and Resorts Frits van Paaschen
Photo courtesy Starwood Hotels and resorts
the hospitality industry in technical lenges you face to improve the guest With international tourist innovation, constantly taking its place experience today? arrivals reaching a record as one of, if not the, frst hotel brand to Frits van Paasschen: Te big- 1.087 billion in 2013, travelers introduce a Google Glass app, an Apple gest challenge today is making sure from emerging and leading Watch app, a robotic staf member, and our brands stay relevant and ahead nations are crossing more stellar social customer service. of people’s changing expectations. Te brand is also rapidly expand- Between new generations of travelers borders more frequently than ing overseas, meeting the needs of its people coming from and going to new ever before. increasingly global guest, with plans to destinations around the world and Global hotel brands are tasked double its presence in India and China, experiencing the benefts of technology with responding to these increasingly add up to 20 properties in Africa, and in other facets of their life, we need to sophisticated guests no matter where expand throughout South America. make sure that we move 1,200 hotels in the world they are or where they’re But it wasn’t expanding fast enough and a couple of hundred thousand peo- from. Today that means acting as a for board members: One month afer ple as quickly as possible to meet those portal to a destination’s local culture, Skif spoke with Starwood CEO Frits changing expectations. Tis isn’t just arming travelers with technology to van Paasschen, he resigned his posi- the biggest challenge facing me; more make smart decisions quickly, and cre- tion. importantly, it’s the biggest challenge ating a company culture that encour- His insights into the industry are facing our organization overall. ages staf to step outside their defned still valuable, of course. An edited Skif: Let’s touch on some of those roles. version of the interview follows: changes in guest expectations and Starwood Hotels and Resorts demands. What are some of the broad Worldwide, in particular, is leading Skif: What are the biggest chal- changes that you’re seeing? Are any of 9 them unexpected? ask you whether you know how to why I say that: You’re able now as an van Paasschen: Te fundamental get to our hotel. If you’re on property, associate to know who’s coming into thing here is that most of the change increasingly, we should be able to deal your property. We used to have a print will happen in the coming years will, with you through our mobile app in daily pre-arrival report identifying in fact, be unexpected. Internally, we case there’s something you need or what people want and all kinds of talk in terms of agility being the new want. information about their stays. What smart and that it’s far less important to Tere’s so many more touch points we were fnding was that it was really have a long-range plan or strategy and now where we can learn from you, and hard for our properties to absorb and far more important to decide what you it’s not just by the way of “big data.” respond to that. What’s happened is want to be good at and how you can One thing is having a lot of analysis to that we’ve gotten better at highlighting recognize good ideas and change and be able to identify what people want the information about who’s coming, respond to those as quickly as possible. or what they may have wanted in the but also putting it on tablets and put- For exam- ting it in the hands of ple, the shif our associates so that that everybody they can see, up to is seeing from the moment, what’s a PC-based “I look at it in this simple way: In the going on. search engine Likewise in mea- transaction end, you can’t download a hotel or suring guest satisfac- view of the tion, we used to look world to a outsource a butler. Te hospitality at a 30-day window mobile-based for what people dialogue, business, in the end, is going to be about were telling us and app-based you going somewhere and having an between social media way of relat- and now looking at ing to brands, experience and seeing people face-to- feedback in real time, fundamentally our general managers opens up new face.” or heads of house- possibilities keeping can talk to for how we our associates each can have direct morning about what’s conversations with individual guests, past. If we know you’re in touch with happened in the past 24 hours and how we can anticipate their needs, how us and there’s something about your things to look at and focus on. In many we can make sure their room is ready room that you don’t like then we want respects, we’re responding to things when they get to our hotels. to hear about it. that people have said but we’re also Tese are all things that I think We’ll pick it up on social media avoiding issues that people might have are really exciting and represent, yes through what used to be a call center that day if we hadn’t had the informa- challenges, but, more importantly, and is now increasingly a social media tion more quickly. opportunities. Te next phase of where nerve center. Or we may hear about All this nuanced guest feedback this evolution is clearly wearable tech- it on property and there are certainly is helping us work with the owners nology. How do you go from dialogue ways that our associates know close to of our hotels to identify those things to real-time functionality? In a mobile immediately if you’re having an issue that would be the biggest improve- environment people interact with their or a problem. It’s as much about being ment in guest satisfaction at their own phones every six or seven minutes, able to anticipate as it is the all-import- properties. We can begin to show our but with wearables, they’re essentially ant other phase of hospitality, which is owners where, if they put capital into always online and their devices have responding and recovering to a need or their properties, guest satisfaction will the potential always to be doing things something that may not have gone the improve and the fnancial performance in real-time for them. way it should have the frst time. of that property will get even better. Skif: What role does technology Skif: Is consumer-facing or back- Skif: How has the hiring expe- play in improving the guest experi- end technology more important/ rience changed or evolved to match ence? efective? Is there a particular aspect changes in the guest experience? van Paasschen: If we have state or feature in all of this technology that van Paasschen: It starts all the way awareness in our app like we do, then has improved the guest experience in from the beginning. We do much more that means we know when you’ve particular? hiring now online and through various arrived in a city and we can make van Paasschen: Honestly, I think forms of social media that didn’t exist sure that we’re ready for you. We can they are kind of one in the same. Here’s not that long ago. In addition to that,
10 we’re hiring people around the world talent. rooms. We brought those together in for diferent functions. Skif: What are your views on the such a way so that if you book through One of the great things about the increase in hotel fees levied against our direct channels and SPG.com, hospitality business is that we gen- guests? we can start to record what kind of erate and create opportunities in the van Paasschen: First of all, the rooms you like and which of those 1,200 locations and the 100 countries most important job that we have is to rooms are available at the properties where we operate. It’s important to fnd make our guests feel like they want to you’re looking at. We’re making our people who have that balance between come back and feel connected to our associates’ lives easier because if you technology and design and brands and brands and giving them great experi- don’t adjoining rooms or if you want operations. Talent pools are getting ences. Te other side of our business is to be farther away from the elevator, more and more challenging to tap making sure, in doing that, we create now our associates aren’t picking up into. I think the real opportunity to set great returns for the investors that own the phone to check whether Room 217 ourselves apart is to make sure once our hotels. meets your preferences. You can do all people get to our company that they From our perspective, we’re always of this automatically. stay and grow. trying to fnd the balance between Technology is a great way to get People love coming here and being giving people great experiences and rid of pain points in the hospitality able to stay at our hotels. Having more making sure that our hotels get the process. You stay with us 50 times a luxury hotels in more destinations is a fnancial credit for doing that. Having years, why should you have to show great opportunity. Joining Starwood in said that, I think the other thing that up, wait in line, identify yourself, pay one place and being able to move and we’ve learned is when it comes to our in advance, get a key, walk to your work in diferent properties around the loyalty program: Te people who are room. We should be putting that same world is another one. We also make most loyal to us will get more and amount of energy that we’re putting investments in tuition reimbursement more preferential personalized service into a pain point into meeting you at or online learning, which about 30 and treatment. For example, if you’re a the door, giving you the drink that you percent of our associates take advan- member of SPG and you stayed with us want, helping you with your bags and tage of. loyally over time, if you show up at one doing all the things that are actually I would layer on top of that the fact of our hotels at seven in the morning hospitality. that if you create a culture that values you can get something that we call Skif: How has content and social people from diferent backgrounds and Your24. You can get the room that you media changed Starwood’s conversa- diferent functions coming together checked into for a 24-hour period and tions with customers? then they get really excited about this not have to think of it as two days. van Paasschen: I look at it in change that they can make. For exam- Skif: Starwood has been an early this simple way: In the end, you can’t ple, at StarLab we have 200 developers adopter when it comes to new tech- download a hotel or outsource a or people with technical skills, but nology including rolling out a Google butler. Te hospitality business, in the those people are sitting right next to Glass app, room keys right on guests’ end, is going to be about you going our brand and design teams. mobile phones, or the Apple Watch somewhere and having an experience We make sure that we have folks app. What’s the thought process and and seeing people face-to-face. All of from our operations around the world stance behind this early adopter mind- what we’re talking about in respect to come and interact, because the best set that you’ve taken on for SPG? technology is trying to make that trip ideas and the best things that we van Paasschen: I think it goes a better experience. In a funny way, the end up creating are those that come back to the DNA of our company. We technology matters least. Technology from these disparate groups of people believe that people want a better way to is best in all of this if it kind of disap- working together and feeling empow- experience the world and that bringing pears. ered to come up with new ideas, make new things to our guests and bringing What social media and the avail- changes, and propose things that might innovation to hospitality is part of that ability of information does from my be a little diferent from how we did relentless desire to fnd a better way point of view is, look, the more you them yesterday. to experience the world. Te diferent know about my hotels and what you What has stayed the same but just ways that technology intersects with can do there, the better chance we gotten bigger is working directly with SPG is creating a whole bunch of new have of you coming and seeing us. It’s universities. We work with the classic ways for us to think about giving peo- the same reason we put ratings and hotel schools and hospitality learn- ple those better experiences. reviews on SPG.com. We’re not 100 ing organizations, but what’s really Here’s a live example of what I percent correct every time, but I’ll put changed is that we now also work with mean: In the last few months, we’ve us up against the reality anywhere else 17 diferent local universities in China, gone through our 350,000 rooms and any time. I think in a lot of respects, universities in the Middle East, and given our associates an app to record the more information that’s out there, around the world as another pool for about 80 diferent features of those the better we look.
11 Hilton Worldwide Christopher Nassetta
Photo courtesy Hilton Worldwide afer holding executive roles at Host have so much choice and control Hilton Worldwide is the Hotels and Resorts and several real aforded to us today, in large part largest global hospitality estate and investment companies, afer because of the technical advances that company by number of rooms being courted by its owner Blackstone. we’ve seen. People are driving all as- and is quickly innovating to He shepherded the brand up to and pects of their life on a personal digital meet customers’ changing through its initial public ofering in device, whether it be checking a board- December 2013. ing pass, paying for Starbucks, making demands across technology, In addition to learning from their schedule, talking on the phone. experience, and mindfulness. travelers inside and outside of Hil- People have so much more choice and For example, Hilton is tapping into ton’s system to inform new initiatives, control over how they interact with tech innovation to improve guests’ ex- Nassetta pulls on his own interests in everything in their life today. perience. In July, it was the frst major sustainable growth and education to Te speed at which that’s been hotel brand to give guests the ability to direct the global hotel brands’ projects changing is amazing, even over the last select specifc rooms a day before their and priorities. fve to ten years. What that means from stay. An edited version of Skif’s recent a customer point of view is that if cus- Hilton also joined the ranks of conversation with Nassetta follows: tomers are becoming accustomed to major hotel corporations putting a having that level of choice and control foot in the growing independent and Skif: What are some of the biggest in all other aspects of their life then lifestyle segments. In June, the compa- challenges that you’re facing to im- they’re going to want that same thing ny launched Curio, a collection of in- prove the guest experience today? when it comes to their experience with dependent properties that wouldn’t ft Christopher Nassetta: One is the us. Tey’re going to want that when under its other brands. In October, it pace of change, both related to technol- they dream about a trip, think about launched Canopy, a lifestyle hotel that ogy and, more generally, globalization. booking a room, check in, check out, connects guests to the local culture. Te other challenge is the war for provide feedback, and everything else Christopher Nassetta joined talent around the world. that’s a part of the journey. Hilton as CEO in December 2007 In most aspects of our lives, we If they have a signifcant amount 12 of choice and control in how they prepared to be employable in our edented levels of choice and control. interact with every other aspect of life, industry. Tis past summer we launched they’re going to want it with us too. To Tey need basic life and entry-level digital initiatives that allow guests continue to please customers, we have skills so when we get them inside the to control the entire experience that to keep up as an industry, and certainly company, we can mold and train them they have with us, at all of those touch Hilton as a company, by giving cus- within our programs. We have fantastic points I just described, in the palm of tomers unprecedented levels of choice programs that have been in place and their hand. What is unprecedented is and control in how they interact with refned over many years. However, the global scale on which this is possi- us. Tat pace of change has been very there are certain basic skills that young ble. We intend for these digital capabil- rapid over a rela- ities to be in every tively short period one of our 4,265 of time. properties around Tis is also “If customers are becoming accustomed the world. related to the war We already for talent. When to having that level of choice and control have, obviously, you think about the ability for you opportunities in all other aspects of their life then to dream with us, around the world, they’re going to want that same thing go on our website there is a middle to explore difer- class in emerging when it comes to their experience with ent opportunities markets that has and book. We doubled in the last us. Tey’re going to want that when they have now rolled 20 years and is dream about a trip, think about booking out global- expected to double ly-specifc room again to nearly fve a room, check in, check out, provide selection, a frst billion people in in the industry. the next 20 years. feedback, and everything else that’s a In 2015, we will Tourist arrivals part of the journey.” roll out straight- have doubled. to-room, which is Last year, for the the ability to use frst year ever, we a personal digital had more than device to bypass a billion global the front desk and tourist arrivals. It’s go straight to the doubled over 20 guest room. It will years and is expected to double again people need in order to start out in the probably take us 18 to 24 months to to nearly two billion tourist arrivals system. roll out throughout the entire world. over the next 20 years. Skif: What role is technology play- It’s critical that the back-end sys- Yet when you look at emerging ing in improving the guest experience tems, property management systems, markets and the hotel business, room or in meeting those expectations? Do reservation systems, and HHonors sys- capacity is about 10 percent of what you focus more on consumer-facing or tems are all interconnected around the you fnd in the west. Tat means there back-end technology? globe in order to accomplish our digi- is tremendous opportunity and that Nassetta: When I think of custom- tal initiatives. It is a major foundation- there needs to be very rapid growth er-facing technology, I think about al element of what makes all of this to keep up with those demographic every step of the journey from the frst happen. trends. Ultimately, there needs to be time somebody is thinking about a From a customer’s point of view, it a huge cohort of potential employees trip, through the process of booking, to should be seamless to them no matter available to deliver service levels that feedback on their experience, and how where they are, how they’re interacting meet guests’ expectations. we can interact with them in real-time with us, or which branded hotel they’re In many developing parts of the way while they’re on that journey with staying at with us. Tey shouldn’t wor- world where there is a small hotel base, us. ry that all of our property management you don’t have a population with the Tinking about the customer systems at our 4,200-plus hotels are the embedded skills necessary to fll hotel experience at every one of those touch same and connected to a reservation roles. We are very involved in working points is what’s most critical to chang- system. with governments and organizations ing the relationship that we have with While we were private, we spent around the world to get young people the customer and giving them unprec- more than half a billion dollars re-
13 building our technological infrastruc- revenue engines that we have. It’s a we can serve more customers at more ture to create a common platform that very good match of something custom- locations, with the philosophy being allows us to now connect all the dots ers want, something our owners want, to serve any customer for any need and have a very comprehensive digital and something we can scale to satisfy they have, anywhere in the world. By strategy on a global basis. Tat is very our customers’ needs. putting it at the right price point and unique in the industry. We have a very simple philoso- having the right accessible design Skif: You launched Curio, the phy: We want to be able to serve any ethos, we think it allows us to better brand for independent hotels, and customer, anywhere, for any travel accomplish this objective. now Canopy which is more a lifestyle need they have. Te more that we are Of course, we’ll keep talking to our brand. Do you see this as the start of able to do that, the more loyal that customers and fguring out what they something or is this almost the culmi- they become. Te more loyal that they want. We’re going to keep talking to nation of it? become, the higher the market share people who are not our customers that Nassetta: I view these as core of our brands. Te higher the market we want to bring into the system. We’ll products. Both Canopy and Curio share of our brands, the more own- pursue other opportunities and new will be large brands, in the sense that ers want to build hotels with us. It is brands, driven by what our customers when we’re done in fve or ten years a cycle that reinforces itself. It helps demand or tell us that they want. and we’ve made really good progress, us accelerate our growth, and as we Skif: Are there any other concepts they will both be large scale in terms accelerate our growth, we better serve that customers are asking for right of number of units and global distribu- customers because we’re giving them now? tion. Tey’re not going to be 20 or 50 more options. Nassetta: Te one thing that we are hotels like some of the lifestyle brands Canopy is a diferent lifestyle spending a lot of time focused on is from other companies, there will be concept but it has similar drivers. that younger customers are becoming hundreds of hotels. Ultimately customers have said to loyal earlier. Forget whether you call Tese were, as you would expect, us: We want you to have a lifestyle it lifestyle or something else, we think born out of what customers are telling brand with something that we would it’s important to make sure that we us they want. We have 43 million use if you ofered it to us. Customers have products that are accessible, from loyal HHonors members and serve that we don’t have in the system said a price point of view, early in guests’ hundreds of millions of customers a that they’d be more likely to stay with lives and careers. Tese products need year who are quite pleased and loyal to us and owners have said that they to resonate with them, but also be af- our system. We’re talking to them all want to build these kinds of products. fordable. We are spending time looking the time. We’re also, not surprisingly, Again, it’s a nice convergence of what at other entry-level brands that serve a talking to potential customers to fgure customers and owners want from our younger demographic. out how we can bring them into our point of view. It allows us to grow, but Skif: We’re talking about price system, so that they stay with us and it most importantly allows us to better point, which makes a good transi- try other products that we have. Tese serve our customers by giving them yet tion to fees. What is your view on two brands were birthed out of that another option in a large number of the increase in hotel fees in the hotel process. destinations around the world. industry? In the case of Curio, customers What we’re doing in lifestyle is Nassetta: I think it’s a case-by-case said to us that they’d like the option of diferent, we think, than what others issue. For example, parking depends a four- to fve-star, very high quality have done. Many of our competitors on location and the bulk of where it hotel that is unique and almost a brand have focused on the upper end of the is charged for is in an urban environ- unto itself. Tey wanted a non-tradi- lifestyle segment; many of them are ment. No matter what the customer tional hotel that really adapts and is luxury lifestyle concepts. We’re trying is doing there, they’re going to pay for very relevant to its local environment, to build what we call accessible life- parking. unlike the other options that we have. style. In terms of design ethos, it’s light Te big thing that we hear from Tey said that they would not use it all and organic, not the dark and brooding customers and that we’re very actively the time, but they’d try it. Customers bar scene that lifestyle 1.0 was. We’re trying to respond to is Wi-Fi charges. outside our system said they’d be more skipping to lifestyle 3.0. Tat’s what I think where that is headed, and we’ve likely to stay with us there and use our we think customers want, particularly tested it and rolled it out, is a tiered other products if we also had that. female customers who are looking for pricing plan. Customers have said that It just so happens that owners love something with high energy, that is there is a basic level of Wi-Fi that they the concept as well. Many of our loyal more locally oriented to whatever en- want, that’s a normal part of their life. owners have owned these types of vironment it’s in, and at an upper end, It’s like turning the water on when you hotels and found that they’re unable but not luxury, price point. want to take a shower or fipping a to drive the same level of performance We think this opens it up to a much light switch and expecting the power to outside a system with the strength and broader set of demand. Tat means come on. It’s about, as we talked about
14 earlier, choice and control. Te digital en years ago, I decided that it was very tool, LightStay, to measure, manage, existence is so much a part of our exis- important for us to focus on this area, and share best practices across the tence. Ultimately we will get to a point both because I believe that we can have whole portfolio. We require every hotel as an industry that if you are doing a positive impact on the environment in our system to participate, which basic activities on a computer or digital given our scale and because I believe means they upload all of their data to device like checking emails, then there that, increasingly, customers care about measure a myriad of diferent metrics should be no excess charge. If you’re this. It can impact the performance of including energy usage, carbon output, streaming or using more bandwidth, the company. I also believe there’s an water usage, and waste output. that’s a big investment and there will opportunity to be thoughtful and do We were the frst company to create still need to be a cost for higher levels good things for the environment while, a tool like this and make a system-wide of usage. at the same time, create efciencies in standard that hotels have to adhere to. Skif: Te Hotel Association of the hotels that have a real return asso- Tere’s a simple belief I have, which is New York City recently honored two ciated with them. you cannot manage what you’re not Hilton hotels for their environmentally It’s the trifecta. It’s good for the measuring. Until we started measuring friendly initiatives. Where does this environment, good for the economics it on a global basis, it was very hard to focus on sustainability come from and of the hotel, and it pleases a certain really be strategic about it. Te advent does it have any impact on the guest segment of customers who are in- of being able to measure it on a global experience? creasingly focused on environmental basis has been monumentally import- Nassetta: We are exceptionally fo- impact. ant and was a frst step of many to have cused in this area. When I got here sev- Five years ago or so we created a a real impact in this arena.
15 Marriott International Arne Sorenson
Photo courtesy Marriott International Marriott International is the be done to meet the needs of so many have to be wonderfully reinvented. midst of a rejuvenation and diferent guests. Sorenson recently We want to make sure that we get that CEO Arne Sorenson is leading spoke with Skif about his insights on done. today’s guests and what needs to be Skif: Is there a certain element of more than 4,000 hotels done to remain a global leader. the guest experience that takes priority through the process. An edited version of the interview in improving over the others? He appears ofen on major news is below: Sorenson: Te biggest watchword shows, talks up innovation with his for us is authenticity. We have, for staf behind closed doors, and is bet- Skif: What are the biggest chal- generations, had a pronounced focus ting the future of the corporation on lenges that you face today in improving on our people and service culture. meeting millennials’, and all travelers’, the guest experience? Te most important element to that expectations for more personalized, Arne Sorenson: Tat’s a big, broad is a genuine welcome and the friend- technologically advanced service. question. We have 4,000 hotels in 80 liness and attentiveness of service Marriott recently announced the countries and I think the answer to while they’re at the hotel. We want to launch of an in-house creative and that question varies dramatically from make sure that we retain that, even content marketing studio, is pushing place to place. I would say that the as it evolves into a world that is more its Travel Brilliantly campaign for the biggest single issue we’ve got is to make technologically aided. Marriott brand harder than ever, and is sure that we move the product along as We know that we can’t force people investing in the lifestyle market with its far as we can so that it is current and to take a friendly welcome if they newest Moxy property. compelling. We have some hotels that want to bypass the front desk and go With so many brands and prop- have been in our system for more than directly to their room. We’ve already erties across the globe, it would seem 20 years, some of which have been rolled out mobile check-in, which is difcult to keep track on what needs to wonderfully reinvented and some still available at 1,400 hotels, We’ve already 16 done well over half a million mobile and orientation process, heavy use of the information that we have, key up check-ins and we know that techno- technology in the day-to-day work that information that is valuable to them logically-enabled travelers want to use they do. All of those changes have been and eases up their process whether it their technology at our hotels to check underway at exactly the same time as be around making their reservation or in quickly. Tat may have an impact on changes around Marriott.com and the our recognizing them when they show that authentic genuine welcome, but it Marriott apps and Marriott Rewards. up at the hotel. still can and should be provided at oth- Skif: How has the hiring expe- Skif: What are your views on the er touch points during their stay at the rience changed or evolved to match increase in hotel fees levied against hotel. Tose are touch points that the changes in the guest experience? guests? customer values and it will continue to Sorenson: Te jobs have all be- Sorenson: I actually don’t think be there. come more technological and require it’s much of a story. I understand Skif: What’s one unexpected shif a fuency, if you will, of our folks in that a whole bunch of publications you’ve seen in guest expectations or technology. Our front of the desk staf, have jumped on this and you see TV demands in the last decades? particularly, have to be both really programs asking whether hotels have Sorenson: I think that the ma- good with people and really quite gone the way of airlines. I actually jor trends are ones that have been adept at using technology. think there’s much less substance than continual. It’s not like we’d wake up Skif: Is there a particular aspect the stories suggest. We are not adding and see a trend signifcant fess or that hasn’t been charges for our discussed before. customers. Tere Tose are about “Millennials are as diferent from has really been desires for better very little of that food and beverage one another as they are from other in the past few options as guests’ years. Of course, tastes become generations. I think we do them and we charge for more sophisticat- ourselves a disservice if we said every parking, but we’ve ed. Tat doesn’t charged for park- necessarily mean one of them is identical.” ing for decades in fancier food, but markets in which I think it does parking is partic- mean food that ularly expensive. they enjoy. It also Te parking that includes the way that customers want or feature in all of this technology that we provide our guests is valuable and I to communicate with each other and has improved the guest experience in think our guests understand that. how they want to communicate with particular? Tere is no way that we’re headed us. How do they share their experience Sorenson: We rolled out mobile towards the airline model. We’re not through Facebook or Instagram or check-in to the entire Marriott Hotels going to charge people for bringing a other sites with their friends? How do and Resorts brand nine months ago bag into their guest room or using the they share their experience with other and it is quickly rolling across the other bathroom. Marriott travelers? brands as well. Our customers abso- Skif: How has content and social Skif: What role does technology lutely love it. Tey take out their mo- media changed Marriott’s conversa- play in improving the guest experi- bile device as they’re approaching the tions with customers? ence? Is consumer-facing or back-end hotel and check in. It allows them to Sorenson: I think it’s made it a technology more important/efective? get into their rooms faster and I think much livelier conversation, but also Sorenson: I think both are crit- there’s just some pleasure in being able one that is more varied. In the old ically important. We have 400,000 to use that technology. We’ve talked to days, you would have a Marriott-spon- associates wearing our name badge our customers about that experience sored guest survey, which was our every day. Tey are a big group people and what they tell us overwhelmingly primary vehicle for hearing from that need to feel good about their jobs is that they fnd the experience better guests about their stay, and in the old in order to be successful at their jobs and one that draws them to us more old day that was distributed by paper. and that means being able to use the tightly. More recently, it’s been distributed by technology that will help them do their I think a second example would be email or a similarly technologically work better. We’re doing everything around personalization. Te more that advanced way. we can on that front. Tat includes we have this technology available to us, I think today we get guest feed- things like mobile hiring, heavy use the more we can know our customers back not just through our survey, of technology in the employment in a granular way and, hopefully with but through dozens of social media
17 insights. Tat feedback is, in some mean the very deliberate efort we have ties, and we partner with other causes respects, harder to tabulate because the with TravelBrilliantly to bring custom- that our hotels adopt around the world. format varies from channel to channel, ers into our process and defne new We’re trying to business in a way that but at the same time it’s much richer in products and services for our hotels. is both, obviously successful, and has its depth because it is very much alive. It gives us real high-quality input and a deeper meaning associated with it. It’s feedback that ofen might be given it also gives us a process by which our Tat’s something that I think millienni- by somebody while they’re still in the customers get close to us. als value as much as, if not more than, hotel. Skif: What do you see Marriott the older travelers. It allows us to get a deeper sense brand standing for for this new genera- Skif: How does this change based of what they like and don’t like and tion of travelers? on brand? it allows our hotel teams to address Sorenson: I still would go back to Sorenson: We have to be authen- customers’ issues before they’ve ever authenticity. We tend to talk about how tic as a company and each of our lef the hotel. If they can monitor that, millennials are diferent from prior brands has to be authentic to what which they’re doing and we’ve given generations and there are diferences to they are. Te newest brand we’ve them the technological tools to do that, be sure, but there’s a couple of import- launched, Moxy, is a lifestyle economy they can say, “We have a guest and ant things to keep in mind. One is that product. It would be ludicrous for the there’s something about their room older generations are also infuenced Moxy team, we call them “the crew,” service order or their room or their by many of the same trends that are to pretend to be a luxury Ritz Carlton hotel experience that hasn’t been per- driving diferences between millennials hotel. Tat hotel has to deliver a service fect. Or there’s something in their lives, and others. Technology, a desire for equation that is true to the product which has created a special need. Let’s deeper experience and for richness of and the positioning of the brand in the fnd a way to make sure that we meet experience are all examples of that. market. You could say the same thing that.” Tat dialogue is, I think, very Millennials are as diferent from for each one of our brands across the deep and very alive. one another as they are from other system. Skif: We’re one year into the generations. I think we do them and I think Ritz Carlton would be Travel Brilliantly campaign. How has ourselves a disservice if we said every deeply ill-served to suddenly wake up it performed and positioned the brand one of them is identical. When you one morning and say, “We’re not going towards these millennial travelers? listen to them, you hear very diferent to provide deeply intensive service and Sorenson: Te number of impres- things from them. One commonality; instead we’re going to try to simply be sions and, statistically the program, however, is they have no tolerance for cool.” have been spectacular. It has been inauthentic communication whether Tat’s not what that customer is broadly connected to and watched it be at the hotel or a lame efort on necessarily looking for. Tat doesn’t and it’s something we feel good about. social media. mean that all of brands don’t continue I think the materials have been great, What they want is to do business to evolve. Tey do. Tey’ll continue to they’re full of energy and they’ve got a with people and companies that are use technology or see food and bever- younger vibe to them which naturally genuine and authentic. I think that age evolve. To some extent they will be has an impact on the perception of our plays right into what Marriott is. We more current, or more lifestyle, than brand. I think the thing that I would are real about our commitment to they were in the past. But they can’t point out most would be the co-cre- our people and our guests, we are real pretend to be something that they’re ation element of this and by that I about our involvement in communi- not.
18 Insights Georgetown University Rethinks Executive Training
Unlike in Europe and make money in school on their way to graduate schools are teaching course- careers in other sectors. But then they work that’s not entirely relevant to the Asia where an executive became enamored with the lifestyle industry today. career in hospitality and worked their way up the ladder Previous to his hiring in January enjoys a heightened over time, evolving into executive po- 2014 and the launch of the graduate stature, hotel careers in sitions in corporate hotel ofces almost hospitality program last fall, Shealy North America have by accident. was the global design director for Today, that career trajectory is W Hotels. He says Georgetown was traditionally been viewed much less common. In the global hos- specifcally searching for someone as an occupation, not a pitality industry in 2015, where hotel with extensive corporate hotel expe- profession. companies no longer own the majority rience outside of academia to develop In fact, for many people employed of their room inventory, the execu- the course curriculum and run the today in U.S. hotels, even at the tive marketplace prioritizes branding program, in an efort to avoid dupli- highest levels, it’s ofen an “accidental and marketing expertise as much as cating what other hospitality schools occupation” according to Gray Shealy, operational knowledge and manage- are doing. executive director of the new Master’s ment skills. Te age-old story of the Shealy, who has a degree in archi- of Hospitality Management program bellboy working himself up to compa- tecture, extensively explored other at Georgetown University in Wash- ny president over a span of 40 years is hospitality schools in North Amer- ington, D.C. now just the stuf of hotel lore. ica and abroad to understand the In the past, many hotel exec- However, according to Shealy, nuances of their programs, and more utives in North America initially hospitality education has been slow importantly, their practical relevance began working in hotels as a way to to evolve with the times, and many in the real world of international 19 hospitality in the 21st century. He says and who really signify that company’s Te Next Generation Classroom most other graduate hotel schools focus,” says Shealy. “With this type of with Master’s of Science programs approach at Starwood, and many oth- Te course curriculum for George- focus mainly on theory, where- er companies, that changes the game town’s Master’s of Hospitality Manage- as Georgetown’s core mission and for everybody. ment program consists of core classes applied approach is developing hotel Even though the industry has and four executive tracks focused on executives who actually want to work been quite slow to accept that, we’re Brand Management & Guest Experi- in the hotel industry. seeing how people interested in exec- ence Design; Development & Asset “Hospitality education hasn’t utive positions need to diferentiate Management; Global, Regional & always typically been a top priority on themselves in the industry in diferent Local Practices; or a customized com- CVs when hiring for hospitality posi- ways, other than the traditional, expe- bination of all three for students aspir- tions,” explains Shealy. “At many of the rience-based CV. ing to be innovators in the industry. big schools in hospitality, their grad- To answer that demand, George- Most importantly, the coursework uate programs are more focused on town’s graduate hospitality program is designed to tackle major industry research, ultimately training students is taught by adjunct professors who disruptors trending today, including to go into a doctoral program, and are currently employed in the hospi- Airbnb and online travel agencies preparing them to become professors, tality sector, as opposed to tenured (OTAs), as well as more subjective and less about educating people to go professors who sometimes have skills that hotel executives need to into the workforce.” never worked in a hotel. Te adjuncts thrive in high-powered corporate are bringing real world experience settings. Te Rise of the Non-Hotel Hotelier into the classroom, who can explain “In general, something really lef the context around any of the class out in traditional hospitality educa- When Frits van Paasschen was materials as they apply to the industry tion is leadership, because the notion hired as CEO of Starwood Hotels in today. of how to navigate through a corpo- September 1997, with no previous ex- Another beneft of having rate environment and advance has perience in hotels, it marked a turning working hospitality pros teaching largely been lef out of the classroom,” point in hotel executive development. graduate level curriculum revolves says Shealy. Van Paasschen came from the C-suite around the importance of making “So we teach things like how to ofces of Nike and Coors where glob- connections in the hospitality busi- network, or conduct yourself in a ally diferentiated lifestyle branding ness. Te thinking is that students to- meeting with people from diferent and sophisticated marketing had been day have an advantage when they can cultural backgrounds, and understand raised to an art form, but he didn’t meet as many infuential tourism and their decision making process. Or know RevPar from rebar. hospitality professionals as possible, how do you become a great speaker, As hotel companies at the time and in Washington, D.C., there are or deliver an elevator pitch to a CEO were shedding their equity stakes in a lot. in 30 seconds? Tese sound basic but physical hotel assets, they were freed Both Marriott International and I think they are very cloudy waters for up with fush cash to develop more Hilton Worldwide are based in and people entering the industry.” hotels and more hotel brands. Delin- around the nation’s capital, as well as Although, all of that pales to a eating those brands well in a crowded the U.S. Travel Association and Desti- certain degree in comparison with the market became paramount, and no nation Marketing Association Interna- business drivers shifing the hospi- company has done that as defly as tional, among many others. tality landscape. Shealy suggests that Starwood since then. By the end of the “So I see the classroom as not only it’s critical for his graduating students 1990s, suddenly running and oper- a way to learn about the foundations to come out of school with the ability ating a hotel company wasn’t about of hospitality, and the academic theo- to speak authoritatively about the running and operating hotels. It was ries of hospitality, but also learn from brand-building machinery underpin- about brand building. the people who have done it for many ning the global hospitality industry “Delivering meaningful, person- years, and learn how they run the of today. alized branded experiences for our business of hospitality,” says Shealy. “One of our primary education- guests is what we’re about,” is how van “At the same time, it’s also about meet- al thrusts is largely about building Paasschen explained it in 2013 during ing signifcant players in the industry brands and selling brands, and the the annual Starwood Rendezvous buy- because at the end of the day, hospital- value of marketing and branding in er/supplier gathering in New Orleans. ity is largely about who you know. So terms of customer loyalty,” he says. “So now you have Starwood being the university is also looking at itself “Because the Marriotts and Starwoods run by a bunch of Nike execs who as a business model, and not only of today are basically turning into came from branding, who came from an academic model, which I think is giant loyalty programs.” retail, who came from marketing, quite diferent.”
20 Best Western International David Kong
Photo courtesy Best Western
Many Americans think of Best ognized on several occasions for its many that it’s hard to say which is the Western as a standard road digital acumen including extensive biggest issue. I’ll give you two for con- trip stopover without realizing planning resources, engaged social sideration: Competitors are constantly its position as one of the accounts, and data tracking system that upping their game and there’s ever-ris- drives all business decisions. ing customer expectations as a result largest hotel corporations in Best Western’s CEO David Kong of that. the world, or its emphasis on started out in the hospitality industry For example, the breakfast is always localization and innovation. as a bus boy and worked his way up being improved, the room design is Best Western International operates through several global hotel companies always being refreshed, the high-speed about 4,000 hotels, half of which are lo- before joining Best Western as CEO in Internet access is given with higher cated in North America. Te corpora- 2004. Kong is an outspoken advocate bandwidth. Customer expectation has tion began diferentiating its properties for the brand’s service, training pro- evolved to mobile and people want to in 2002 with the launch of the more grams, and digital innovation. use our entertainment as well as have it upscale brand Best Western Premier. It We asked him about how the cor- on their devices. Tat’s driven a change then expanded to a three-tiered system poration responds to evolving guests’ in marketing as well. in 2011 and most recently entered the expectations, especially in light of its We used to have three TV channels lifestyle brand arms race with its new business structure. Te edited inter- and now we have over 600. You have tech-centric concept Vb. view is as follows: to have a presence not just on TV, but All Best Western properties are on YouTube and Facebook. You have individually owned so although each Skif: What are the biggest chal- to worry about searches on Google must meet a list of standards, many lenges you’re facing to improve the and on TripAdvisor. Te technology maintain an independent identity. guest experience today? and how the competition has reacted Best Western has also been rec- David Kong: I think there’s so has evolved the customer expecta- 21 tion, which has caused us to really do it’s all about how we drive efciency much more conscious about value. We things diferently. I think, in general, through technology, whether it’s record need to be very careful not to compro- the biggest issue would be the ever-ris- keeping or data analysis with the aid of mise the value proposition. ing customer expectations, driven by technology. In a luxury segment, you can get technology. Skif: How has the hiring process away with it, so why not? I know the Skif: What’s one unexpected shif changed to match changes in the guest chairman of a huge hotel company you’ve seen in guest expectations and experience? recently made a comment, “You look demands in the last decades? Kong: Tere are a lot of things at airlines. Why are they so proftable Kong: I think we expected most that haven’t changed in that regard now? Because of all the extra fees of the changes to take place including including how you assess them to fnd they levy whether it’s for baggage or the Internet and how it’s changed how out whether they’re service-minded, certain seat assignment or change fees. we do e-commerce, evolving to mobile helpful, friendly, and professional. All those things that have made their commerce. Te one unexpected thing Tose things haven’t changed. What business so proftable. Why can’t the is the speed of hotel industry do the change. Te the same?” iPhones were Some ho- launched only sev- “Some hotels are going to start charging tels are going to en years ago and start charging now they’ve sold for things like early check-in, late check- for things like half a billion units. early check-in, Te adoption of out, because they can get away with it. late check-out, these smartphones I don’t know for how long they can get because they can and mobile get away with it. devices, and what away with it.” I don’t know for customers want to how long they can do on them, is all get away with it. If changing really re- the whole industry ally fast. Te pace goes that route, of change, to me, is unexpected. has changed is that we’re looking for then fne. If the whole industry doesn’t Skif: What role does technology whether that person can multi-task. follow suit, that could be problematic. play in improving the guest experi- Everybody is multi-tasking. Te guest Skif: How does Best Western’s ence? Is consumer-facing or back- is multi-tasking so you need to be able business model diferentiate it in the end technology more important or to handle multiple things all at the market place? efective? same time. Also, we assess if the person Kong: We are still in the hospitality Kong: In terms of the guest experi- is comfortable with technology, wheth- business. We talk about distribution, ence, the most changes are happening er they can pick up how to use a new technology, revenue management, but around how they book reservations PMS system or revenue management ultimately, we’re still in the hospitality with Best Western. Te technology system and if they can relate to a guest business. Hospitality is what we stand has driven the rise of online travel in terms of their devices. for, it’s what we sell for our industry. agencies, it’s driven the redesign of our Skif: What are your views on the You think about who can give hos- website, and it’s led us to now launch increase in hotel fees and surcharges pitality to and it’s still about people. mobile apps. Te second area is the levied against guests? Te way that we want to diferentiate experience at the hotel. Te high-speed Kong: I don’t think consumers like ourselves is around people, it’s around Internet bandwidth has to be raised it so we frown on it too. For example, hospitality. very quickly, very regularly, and smart- we have very strict rules as to what the A lot of training is actually about phones, in relation to entertainment, is hotels can and cannot charge. We allow caring and treating the guest like also a component of that. resort fees, but we require them to be family. You go to a lot of hotels and it’s Te check-in kiosk was rolled out fully disclosed and what we include just part of a corporation, everything is about a decade ago and just hasn’t in the resort fees, whether it’s drinks, very technology-driven, you check in been adopted very well; however, the access to the water park, or tips. Tere on a kiosk or mobile phone, you skip mobile check-in is something that we are very very few of these surcharges. the front desk, open the door with a are working on. People want to do We, in general, do not allow it. mobile phone. more with their smartphones. Even I think this depends on the Te next day you take a grab and our customer surveys are now avail- segment that you compete in. Our seg- go breakfast and you leave by mobile able on their smartphones. In terms ment, the broad mid-scale segment, is check-out. You have absolutely no of the back-ofce operations, I think still viewed as a value buy so people are interaction with anyone in the hotel.
22 How is that hospitality? You might Skif: Best Western puts out a lot of and Facebook. It creates something as well stay at a factory. You lose the content on its blog and across all social that people want to Tweet or write hospitality experience. media channels. Can you share your about on Facebook. Skif: How do you train staf to do thoughts behind this content market- Skif: How have you seen social that? ing strategy? media and content marketing change Kong: We’re in our third genera- Kong: We set out three years ago the conversation that you’re able to tion of award-winning training. We to become a leader in the digital world have with guests? talk about what each person can do to and have made a concerted efort to Kong: It makes it far more interest- make a special experience for a guest, do that. Setting the tone and having ing. If you were just doing marketing the role of leadership, how they can set a focus on what you want to achieve through the TV, whether it’s product the tone, how we can reach the level of is number one, the same applies to placement or an actual advertisement, hospitality that we want to achieve. We anything that you do. You have to have it’s so overdone. It’s got its place, but do a lot of training in that regard. We focus and leadership. We made that a it’s not powerful enough to connect in back it up with our system of hiring priority and then we beefed it up, had a meaningful way. If you have content people. We also focus on some key people help us write blogs relevant that’s relevant and people are interested touch points: check-in, check-out, the to that segment or create interesting in reading it then that’s far more pow- breakfast experience, high-speed In- things that could be tweeted or posted erful, especially if it’s not Best Western ternet. We want to use those key touch on Facebook. but a third-party like your friends or points to show that we are a brand that We also do charitable events like family or someone that you respect. cares. We want to do that better than ‘Walk Your Dog with Cesar Milan’ and Tat’s far more powerful and there’s an anyone else. that’s been a huge success on Twitter emotion associated with it.
23 Hyatt Hotels Mark Hoplamazian
Photo courtesy Hyatt Hotels
Hyatt Hotels came out of changing demands, why he changed is fguring out how to take full advan- employees' on-boarding process, and tage of what we consider our most the global recession with a how the hotel is using social media valuable asset, which is our people on jetpack strapped on. The to drive engagement internally and the ground in each market. If you fg- hotel group had its highest externally. ure out a way to allow them to increas- expansion year on record in ingly bring themselves to what they do 2013 and entered the all- Skif: What are some of the chal- and to bring their experiences and the lenges that you're facing to improve the learnings from our guests into what we inclusive sector with with guest experience today? do then there are huge opportunities new brands Hyatt Ziva and Mark Hoplamazian: Te biggest to take advantage of to really serve our Hyatt Zilara. It has beat issue is really the pace of change in guests diferently as time goes on. earnings estimates for terms of consumer behavior and atti- We've been really focused on trying the last eight consecutive tudes. Frankly, it's a great opportunity to promote and introduce design for us to take advantage of the changes thinking into our hotel teams by quarters in part due to and new opportunities to fgure out encouraging them to really take a fresh rebounding business travel. how to engage with travelers. look at everything that they are seeing It's also continued to be a leader For example, attitudes and behav- every day, seeing it fresh. We have this on social media through its Twitter iors have changed signifcantly in Chi- term that we coined, or that we bor- account, which reaches out to trav- na around what luxury means and how rowed, actually, from the folks at Ideo elers and guests to increase engage- people travel in just the last couple of called "vuja de," which is taking a fresh ment and brand awareness. years. Te same is true in India. I could look at something you see every day. Skif recently spoke to Hyatt CEO keep going around the world. Skif: What are some of the un- Mark Hoplamazian about guests' Te key issue from our perspective expected shifs you've seen in guest 24 expectations and demands? yourself focusing more on consumer over the past few years. Not just what Hoplamazian: Te biggest shif facing or back-end technology? you're doing once they're a part of the that we've seen is the explosion of Hoplamazian: Te answer is both. company, but the type of people you're engagement on social media. Over fve Technology is a great facilitator of bringing in and the process that you go years ago, we were the frst hotel com- experiences, but we don't really think about to fnd them. pany to utilize Twitter to engage with of it as the experience. It's a really Hoplamazian: Hiring great people our guests through @HyattConcierge important tool for us as we think about who can really bring our brands to and we've learned a huge amount. It how to bring the brand experience to life and create emotional connections just keeps morphing and manifesting life, but not as an end unto itself. A re- with our guests is the most import- in diferent ways. ally important focus is our colleagues' ant thing that we can do. Hiring and A couple of weeks ago, a consultant experience in hotels. on-boarding them the right way. that we do a lot of work with sent me a Hotel operating systems are notori- Again, through a lot of engagement note about how wrote about a beer app ous for having challenging user inter- with our colleagues, we recognized on Twitter and we ended up engaging faces and not a particularly great user that the on-boarding process that we with him and sending him another experience so we're developing a new had in place was very focused on the beer within moment. He thought, "Tis front end, basically, to simplify the in- rules and regulations of employment is wild. I rated the at Hyatt. We com- beer that I was pletely scrapped drinking and here that and have gone I am interacting “Technology is a great facilitator of towards a much with @HyattCon- more values-based cierge.” experiences, but we don’t really think and culture-based I personally of it as the experience. It’s a really approach to how am engaged with we introduce peo- our colleagues in important tool for us as we think about ple into the Hyatt a really diferent family. way. I'm part of how to bring the brand experience to life, Tey didn't a WeChat group but not as an end unto itself.” join the com- with our general pany because managers and we have a better our development set of rules and colleagues in regulations. Tey China so I'm keeping track of what terface. Tat's critical for us because it joined because of culture and emo- they're doing. Tey're posting things allows people to spend less time look- tional connections. Tat's what we lead about their everyday lives and what's ing at a screen and more time looking with and what we need to continue to happening at their hotels so it's really at our guests, engaging with them, and promote and celebrate, because that's a completely diferent form of engage- creating emotional experiences. what will allow us to continue to hire ment. Trough a lot of empathetic in- great people. One of the great things is people terviewing and real engagement with Skif: Switching gears a bit, what create new ways to engage on social our front-line colleagues, we recently are your views are on this increase in media. We did a culinary competition recognized that scheduling is a huge is- hotel fees or surcharges levied against in India a couple of weeks ago and the sue for people. We’re creating a mobile guests. staf created a hashtag #cookwithhyatt, app that links into our hotel operating Hoplamazian: Te key, from our which has been amazing in terms of system and allows people to do sched- perspective, is transparency and clarity. engagement among colleagues and uling on their own mobile devices. It's true that people want simplicity among guests and people who were All of these things that help to and they also demand transparency. there for the cook-of. enhance our colleagues’ experience We never want a guest to surprised at Te thing I love about this whole ends up impacting the experience of check-out. Tere are so many diferent shif towards how people are engaging our guests. Te technology itself is not models at diferent types of hotels for with one another is that it’s manifesting what we're focused on. It’s really using how to charge guests. Tere’s a lot of itself in how our colleagues are able technology to address key consumer diversity around it. to engage themselves, which I think is needs. Te key issue is just making sure super powerful. Skif: It sounds like making the that people understand what they're Skif: What role is technology play- lives of your employees easier is a being charged for and how that's going ing outside of social media in improv- focus, which is great, but I'm curious to show up on their bill because, again, ing the guest experience. Do you fnd if the hiring process has changed at all you don't want anybody to be sur-
25 prised at check-out. become something that a lot of other but again, we have to make sure that Skif: Andaz was one of the frst of companies have focused on. I think the it's about the experience and not about the frst lifestyle brands launched by a reason is because it really does refect, the device. Tat's really what we stay major hotel corporation. Do you think from an experiential perspective, a focused on. that Andaz was ahead of its time? diferent type of travel experience. Skif: Is there any risk in that, giv- Has it been a role model for other Skif: Is there anything that we ing employees this free range, let's say? hotel corporations launching lifestyle didn’t touch on that keeps you up at Hoplamazian: It's interesting. Te brands? night about the guest experience? theory, historically, has been you really Hoplamazian: Emulation is a Hoplamazian: Te most important need to script people. If lef alone, they great form of fattery so I guess we're thing is just recognizing that the guest make mistakes in what and how they being fattered. Andaz is very much experience is the result of engagement do their job. It’s my belief that there's a response to what we were already with our colleagues and that the def- much more risk in having a set of rules seeing in the marketplace. We were ap- nition of powerful brands is emotional that you're asking people to follow and proached by a bunch of developers, but connectivity to the brand. We've been taking the humanity out of that expe- more importantly we went out and did pushing very hard in this direction, rience than there is in letting people be a lot of direct research with travelers. to make sure that our colleagues can themselves. What we realized is that people really bring who they are directly into I have an expression, which is absolutely want to have a vibrant and the guest experience. "authenticity beats out precision every eclectic experience with respect to the It sounds easy and obvious, maybe, time," and that's a tenant that we design of the hotel, but also the kinds but when you really start to peel that believe in. It does require you to have of experiences that they could have. back, you recognize that you real- great leadership at hotels to make sure We really built a tether into the cultural ly have to end up undoing a lot of that when things fall outside the lines, communities in the cities in which we operating procedures that you may so to speak, that they get addressed, operate. Tat’s become the tenant for have thought were good ideas in the which is part of what being great oper- Andaz. past. Instead of giving people a map ators is all about. We have a salon series with which in terms of what they're supposed to When you do that, you really are we bring in local artists and expose do and make, give them a compass encouraging a lot of innovation and a our guests and the Andaz community and say, "You fgure out how you want lot of insights because our colleagues at large to amazing artists and people to bring yourself to bear.” A compass are able to actually interact with our in diferent artistic locations. I love the instead of a map is really one of the key guests and each other in a much more kinds of connections that we've been concepts that we are moving towards. elemental, human way, and we're able to make. Bringing that guest experience to learning so much more about what I think that that approach to serv- life is in the hands of our colleagues, people are really looking for and what ing a very important guest base has and technology defnitely enables that, they need.
26 Accor Hotels Sébastien Bazin
Photo courtesy Accor Hotels
Accor Hotels is one of expanding with 100 hotels planned for launched the digital strategy. It’s just a the largest hospitality Chinese tourist destinations, 20 hotels matter of 65 years in this industry since organizations on the under the new Grand Mecure brand the 1950s, of which the hotel operator globe and unlike many of planned for the Middle East. had been blessed for the frst 50 years its competitors owns and Sébastien Bazin joined Accor as to be, basically, the sole participant CEO and chairman of the board just in the value chain. Ninety percent of operates more properties over a year ago in August 2013 afer proft was derived from the hospitality than it franchises. building his career real estate invest- industry with the other ten percent in Te group recently announced a ment company Colony Capital. In a the hands of the intermediate actors, fve-year, €225-million digital trans- recent conversation with Skif, the rel- the traditional travel agent such as formation strategy, which includes a ative newcomer to hospitality industry Carlson Wagonlit Travel, American mobile-frst customer portal, a new talks about where he thinks the hotel Express, and others. platform for personalizing customer brands failed, the four characteristics Tere was a major shif in the last follow-up and service, easier payment that defne today’s guests, and why 15 years, during which you had what and check-in services, and online he thinks transparency is the key to I call the frst revolution. Te OTAs booking tools for businesses and meet- change within his organization. started replacing the traditional travel ing planners. An edited copy of the interview is agent and expanding very quickly. Accor reported its frst-half profts below: Ten six or seven years ago came the for 2014 rose 15 percent due to cost aggregators, which we call the me- cuts and strong demand from the Sébastien Bazin: If I may start on ta-searchers or the Kayak and Trivagos Mediterranean region, Africa and the what’s happened to the industry at of the world. Tey basically aggre- Americas. Te group is also actively large, it will explain the reason why we gated a lot of information and made 27 the booking decision-making process to have to manage energy cost, mainte- have the same technology and access to much easier. nance cost, or capital refurbishment. information. Ten you had the last revolution Tey think smart enough to under- Skif: How has the hiring experi- a couple of years ago, which I really stand the value-added chain; however, ence and process changed or evolved defne as the ‘disruptors.’ Tis a new what’s interesting is that all of them to match these changes in the guest customer-to-customer business model, depend on me existing. Without the experience? which happens to be Airbnb, Uber, and guy who actually receives the guest, the Bazin: Te technology permits me Lending Club. If you really look at the value chain is never going to exist. to be much more global, much more impact of those 15 years, most of it is Skif: I’m interested in exploring efcient in terms of speed and scale in customer-driven, guest-driven. It was whether consumer-facing and the selecting personnel and getting people basically meant to be provide an easier back-end technology is more import- to come to Accor Group through ac- route, easier access, and better deci- ant or more efective and how they corjobs.com. It has ofers being made sion-making processes for the guest. work together to improve the guest in 94 countries. Also, I can now actu- As a newcomer to the hotel in- experience. What role does each of this ally follow the career of my personnel dustry, I do not think we collectively, type of technology play in improving across departments. I get a record of Accor included, what they’ve done. react sooner to It’s more efcient the innovators of for me and more 15 years ago, the “We know for a fact that customers today rewarding for aggregators of six the associates of years ago, and the are going to be multi-brand and multi- Accor, because disruptors of two segment so the level of loyalty to us or they know that we years ago. I’m con- follow what they vinced that there’s some of our competitors is getting lower do each year. going to have a Skif: Has any- fourth and ffh and lower. Tey have multiple loyalty thing changed in revolution. cards with multiple groups. We also the type of people Skif: Why that you hire? As didn’t hotel know that customers we be connected in technology plays companies react a larger role on sooner? terms of global information 24 hours a the back-end of Bazin: It’s very day, 365 days a year.” hospitality, does simple. We all that impact who felt that the hotel you hire? industry would Bazin: I think not de-materialize, everybody would that the customer would always stay in the experience? like to say, “Yes,” but I’m not going to a hotel if he has to go to the hospitality Bazin: Tey work in tandem, one is say, “Yes.” It’s not because someone sector. If you went into the video or dependent on the other. You know that does not have any technology skill that book industry, you had that concern the customer is going to have a very that person should not be hired. Tank because the Amazons and eBays of efcient device on him. Trough that goodness we’re still living in an indus- the world were shipping products mobile device, you can have online try, which I call a “warm industry.” directly from your computer to your check-in, a confrming text, and send Te level of empathy, friendliness, and home. Our industry, thank God, still him a room number. You can make the capacity to listen to your guest is far has the basically receptive end with the customer feel that he has been identi- greater and far more critical than being customer so we felt that it may impact fed, waited for, and received a person- a technology geek. us, but that it wasn’t going to be that alized service. I need some good technology ex- brutal. In order to get that feeling through perts to come in, because they’re going Tat’s still true except you may to your customer, you need hotel to be knowledgeable and creative, but end up having the customer stay at employees to have the same devices to the vast majority of people working in your shop with very little margin. All be able to interact with the client and the global hotel industry have to un- those newcomers, when it comes to the understand how those devices work derstand technology without needing Internet players — Trivago, Expedia, in order to perform better, be more to be an expert. Booking.com — none of them want to efcient, and be proud of having the Skif: Accor is present in 92 coun- be in my shoes. None of them want a same access and technology. Whatever tries. How does the guest experience greater number of associate employees, my guest has, I need my personnel to change depending on which region the
28 Accor property is located in? Do guests more autonomous in their deci- whether we’ll do a good job or a bad have diferent demands in diferent sion-making processes and they’re job, but at least for anybody who wants parts of the world? becoming more and more commu- to watch what Accor is doing, they Bazin: Yes, wherever you have nity-oriented. For example, 75 per- have it on paper. It’s been outlaid and mobile devices in a great number and cent of guests will share good or bad we’re going to executive on it. as a greater percentage of the popula- experience. When you accept those We have a great beneft as we di- tion, the guest has more expertise on four points — multi-brand, connect, rectly operate and manage 70 percent how to use it and is more demanding autonomous and community-oriented of Accor’s network. Most of my com- because they are aware of the diferent — you better not fail. Don’t give them petitors contract 65 percent of their services, concepts, designs and hotels. a reason to not follow you. properties. If you are in a contract, you In the Middle East, for example, it’s Skif: Have you seen loyalty de- don’t have your hand on the opera- 95 percent adoption rate. In Africa, I crease at Accor hotels? tions. Since Accor is the operator for think it’s half of that. Bazin: It’s not going down because more than two—thirds of its proper- If you don’t ofer a guest what we’re making a very big efort towards ties, it’s my people on the ground and they’ve experienced someplace else being more disciplined and rigor- my responsibility. then obviously you deceive them. In ous, ofering better sof benefts, and Skif: Are there any plans to oper- places where there is less technology having guests understand that they get ate even more of the portfolio or move available, guests don’t have the same the exact same price going through towards more of a contract model? awareness so they’re not as pick as they accorhotels.com as they would get Bazin: No and I’m not saying that can be elsewhere. Tis is why the In- otherwise. It’s about making them feel one business model is better than the ternet has entirely changed customers’ more and more identifed, recognized, other. I respect the franchise model, expectations. Tey know much today awaited-for. leasing model, matching model, and about what exists in the hotel industry I’ve spent the last year preparing for owned model. Tey all have a good that they didn’t know ten years ago. our digital strategy launch. Te three merit. We, at Accor, started with the Skif: What other changes have you phases are very simple. First is make DNA of being an owner and operator, seen in guest behavior? a diagnostic of what happened to the which probably has something to do Bazin: We know for a fact that hotel industry over the last 20 years. with being away from America where customers today are going to be Second is have a vision for where we the franchise model has been for a long multi-brand and multi-segment so the want to be in ten years and what it is time. level of loyalty to us or some of our ywe should be doing diferently. Tird My model has greater volatility and competitors is getting lower and lower. is make sure you have an action plan, greater number of personnel being Tey have multiple loyalty cards with a four or fve-year period with human under my scope, but when it comes to multiple groups. We also know that capital and fnancial resources. making a transformation, I probably customers we be connected in terms of In today’s world, you have to be have more maneuverability than an- global information 24 hours a day, 365 extremely didactic and disciplined in other model. I say this, again, without days a year. launching those programs and being any critique on one versus the other. Guests are becoming more and transparent about it. I don’t know
29 Carlson Rezidor Hotel Group David Berg
Photo courtesy Carlson Rezidor Group
Carlson Rezidor Hotel Group Best Buy, he brings a fresh perspective us to make sure that we’re listening. I is in the midst of a brand to the challenge of refning the guest think that the stakes just continue to revamp, launching new brands experience in his frst hospitality role. get higher for delivering great expe- and reenergizing old ones like An edited version of our interview riences. A big area of focus for us is with Berg follows: looking at how we make the experience Radisson and Country Inn and more personalized for each of our Suites. The group recently Skif: What are some of the biggest guests. We like to call this “creating launched two new hotel challenges that you’re facing to im- bright spots for our guests.” brands: Radisson Red targeted prove the guest experience today? We recently undertook a global towards design-conscious David Berg: I should probably start study examining the entire customer by saying that we look at challenges experience from pre-stay to post-stay young guests and the as opportunities. Our foundational and identifed some hundred-plus Quorvus Collection consisting belief is that we really need to listen to touch points that a guest would iden- of independent luxury hotels. our guests and make sure that, what tify when he or she decides to go to David Berg was appointed the we call, guest-centric decision making hotel, stay at a hotel, and then leaves COO of Carlson in 2013, charged with is present through the entire organi- a hotel. Tose are a hundred-plus leading and managing the company’s zation. From the cleaning crew to the challenges or opportunities for us, to global hotel business Carlson Rezidor COO, we make sure that the guest make sure that we’re anticipating what Hotel Group, which includes more is at the center of all of our decision the guests want. It’s our responsibility than 1,300 hotels under six brands. making. to make sure that we’re listening to the Coming of a number of executive I think some of the challenges are customer so we can satisfy them and roles at restaurants and retails includ- really staying ahead and anticipating they have a delightful experience. ing Outback Steakhouse, GNC, and guests’ expectations, which requires Skif: What are some of the biggest 30 changes you’ve seen in guest expecta- there’s a rising expectation that hotels an app called iConcierge that allows tions and demand? not only have great Internet service, guests to use their smart device to Berg: We certainly believe that a but are also on the cutting edge of order room service, an extra pillow, hotel has to be clean, safe, and welcom- technology. When guests come into a or local show tickets. We piloted the ing, but that’s barely the price of admis- hotel, they want to see and experience app last year and are rolling it out this sion these days. I came out of retail and something new from a technology year. if you want to order room service restaurants and retail so I think there standpoint. or you want to order an extra pillow are a lot of comparisons. One of them Skif: What role does technology or you want to order tickets to a show is the access to information that our play in improving the guest experi- in what local community where we’re guests now have and their expectations ence? Is consumer-facing or back-end staying. We piloted that program last for a real-time response. It’s no longer technology more important or efective year and they’re rolling it out this year. the case where you leave a hotel and a at improving the guest experience? What this underscores is the week later you talk increasing need to about either the have mobile apps. great or lousy ex- I was at Hi-Tech perience that you in Hong Kong a had. Tat’s right in “It’s no longer the case where you leave couple of weeks the moment now. a hotel and a week later you talk about ago where leaders I think that’s a from Facebook signifcant change either the great or lousy experience that and Travelocity that we’ve seen. both said that From a retail you had. Tat’s right in the moment now. more than sixty comparison, the I think that’s a signifcant change that percent of their mass Sunday trafc in China circular, buy-one we’ve seen.” comes from mo- get-one free news- bile smart devices. paper ad is a relic As we think about in our business. international and It’s really about millennial-mind- how we make it ed guests, the personal to the guest so that when they Berg: It’s really hard to separate ability to have app for smart devices is come to our hotel we know what their the two. We always start with asking, critical for us. needs are and we can try to address “What’s the guest insight? What are we Skif: Carlson Rezidor has hotels them the best that we can. I fy hun- trying to address? What is the guest located around the world. How do dreds of thousands of miles a year and asking for?” If technology can help us guest expectations change based on it never ceases to amaze me that Delta address that issue via a customer-fac- location? still doesn’t know Fresca is my favorite ing application then we’ll build that. Berg: Tere are a lot of common- drink when I sit down. Clearly you’ve got to have the backend ality in what guests generally expect. Skif: Have there been any unex- that supports it. We allow our franchised, managed and pected changes in guest expectations Again, going back to my retail days, owned hotels to tailor the product and or demand? you could have a very sexy awesome services for a particular market. If I Berg: Access to information has looking product on the shelf, but if you go back to my restaurant days, it’d be really accelerated and it’s something don’t have the supply chain and distri- 70 percent core items and 30 percent that we need to continue to anticipate. bution channel to put that product in localized items. We know that the average guest looks stores then it’s not going to work. You’ll never not know that you’re in at fourteen diferent hotels before she In my opinion, you can’t separate a Radisson or a Country Inns & Suites books a room. In retail, as an anal- the two, but we always start with ask- whether you’re in Seattle or Singapore, ogy, big box retailers ofen become ing, “What is the guest asking for? Are but we do allow for some individuality showrooms where folks will come in, we anticipating the guest’s needs and tailored to our guests in those local learn about a product or a service, and desires?” Ten we use technology to markets. then have multiple distribution points deliver on that. Skif: Has hiring changed or where they’ll buy it. Skif: Has the Radisson Red app evolved at all over the years to match Te other thing that’s unexpected, been rolled out? If so, what kind of these changes in guest expectations? in my opinion, is that things that were usage have you seen? Berg: Hiring is one of the things once diferentiators have very quickly Berg: We haven’t rolled out the that we’re proudest of. We want to become requirements. For example, Radisson Red app yet, but we do have make sure that we hire folks who are
31 refective of the guests and have a should hug a guest.” Te number of derstand the proftability that they’ve service-oriented, caring spirit. We hire letters and comments that we get about driven through fees, baggage fees or folks that know how to deliver a great Marsha and her ability to engage guests change fees, but it does not feel very guest experience and we train on that. is phenomenal. As proud as we are of guest-centric to me. One of things that I think we’re quite Marsha, I am equally as proud that her Skif: What other lessons have you unique in is unleashing the power of general manage allowed her to bring taken from the retail and restaurant our people and really allowing our that into the workforce. world and applied to hospitality? individuals to bring their unique skills I think it’s really, really important Berg: I think the one universal and capabilities into the work place. that we actually have sort of the cour- lesson is absolutely making sure that For example, we hand out an age to allow folks to bring their unique we’re listening to our customers and “Employee of the Year” award at our skills into the workforce. guests and delighting them in the annual convention. Tis year it was Skif: What is your view on the in- moment. Even if there’s a problem, our given to a woman name Marsha who crease in hotel fees across the industry? associates need the authority, freedom, is the breakfast hostess at the Country Berg: I would ask you, as a guest, and confdence that they can solve Inns & Suites in Hanover, Virginia. It’s how do you like it? How does the problems without having to consult the a self-service model but Marsha hugs guest feel when they checked into a three-ring notebook or make six calls. the guests. hotel with a $100 rate and when they Tey can actually make the guest expe- I can assure that nowhere in our checked out it ended up being a $150. rience relevant and solve a problem in written standard operating policies I don’t think it’s very positive. Looking the moment. is there a page that says, “Everyone at the aviation industry, I certainly un-
32 La Quinta Inns & Suites Wayne Goldberg
Photo courtesy La Quinta Inns & Suites La Quinta Inns & Suites has La Quinta CEO Wayne Goldberg, I know exactly what my consum- had a busy year. After raising who has been in his position since er wants from me. We speak to our 2006, started his hospitality career at consumers all the time. We’ve done $650 million in its initial U.S. Red Roof Inns and has an astute view an awful lot of work on the brand and share sale in April, the hotel of the select-service market and hotel we have been very strategic in making brand rolled out new products industry. An edited version of our sure that the things we are doing deliv- that allow guests to select interview with Goldberg is below. ers exactly what our consumers told us their arrival time and receive they want. Skif: What are the biggest chal- Tere’s three words that describe a text when their room is lenges you are facing to improve the what our consumer wants from us, that ready, introduced a new guest experience today? we focus on every day. I know that our prototype that incorporates Wayne Goldberg: I think, for any- consumer wants to be assured. Tey smart design and smaller one, the biggest challenge in meeting want to know the moment they pull spaces, and refocused its the guest expectation and experience in the parking lot that they made the is to really understand what your right decision. Tese are their words, marketing eforts to attract consumer wants from you. For any not mine. Tey want to be able to get business travelers. company or brand to make decisions, I into their room and they want to settle La Quinta’s few-frills business think you really need to make sure that in. Tey want it to be their space, not model is also becoming increasingly you’re getting the right insight directly mine, and they don’t want it cluttered attractive to U.S. lodging investors from the consumer. People ask me all with our propaganda. who are drawn to the lower operating the time, “What does your consumer We’ve taken these learnings and costs and high returns at select-service want from you? What does La Quinta these lessons from what the consumer brands. stand for?” wants from us and we implemented 33 changes in the way we execute. For ex- For example, we’ve created a plat- no longer put phone switches at the ample, the way we market to the guest form by which our guest can use our hotels and we haven’t put a phone today in the guest room is dramatically television as a plug-and-play capability. switch in a hotel in over fve years. We diferent than the way we did many You can plug in your laptop or iPad started experimenting with technology years ago. and use the television as a monitor. way ahead of our industry and our We no longer put large amounts of You’ve got to make sure you have space and learned that you don’t lose marketing material in the room. Today, enough outlets for your guests to be any functionality. We put the service all we put in the guest room is a little able to plug everything they need to on the voice in the cloud, so to speak. card called “Ready for You,” which plug in to and charge. Customers have absolutely no idea that is our branded customer experience, Wi-Fi is another great example. there’s not a phone switch because it and it’s signed by the housekeeper so We changed our minimum bandwidth doesn’t impact them. you know that your room is ready for standards from a minimum of six megs On the front-end, there’s our you. Tere’s also mobile platform. one very small Guests told us that marketing piece when they’re on a for guests to enroll “We decided that we were going to be mobile device that in the frequency they want it to be program if they the brand that owned optimism. Our easy. Tey want to choose. be able to engage Te last thing goal is to be the bright spot at the end of in a very quick, that we learned that traveler’s hectic experience. Wake simple manner. was that while our We designed our consumers make up on the bright side has become a real mobile platform it very clear that with that in mind travel is hectic, powerful way to engage our consumer so LQ.com on a they are generally smartphone or optimistic about and drive loyalty.” tablet will bring the unknown users directly to day approaching. the platform. We took those We’ve also learnings and launched our marketing of bandwidth to a minimum of 50 and done it with ‘Ready for You,’ a plat- campaign “Wake Up on the Bright then up to 100 megs of bandwidth. Te form by which customers on desktop Side.” We decided that we were going guest have told us, and they have made can choose their own arrival time and to be the brand that owned optimism. it very clear, that they want to stream whether they want to be alerted that Our goal is to be the bright spot at the video and use multiple devices. In our the room is ready via email or text. end of that traveler’s hectic experience. segment, in our space, bandwidth and We’ve seen a very, very high success Wake up on the bright side has become high-speed are always free and we have rate of folks opting into this program a real powerful way to engage our con- found a way to do this in a way that in a very short period of time. It’s sumer and drive loyalty and engage- gives the guest what they expect, what about, again, continuing to listen to the ment through diferentiation. they have mandated, and still being customer. Skif: Are there any unexpected able to aford to deliver it free. Skif: How has the hiring expe- shifs you’ve seen in guest expectations Skif: Technology is clearly playing rience changed or evolved to match over the past couple of years? a role in improving the guest experi- these changes, both in guest demand Goldberg: I think the biggest thing ence. Do you see consumer-facing or and how your trying to respond to that’s changed is that it used to be back-end technology as more import- that? about giving technology to the con- ant or efective at improving the guest Goldberg: We’ve embarked on a sumer. Tere was a time where hotels experience? little bit of a diferent strategy over the were putting DVD players and fax Goldberg: Tey’re both very last few years in which we have really machines in guest rooms and fguring important. What I will tell you is that, leveraged outsourced partners for a lot out how to give all this technology to to me, it’s all about diferentiation and of our functionality and capabilities the guest. What’s really changed is that fguring out how to do things difer- from a technology standpoint. We are today it isn’t about giving the guest the ently from our competitors. A room is not the technology experts. We went technology. Today it’s about giving the a room is a room and our segment has away from building the technology and guest the capability of leveraging all of become more of a commoditized type having proprietary code to really man- the technology that they’re traveling business. aging outsourced relationships today. with. For example, on the back-end, we Rather than building something
34 that’s big and clunky and expensive, we realize, particularly when we start business model. We will continue to outsource things to the right partners, talking about things like accessing a keep it a very simple business model. manage those relationships, and now guest room with a credit card. We don’t I do not believe that fees are the right have a more scalable business than store guest data on a key card for a ways to drive revenue. I think that they beforehand. We can grow and double guest room, but if you’re using a credit are problematic when it comes to guest and triple the size of the company card then there is guest information experience. without having to add large amounts on that credit card. As technology Tere is a reason that the airline of infrastructure. We have technology evolves and these processes become industry gets the kind of guest satis- on tap. more commonplace, there’s a lot more faction scores they get and I think that We have also created a whole new security ramifcations that need to be it’s a shame if we start seeing the hotel security function here and recently thought through and what they mean industry start embark on the same hired a Chief Security Ofcer to make for guests’ security and safety. types of experiences. But I don’t see certain that we’re doing all of the right Skif: What are your views on the that taking place in our industry. I’ve things to combat cyber security and increase in fees levied against guests in actually seen the full-service guys even protect our guests and their infor- the hospitality industry? looking at the select-service models in mation from these folks that are out Goldberg: My views are very sim- the mid-scale space and say, “If they there. We have engaged a number of ple. I’ve been in this business for a long can deliver it to the guest then we’ve outsourced partners and created a time. We are in the select-serve space got to fgure out how to do the same whole organization to make sure that and I believe that if I have to start thing.” we’re doing everything in our power to looking for ancillary ways to drive rev- It’s always amazing to me that the be ahead of the cyber thieves. From a enue and proftability because I can’t select-serve, mid-scale market that we cyber security standpoint, we’re trying do it through the room, the price of give it away. Whether it’s breakfast or to make sure we’re at the forefront and the room, then I am, in some respects, high-speed Internet, our full-service cutting edge of doing everything and in the wrong business. Ninety eight competitors are still nickel-and-diming more to be ahead of the game. percent of all our revenue comes from guests for every diferent service. I think it’s even bigger than we the sale of a room. It is a very simple
35 Wyndham Worldwide Stephen Holmes
Photo courtesy Wyndham Woldwide
Wyndham Worldwide help of technology. right there on our website. Tat’s could be considered the An edited version of Skif’s conver- responding to an expectation of the ultimate hospitality business sation Holmes can be read below: traveling consumer. If you don’t give it with formidable vacation to them they they’re going to go fnd Skif: Can you please explain the it so you might as well ofer it up to rental, timeshare and hotel shif in guest expectations and de- them. Tat’s one aspect of the shif in operations around the world. mands that you are seeing? technology — it’s available to everyone. Wyndham Hotel Group launched Stephen Holmes: One is the advent Te other shif in technology is its frst multi-brand TV campaign in of ubiquitous technology and data the generational shif. Millennials May 2014, has considered using guest that’s available to all consumers. If a will soon be, soon being 20 years, the photos as parts of its new multi-million consumer is going to a certain market main consumer of our travel product. dollar content relaunch, and continues and knows there’s a bunch of diferent Right now it’s still the baby boomers to expand throughout Africa and the hotels then they want to be told what and the following generations, but the Middle East. they’ll like and they don’t want to hear millennials are coming along in a big How does a corporation with it from the hotel. Tey want to hear it way and they come along with diferent millions of properties from hotels to from a third-party site so something expectations. To them, a smartphone is rental cottages keep track of evolving like TripAdvisor. something that’s always existed. guest demands? Wyndham Worldwide We started putting TripAdvisor on Access to the Internet is something CEO Stephen Holmes boils it down to all of our websites. When a consumer that is, basically, like oxygen. Tey are listening, which puts the company in goes on our website for a Days Inn, very technologically savvy and very a position to adapt and grow with the they can see the TripAdvisor rating aware of what’s available out there. 36 Tey want to utilize all the resources on in the marketplace on a real-time Internet is something, like have the that are available to them to make sure basis then interacting with consumers electricity or the water running, should that they’re having a great experience. will be very difcult to do in a way be available. Frankly, not to sound contrite about that’s meaningful and delivers accurate What do I think of an increase in it, it’s forcing the hotel industry to do information. I think the back-of-house fees? I’m not a big fan of it. I think you a better job at customer service. It’s infrastructure is very very important. should get quoted a price and that’s the forcing us to get a better game. We Skif: What has the hiring expe- price that you’re going to pay. Obvi- probably should have always had a rience changed or evolved to match ously, there are taxes but, for the hotel better game, but it’s forcing us to have a these changes in the guest experience itself, I’d like for them to charge a fair better one. and expectations? price and include everything other Skif: How is Wyndham respond- Holmes: Hiring is an important than the major items like meals or ing to these changes in guest expecta- part of it. We have a very people-fo- laundry. Tese fee trends have an ebb tions? cused environment and a culture that’s and fow to them. Tey come and go Holmes: We respond by trying really built around people. When just as they have in the airline industry. to understand the needs, wants and you ask how does hiring impact your Most of our hotels are in the economy desires of our to mid-scale sec- customer. Each of tor so we probably our businesses is don’t have as many always listening to “Access to the Internet is something that of those fee situ- our customers and ations as you fnd analyzing develop- is, basically, like oxygen.” in other hotels. ments. Listening is Skif: Te a very important change in custom- part of being in a position to be able thoughts about guest experience and ers expectations in regard to technol- to respond. We have to have the right delivering it, I’d say it’s all about our ogy, how is that afecting the vacation people who are attuned to what’s going people. We have a very interesting, rental business? on in the marketplace, understand the customer-centric, guest experience-fo- Holmes: On the vacation rental technology that’s available out there, cused philosophy that we call “Count side, we have a managed rental busi- and understand how to apply that on Me.” ness in which we manage the rental of technology to our business. Frankly, we Tat’s our customer service buzz- customers’ homes and handle every- do better in some businesses than in word. What “Count on Me” means is thing from advertising to check-in to other businesses within our umbrella that we’re going to be focused on being checking on the facility afer a few days of businesses. We need to be on top of accountable, responsive, and deliver- into a guests’ stay. what’s out there and actually ahead of ing a great experience. It’s those three We are very much a hands-on the curve. elements. It permeates our workforce managed rental business but technol- I would also step back here and so when we’re out hiring, we’re looking ogy has played a great role in allowing make a comment on is how we really for people that will ft into the culture us to deliver our product, which is the have two customers. We have the that we’ve built. Te culture of being home or the cottage that we’re renting consumer and all of our B2B custom- responsive, being respectful, and being out for the consumer. It used to be a ers. For us, a hotel franchisee is our prepared to deliver a great experience. business that was basically handled customer and then the consumer who Skif: What are your opinions on by brochures being displayed in travel puts his head in the bed at night is the fees levied against guests? agents’ ofces. customer of our franchisees. Holmes: I don’t think it’s anything Now everything is available online. Skif: How important is back-end new. Fees have been an important Technology has also allowed us to add technology for improving the guest part of how hotels made money for a new feature that we’ve been rolling experience? Is it more or as important decades. It used to be the big fee was out over the last couple of years, which as consumer-facing technology? for watching movies or telephone is a yield management feature. We can Holmes: Back-end technology is usage. Te hotel industry has always determine what the pricing of your critically important. Frankly, I don’t had the fee structure, but just like the home or cottage should be for the think you can do consumer-facing airline industry that started to charge consumer based on trends that we see technology without it. If you don’t have for bags, it is looking for ways to gener- happening as well as historical infor- a good foundation then going out and ate profts. Yes, I think there are hotels mation like large events or weather trying to interact with the consumer that have added diferent fees now. Te patterns. We have a very dynamic in a diferent way will be futile. If you one that I fnd, as a traveler, the most pricing system for the rentals. can’t access your inventory, if you don’t ofensive is Internet fees. Te majority Technology has been a big boon have the right pricing availability, if of our hotels, at least domestically, for us. you can’t be responsive to what’s going don’t charge Internet fees. I think that 37 Insights Why Every Hotel Brand Wants in on the Boutique Business
The circle is now complete. big into the market with Autograph Since then, brand consistency has InterContinental Hotels Collection, Moxy, EDITION and AC shifed from a positive business driver Group (IHG), the world’s Hotels. Internationally, Melia’s ME to a toxic mark of shame, quickly. largest hospitality brand, just brand, Carlson Rezidor’s Quorvus and Today, digital communications acquired Kimpton Hotels, the Radisson Red initiatives, and Shan- have helped remove much of the fear gri-La’s new Hotel Jen are just a few of the unknown, obviating the need world’s frst boutique hotel more examples. for brand experience sameness. At brand. Te factors spurring this trend the same time, the explosion of digital But what does a boutique hotel are manifold, beginning with rapidly content and social media has viscer- even mean anymore? changing demand from a younger, ally promoted the value of authentic, Starwood Hotels was the frst large more well-educated and well-traveled hyper-local, destination-specifc, chain to jump into the boutique/de- consumer who actively avoids any type experiential travel to millions of trav- sign/lifestyle segment on a large scale of generic travel experience. Only two elers attempting to build social equity with its successful W Hotels fag, and decades ago, hotel brands marketed based on having unique experiences. since then many of the global hotel themselves based on product consis- Social media exposure has been a groups have followed suit through ei- tency, especially attractive to con- big reason behind the rise of so many ther acquisition or new development. sumers traveling abroad in a rapidly suddenly trendy destinations from Hyatt launched Andaz, Hilton globalizing marketplace with so many Vietnam and Morocco fve years ago has Canopy, and Marriott invested new emerging destinations. to Iceland and Bhutan today. Te 38 same is true for the rise of cult-like citizenM, will ofer a semblance of Avi Brosh, founder of Paligroup “tribes” slavishly loyal to lifestyle “unique” experiences based simply on Hotels, broached this topic at the frst hospitality brands ranging from Ace low supply. annual Skif Forum in New York this to Airbnb. How many people today Another point of consistency for year. make travel purchase decisions based all of these legacy brand-operated “It’s 2014, what does boutique on how their experience will play out lifestyle hotel brands is price. For many even mean today?” he said. “I don’t re- on social among their personal and travelers, they are expensive, especially ally know what it is.” Brosh then made professional networks? in major markets. Prohibitively so. Te the assertion that boutique hotels have Tere’s no data on that but the big travelers of tomorrow who are hungry become a victim of their own success, hotel brands sure want to tap into it, to immerse themselves in a destination because they’ve become an “asset which is driving so much of this new spend less time in a hotel than in the class” not unlike shopping malls and development around “authentic, local, past, unless it’s a resort experience, industrial parks. experiential” hospitality to the point and their travel budgets are adjusting “It’s no longer a stylistic bench- where those words are beginning to accordingly. mark or authority in experiential chafe. Because, W Singapore doesn’t Some brands have adapted with authenticity,” he said. “I would suggest really feel like an entirely diferent smaller rooms, stylish but inexpensive that boutique hotels as they’re known experience than W South Beach. You furnishings, and expansive lobby/F&B in the asset class capacity have be- pretty much know what to expect experiences, but price is becoming a come spiritually bankrupt.” Summing at each property. In fact, the new huge purchasing factor for people who up, Brosh explained that “boutique” to W Bogota that opened this week is want to travel more and farther away as him equates with independent hotels, newsworthy because it’s in Bogota, efciently as possible. versus properties developed by large not because it’s a W. Te same thing Yes, efciency hospitality is the brands, committees and traditional could be said about a Kimpton in D.C. new black, which brings us to the place-making techniques designed to or San Francisco, or a ME in Cancun shared lodging and hybrid hotel/hostel increase returns for stakeholders. or Madrid, just as much as an Inter- models. Tey are the two most excit- From a business perspective, the Continental or Marriott in Prague or ing, unpredictable, spontaneous—and beauty of the IHG/Kimpton deal is New York. more importantly, afordable—hospi- the synergy between the two brands Meaning, these boutique brands tality sectors today, which are still very and their reward programs, espe- that are so popular today are evolving much in their nascent development cially for business travelers, and the into a reincarnation of the Hiltons stages with infnite potential to change overnight ability for Kimpton to scale and Hyatts from previous generations. travel over the next two decades.In no globally. For a business traveler, all of Since the parent hotel groups are means is that to suggest that all of these that is a really great thing. public companies, consistency is still lifestyle brands will lose marketshare Many Kimpton loyalists, however, all-important to their bottom line. All to the point where they’re unproftable lamented big brother taking control we’re talking about here is just a shif to keep building. Te exponential rise over their beloved boutique brand, in room count and design. In efect, of middle class travelers globally will but that was to be expected. When with so many suppliers evolving in the ensure their long-term success and you create a brand that impacts your same way to distance themselves from expansion. What it does mean is that consumers on such an emotional the mass-market hotel of the past, boutique hotels are drifing toward the level, many of them don’t take kindly they’re developing the mass-market center. Tey’re becoming mainstream to an outsize overlord scooping up the hotel of the future. while losing some of their counter-cul- product. At the same time, it’s a little ture mojo due to basic supply and naive to think IHG is going to mess Is Efciency the New Experiential? demand economics. with the Kimpton formula too much. Simply put, high concept design has And that’s exactly the point—it’s Tere are some exceptions. Brands been democratized. Te boutique hotel become a formula. Tat’s fne for the that will choose to remain small in of today is becoming a commodity, no P&L sheet, of course, but there’s a scope, such as Ace, 21c, 25hours, matter how many fashionable design- massive generation of travelers out Grupo Habita, Unlisted Collection, ers, architects, chefs and retailers you there seeking something diferent. and perhaps others like Andaz and throw at it.
39 Luxury and Lifestyle Brands
40 Four Seasons J. Allen Smith
Photo courtesy Four Seasons
With fewer than 100 parts at many other hotel brands, he their experiences. did not spend decades in hospitality. J. Allen Smith: Well, obviously, properties, Four Seasons Rather, he was plucked from the chief I can opine on how Four Seasons is as a hotel brand regularly executive role at Prudential Real Estate thinking about it most authoritatively. punches above its weight in Investors, where he had developed a Tere are probably a couple themes the crowded hospitality feld. deep knowledge of the real estate and that Four Seasons is focused on. It is bulking up though, with development side of the hotel busi- One is this notion of customiza- ness. Tat has come in handy as Four tion, which frankly is something that 70 openings planned over the Seasons rethinks the model for getting I think many people would associate next six years. properties fnanced, developed, and Four Seasons with doing very well Over the last weekend in October, built. heretofore, in terms of understanding it opened its largest property, which is Skif met with Smith at the compa- our guests, catering to their very spe- the only independent hotel on the Walt ny’s new Orlando property. An edited cifc needs, and that sort of thing. Disney World grounds in Orlando, version of the interview is below: What is apparent from the way and a new property in Moscow, Russia, technology continues to develop and which was built on the site of a land- Skif: Afer the terrible 2008-2009 penetrate our lives in all realms of mark Soviet property. years, a lot of companies reassessed, re- consumer activity, is that the consumer CEO J. Allen Smith stepped into his evaluated, looked at their priorities. I’m is expecting that you know ever more role in September 2013. As hotel CEOs wondering what you feel the current about them and their preferences. go, he was rather unexpected. Unlike state is now and how hospitality brands Tat’s part of why I say that part of our his predecessor, as well as his counter- are thinking about the guest and in challenge, and part of the challenge 41 that much of the industry is dealing very specifc about what they want and against our pipeline of talent and try with right now in diferent ways, is how they engage with things. Tere’s to be very honest with ourselves about how we transition from a high-touch an app for everything now, right? I where we have gaps. More ofen than relatively low-tech business to one that think that sense of empowerment and not, the gaps are not driven by the is high-touch enabled by high-tech. choice that the consumer has about technical knowledge of running hotels. In our case, part of what gives us a how they engage with us is also a really Tat’s something that we obviously great deal of confdence in our ability important feature. have tremendous depth in and are to do that efectively, is that notwith- It’s interesting to me because it’s exceptional in. standing all the focus on technology, not just how they engage with us. It’s Te gaps are ofen around lan- at the end of the day, the delivery of also how they use the space that they guage skills. If we’re going to open a those services is still through people. occupy. Te spaces we design -- and I new hotel in Tokyo, for example, we We have a service delivery mechanism, think you’re seeing this more broadly would like to have a Japanese-speaking if you will, through these extraordi- through the industry -- they’re becom- general manager. We’re working on nary people who work in Four Seasons ing more fexible. Tey’re becoming several properties in Brazil. Having a that some would say is unmatched. I more multi-purpose. Giving them Portuguese-speaking general manager think as we continue to progress and more optionality about how they in- is important to us. Again, that goes to we make that transition, our capacity teract with the space and use it. Tose the importance of the localness of the to both anticipate and respond to our are some of the other things that are experience we’re providing and the guests’ very specifc and customized important. guests we serve. needs will be even greater. I think a big part of what feeds Te good news is we have enough Skif: In knowing your customers the loyalty we have from guests is that advance knowledge of our need for and delivering what they’re expecting sense of personal relationship they people with these characteristics, we’re in terms of, “You should know me,” are have with our people. Tat’s why I go either able to cultivate them internally there any concerns of balancing priva- back to one of the real underpinnings or know that within a certain time cy and knowing too much? of our business that I’m very focused frame, we need to go to the market, Smith: I think you raise an excel- on making sure we continue to nurture bring such a person in, acculturate lent point. Tat’s where this can’t be and cultivate is this whole idea of the them to Four Seasons and then get rote. It can’t be mechanical. Tere is an culture and the people of the company, them prepared for that assignment. element of judgement that goes into which is unique, distinctive, and criti- It’s those two things, the growth the use of this sort of information, just cal to our success going forward. in the hotel assets and the growth of like there is today. Tere’s a fne line, as Skif: As you grow, and you’re in the talent go hand-in-hand, and they you point out, between understanding the middle of a big growth burst right can’t be thought of independent of one your guests and making them feel like now, having both people who are another. there’s a surveillance system watch- unique enough who can deliver and Skif: For a brand that has such a ing them at all times. Tere’s a sort build those relationships, those will be close relationship with their guests and of transparency that’s important that harder to deliver as you grow. As you the guest experience is put on such a the guest feels, that they understand get bigger in scale, how do you make high level, you don’t have a loyalty pro- what’s going on. On some level a form sure you’re still able to deliver that per- gram, which is diferent than, I think, of -- whether it’s explicit or implicit -- sonalization, those special experiences, everybody? consent to what we know about them. and build those relationships? Smith: It is. Tere are some guests who are very Smith: It’s a good question. It’s Skif: Why not, and what other forthcoming with their preferences, one I frankly get asked ofen, both hotels get from loyalty programs, how their personal characteristics. Tey internally and externally. From a very do you get that as well? want us to know a lot about them. practical perspective, we don’t think Smith: Yeah, it’s a really good Tere are other people who are far about our pipeline of growth in terms question. When I talk about our more reserved, and they’re not com- of properties without thinking about transition from high-touch low-tech to fortable with that. I think our challenge our pipeline of talent to support that high-touch enabled by high-tech, that’s is to be able to discern that diference growth. a dimension of that. Our focus, and and respond to each individual as they We’re able to look out over the next we are very focused on it in terms of a want to be engaged. I think it speaks fve years and know with some level of “program,” is on recognition. Loyalty to this other theme around that we’re certainty, when we’re going to be deliv- is associated with, if I demonstrate my seeing, the notion of empowerment. ering properties, where we’re going to loyalty by staying with you, I accumu- People want more control over be delivering properties or hotels, and late points and get free things. their experience. Some of that does what are the unique characteristics we Our view of our guests and cer- come from the way in which technolo- need of people leading those specifc tainly our feedback from our guests gy is creating an ability for people to be properties. We then match that up is they’re far less concerned about
42 accumulating points to be redeemed as we think of it, is not this homo- focus on, there’s a tremendous amount for rewards as they are being in a posi- geneous body that all have the same of wealth in that group. Part of what tion where they’re recognized and we characteristics regardless of where we’re trying to make sure is that we understand their preferences and can they originate from. I think for many provide the environment, the physical serve them in that highly personalized people, Four Seasons is an aspiration- product that people fnd appealing, the way they’ve come to expect. al brand. Given its position in many services that they fnd appealing, the You will hear, over the course markets around the world, it’s where food and beverage experiences that of the near term, our talking about they seek to stay. they fnd sort of dynamic. Not just a programs related to recognition that If you think about China, one of hotel service but these experiences that we will be undertaking, but again, as the things that clearly will be profound, are appealing both locally and to the I said, it is focused on the distinction I think, over the coming decade, is hotel guest, so it’s sort of a scene. Tere between recognition and rewards. One the infuence of the outbound travel- is this kind of mix of qualities that we is recognizing you, understanding your er from China. Obviously, we’re very have to be able to provide that make it distinct preferences and desires and focused on developing our portfolio of an appealing place to stay. being able to accommodate those, as properties in China, but the outbound One of the things that’s striking to opposed to a points-based program. I traveler may be even more profound me is that luxury segment is becoming actually think it’s very crowded. very compatible People ask me all with what our the time, “Who guests are actually “Our view of our guests and certainly do we compete looking for. with?” While Skif: Does our feedback from our guests is they’re there are some that mean that far less concerned about accumulating major brands we you’re thinking compete with, of rolling some- points to be redeemed for rewards as the truth is we thing out that is a compete with rethink of loyalty they are being in a position where they’re anyone in the programs, or is recognized and we understand their luxury segment in that just saying any market we’re that you are going preferences and can serve them in that located in. As to focus on that? you heard today, Smith: I antic- highly personalized way” we’re in over 90 ipate our rolling markets in over 35 out a program that countries, so that’s is focused on rec- a lot of people we ognition. Look, there are clearly brands for companies like ours. Tat afuent compete with. with very efective loyalty programs. Chinese traveler is one that obviously Many of those qualities we have Tey work for them. I think what we’re we’re trying to make sure that they to continue to deliver on. Te service focused on is developing a program have a sense of identity of our brand, promise that we deliver resonates with that is clearly compatible and refec- based on how they perceive us on the all kinds of people and is something tive of what Four Seasons represents mainland. that we continue to be very focused on. and how Four Seasons engages with Capturing that guest, though, is Skif: Since Four Seasons is primar- its customers and what Four Seasons going to require that we do things ily a management company as opposed customers value the most. Consistently very diferently than what we do for to owning a ton of real estate, you have in our engagement with our guests and some of our other customers and part the guests on one hand, and you have talking to them, it’s those elements of because of the scale of the opportunity. the owners on one hand. How do you recognition that they’re looking for as In terms of having Mandarin-based go about convincing the owners, who opposed to points that translate into services that we provide or Man- although they do like investing and free nights. darin-based concierge services or things like that, that what you provide Skif: A lot of hotels, even luxury whatever the case may be. Making sure to the guests doesn’t come cheap? products have sub-brands so there’s that we have the services and the form How do you balance the relationship multiple entry points to introduce new of engagement with that customer base between what’s best for the guest and guests or new customers to the prod- that leads them to stay with us is some- making sure the owners are happy with uct. Without having that, what’s your thing that we have to be very focused the returns? best pipeline of new guests? on, and we are. Smith: One of the things that I’ve Smith: Te modern luxury traveler, Te Millennial that a lot of people talked to our team about extensively is
43 that for us to generate what I charac- of great opportunity for us, and I think tensive process. Really, all we’re talking terize as long-term sustainable growth, we’re making a lot of progress in that about doing is taking much of what we and by that I mean growth that we area. do today and better automating it. exercise some level of control over, Skif: You talked about moving Again, that responsibility to treat notwithstanding market cycles and to high-tech enabled. I think most it with care doesn’t go away. It’s part of that sort of thing, is that we have to consumers are demanding this level of what we do today, and it will be part deliver exceptional value to our guests, personalization and that all the gadgets of what we do in the future. I think the and we have to deliver exceptional val- work, and things like that. How do you training around this becomes absolute- ue to our hotel owners. It’s not either/ balance the high-tech enabled stuf and ly imperative. Our organization excels or. We don’t get to choose. We have to the personal relationships? Talk me at that sort of thing, so that’s why I say serve both simultaneously. through a bit how the high-tech can I’m quite confdent that continuing to For our hotel owners, one of the actually enable the better interaction give our team the tools to serve our things that’s critical that we do is put with guests. guests better will be something that ourselves in their shoes. Understand Smith: It’s a good point. Under- we’ll be able to do. what their unique issues are. Under- pinning all of this is a high level of Skif: You’ve worked with Disney stand that they are investing immense training to make sure that people are closely. Disney knows a lot about the amounts of capital in these physical using it in the right way, hiring the guest experience and how to make assets and that they are taking a tre- right people. As [Four Seasons found- them happy. I know it’s early on, but mendous amount of risk in doing so. er] Issy Sharp always said, “We hire for what’s something you’ve learned Tey count on us to help manage a big attitude, and we train for the skills we through working with Disney so far, part of the risk associated with those need.” Te technology is not a substi- that’s improved Four Season’s relation- investments, namely the risk associated tute for that. ship with the guest? with operating these properties in the Te key is that it will allow us to Smith: Honestly, I think it’s a best way possible. more efciently gather information little early days yet, at least from my Among the attributes our share- about our guests and more rapidly put knowledge. Disney has made huge holders were looking for when they it in the hands of people that can use it investments in technology to better went to the market to fnd the new efectively. It still requires that people serve their guests. We will want to CEO was someone who understood use judgement and understand the understand that, basically what their that dynamic. Clearly, that was much sensitivity with which you have to treat experience has been in that. Again, of my background prior to coming to this information. You can’t sit there you can talk to someone from Disney Four Seasons - that of an owner. We with your iPhone in front of you and about it. Te risk being now that it ba- are very focused on recognizing that say, “Oh. Hello Mr. Smith. It’s such a sically has your whole itinerary. You’re each of our owners has diferent moti- pleasure to see you.” recognized. vations. Understanding those motiva- Skif: “And your wife, Carol.” How that works is going to be tions so we can efectively serve those Smith: “Your wife, Carol.” something that we’re going to be in- needs of theirs is extremely important. Skif: “How’s your dog?” terested in to see how it evolves. Tey We’ve got a very wide range of Smith: Exactly. “I see you have a clearly made a huge commitment to it. ownership groups. We have ownership dog.” Ten they say, “Wait a minute. I understand why. Teir experiences groups that are private equity funds How do you know I have a dog? I nev- with that are things that clearly we that are invested in these assets and er told you.” I think the sheer gathering can beneft from but early days for us. trying to generate a 20% IRR [Internal of information is not a panacea for Clearly, in terms of our association Rate of Return] on their investment. anything. What is absolutely impera- with Disney, though, is something we We have other groups that are tive is that there is an evolution in how think is just a huge opportunity. generational owners. Tey own great we continue to train people in serving As I said, there are very few brands assets in gateway cities. If you were to our guests, where part of that training in the hospitality business that I would ask them, they would tell you, “I never is the responsible use of this sort of say we would be comfortable afli- intend to sell this.” It doesn’t mean that personal information. ating with because many of them we they don’t care about the return on in- I guess the reason why I’m con- compete with. Disney is one that has vestment, but they have a far diferent fdent in our ability to do it is that such an extraordinary culture both in horizon in which to think about it. frankly, we have a lot of information on terms of who they are, how they serve Our challenge is to understand that our guests today, but it’s not necessarily their guests and that sort of thing, their very wide range of motivations and to all gathered in the most efcient way family orientation, it’s very compatible support them in accomplishing those possible. It’s not seamlessly produced with Four Seasons, so I think we’ll goals without compromising what our through integrated systems and that learn a lot from each other as we move brand stands for. Frankly, it’s an area sort of thing. It’s a relatively labor-in- forward.
44 Shangri-La Hotels & Resorts Greg Dogan
Photo courtesy Shangri-La Hotels & Resorts
Shangri-La Hotels & Resorts Tat signature brand pillar is guest experience today? expressed in its the tagline: “Tere Greg Dogan: Nowadays hotels has been rapidly expanding is no greater act of hospitality than are not merely a hospitality compa- beyond its original Asian to embrace a stranger as one’s own.” ny, they’re lifestyle providers. Guests borders over the last decade, It is beautifully portrayed by this expect us to inform them of the things with some especially notable award-winning promotional video that are happening at a particular lo- openings like Shangri- from 2010, as well as this recent video cation, which includes food and drink, series in October chronicling Tibetan and obviously shopping. If you look at La Hotel at The Shard in singer Yangjin Lamu’s journey to the the type of hotels that we have, we’re London this year. new Shangri-La Hotel Lhasa. Te not a cookie cutter hotel company. Te hospitality group launched six central brand message expressed by We’re very local-centric and we bring new hotels altogether in 2014, with Lamu in those videos communi- out the best in each local environment another 11 scheduled to open next cates the power of a grateful heart. that we go into so we try to care of our year. It also rebranded some of its With 88 Shangri-La properties present- guests in that way. Traders Hotels under the new Hotel ly operating, Dogan says his primary Skif: What are the unique selling Jen fag targeting the Millennial travel mission is developing new product in points of the Shangri-La brand? segment. global gateway markets that remains Dogan: Unique selling points vary According to Greg Dogan, CEO true to that message. from property to property, but the of Shangri-La Hotels, the successful Following is a slightly edited common thread through each of the translation of the Shangri-La experi- version of our conversation with Mr. hotels is probably our heritage and our ence outside Asia rests on the consis- Dogan: hospitality from the heart. Tat exists tent delivery of “hospitality from the throughout the whole organization. heart,” which he says is at the core of Skif: What are the biggest chal- Now, that is obviously diferent in each the hotel group’s DNA. lenges you’re facing to improve the part of the world, but the DNA is there 45 throughout the whole group. they leave the property. Tat will be an started asking our hiring teams to look Another unique selling point is cer- app, but we’re also looking at an online for diferent personalities. Te way tain touch points within each hotel portal. we recruit had to change completely. that come from our Asian heritage. Skif: How prevalent is the discus- We’ve done this by looking for the Tis includes the Chinese tea and the sion of millennial travel psychograph- right person for the right job. Tat may Chinese restaurants, with traditional ics internally at Shangri-La? sound very simple, but what happens Asian dishes from chicken rice to laksa Dogan: It’s been a major discus- now is that the department manager is to curry pufs, that we have in 99% of sion point and major policy decisions the frst person to interview a candi- our hotels worldwide. are being made throughout 2014 with date coming into his or her area. A I also like to think that in most of myself and my executive committee. So young person coming into a fne-din- our gateway cities, ing restaurant will we’re building not be the same as iconic buildings a candidate that with great views “Te days of being ostentatious are long we’re looking for that the majority in a fun pub. of hotel buildings gone.” Skif: Shan- don’t have. For gri-La is invest- example, Te ing signifcantly Shard overlooks in content market- the whole of London and the Turkish much so that we launched a new hotel ing and social media. Do you envision property in Istanbul overlooks the brand called Hotel Jen, which is de- that this will continue to grow? Bosphorus. signed to tap into that market. We will Dogan: Most defnitely. It’s becom- Skif: What role does technology have 10 hotels by March next year and ing the greatest force in marketing. play in improving the guest experi- have identifed that we need a separate Tere’s more money being spent in this ence? management team that reports to my- area and it’s much more targeted in Dogan: When guests are search- self to work on the millennial market. comparison to being blanketed. ing for us, we’re obviously up there Our research shows that they want Our brand campaign focuses on in terms of making sure that all our efciencies, everything at their fnger- service from the heart. When we data is available on what each location tips, and the basics including security, launch a new hotel, we spend a lot of ofers. a good shower, a great bed, and Wi-Fi. time to share that through this these However, I look at technology in a Tese are the four things that every channels. For example, when we diferent way. Technology is moving so hotel must have. launched our hotel Tibet we knew that fast that it is difcult for the industry In terms of our service attitude our guest would not travel to Tibet to and individuals to keep up with unless within Shangri-La, I’ve intentionally visit a Shangri-La Hotel. Tey were they’re a technology buf. Te angle gone out to all my general managers in going there for a personal and spiritual that I’ve taken with the group is to the feld, and told them to make sure journey. keep it simple without it becoming that we pull back from the white glove Skif: As Shangril-La continues to gimmicky. syndrome. Te days of being ostenta- expand globally, what keeps you up at Tat said, we obviously have to tious are long gone. We need to cater night? keep up to speed with the basics. We to our guests today. Whether that’s a Dogan: Next year I’m opening 11 were the frst group to ofer Wi-Fi free multi-millionaire staying with us or a hotels, including Doha, Bangalore, throughout the whole group, which person who just comes in for a cup of Ulaanbaatar, two in Sri Lanka and now includes the inside all of our cars. cofee, their priorities are good quality more properties in China. My con- We’ve taken a bold move not charging and fair price. cerns are the global political situations, for it. When I travel to other hotels, I’m Skif: How has the hiring process the hot spots in the world. Whenever still surprised at the exorbitant prices changed to match changes in the guest there’s a major incident, it seems to being charged in some of the cities. experience? have a major ripple efect throughout Tere are other pieces of technol- Dogan: We’ve changed our hiring the world, which afects travel and the ogy that we’re looking at. One which policy in a major way. It used to be a business of hotels. Tat is the biggest we’re rolling out in January is called one-shoe-fts-all scenario, whereby concern that I have. “Your Voice.” Te guest will be able to everybody used to come through our Te second concern internally is interact with us very quickly and tell human resources department and making sure we have a pipeline of good us about their experience, and, ideally, everybody came out as a stereotype young talent coming up through the we can react on any concerns or look When I frst came into this role, system to work in our hotels and have at anything they’re happy with before one of the things I changed was that I great careers.
46 Jumeirah Nicholas Clayton
Photo courtesy Shangri-La Hotels & Resorts
hotel companies including Viceroy, improving the guest experience? Dubai hotel group Jumeirah Mandarin Oriental, Ritz-Carlton, and Nicholas Clayton: We are really is, at times, better recognized Four Seasons. asking ourselves what we need to add for its iconic property inside Clayton recognizes his brand’s po- as it relates to guest experience. In the Burj al Arab than the brand tential to emanate worldwide from the some ways, we’re also asking ourselves itself. The group; however, heart of tourism growth in the Middle what we need to subtract. Our tagline East and is acutely aware of guests’ has become “Jumeirah: Stay Diferent” has grown to 22 hotels across changing defnition of luxury. He pulls and the intent there is to celebrate the 11 countries with plans for inspiration from both his new home diference in our customers, how they more than a dozen more in in Dubai and his travels including a use the hotels, the diferent architec- the works. It also recently recent trip to New York City where his tures, and interior designs. Our hotels announced a second lifestyle described the restaurant’s buzzy but don’t look the same in any two loca- casual vibe as an ambiance he’d like to tions and there is something unique brand Venu to ofer a more aim for. about the experience of staying in each modern guest experience. Below is an edited interview with of our hotels. Driving this expansion and the Clayton about the blending of luxury For example, the Madinat Jumeirah brand’s evolution is CEO Nicholas and lifestyle guest experiences. is an Arabian-themed hotel. It has Clayton who has been with brand a series of canals and people take a for two and a half years following an Skif: What are the biggest chal- water taxi from spot to spot. We’re just international career built at luxury lenges you face today when it comes to lucky because the people responsible 47 for designing the hotel put a unique answer will probably be no to. leisure, some for business travel, and feature there, and no one else in Dubai Skif: It sound like you’re recog- some for both. You can usually tell the has that. Our “Stay Diferent” brand nizing and recognizing the evolving diference. means, to us, having being memorable guest experience. What are some of the It’s about the planning process whether it’s in Frankfurt, Rome or major changes you’ve seen in terms of being diferent and saying, “I have a Dubai. guest expectations or demands? segmentation of diferent customers. We also have to ask ourselves about Clayton: I’ve had a chance to Tey’re going to use it diferent ways. when it is appropriate to take some of enjoy some of the restaurants in New If it’s a honeymoon, then I have to those steps in the process away because York City and we would like to kind do something diferent than for the they’re actually burdening the guests or of adopt this general philosophy of long-staying guest that’s here on a con- the guests’ preferences are changing? remembering that we’re in the enter- sulting project. We need smarter, bet- Tis came up when we recently re- tainment business and can still take ter-trained, better product knowledge, launched one of our marquee restau- the formality away. You can pay people to give better service over all. Back rants. I was there with another hotelier great respect. You can create what I to the recruiting, we have put a lot and we were more incentives watching the staf in place. Some of and how they our compensation went through their “Te average family carries two, if not schemes have a steps of service, stronger variable and I had to three, devices with them and they need component in follow up with the that bandwidth. Tey just need to be order to drive leadership of our performance. Our restaurant group able to give it juice. Connect. Tat’s all.” receptionists, our aferwards because reservationists, I felt like we were people in our food doing things to do and beverage out- them, but we weren’t being perceptive think is a luxury experience, but you lets, the manager or general manager about the customer. don’t have to have airs, formality, or of an outlet, the culinary in the back, For example, people will come to be snobby. I think it’s so important to they make up to 90% of their salary wipe down the table, but if there are have the social IQ to know when to on a variable component basis, for no crumbs then they don’t need to do engage or withdraw. example. I think that has changed the that step. If you come to ask me what Skif: Jumeirah is in the luxury sec- mindset a little bit. I would like to drink, you can get my tor so it’s interesting that you’re saying If you want great people you also water preference and you can get my you want to make that experience not have to think about how you’re com- wine or spirit preference. Do both at less luxurious, but less formal. pensating them and how you’re setting the same time. It saves you steps and I Clayton: Have the right amount of them up for success. We also have an get placated faster as a customer. steps for the right customer. In other online learning initiative. Te majority Another example is from a re- words, we have to better train our of our colleagues are guest-facing and cent event that we did. It was at a 100 teams of people, our colleagues, in the performing some type of service tasks person event and the ambiance was industry and specifcally at Jumeirah, so we’ve developed this partnership done in the typical luxury fashion with to read people and free them up from where people, at a self-paced basis, a piano guy playing. Te mood was what is a documented standard if they learn what a Cappuccino is, how to just not really contemporary. It could can tell that their standards are irri- make it, the history of it, why it’s im- have been more hip and groovy, but tating somebody. We need to tell staf, portant to do the cream a certain way, it was more this kind of old luxury. “Although this is a written standard and then they get certifed and tested We should have let people go right up and sometimes you’re tested against on this material. to the chef stations instead of passing that, we would rather you make intelli- Skif: Let’s talk about technology a things or go up to a cold bar instead of gent decisions.” little bit. What role is customer-facing passing warm beverages. We probably Skif: Let’s talk about hiring for a and back-end technology playing in could have performed a better event minute. How has hiring changed over improving the guest experience? with less people if we had done it in your time at Jumeirah and throughout Clayton: Everyone is going app a new way of thinking, which is “Let your time in the hospitality industry? crazy, but we think we should just it be prepared as you like it at that Clayton: Yeah. It’s the ability to make our mobile site work really well. moment. Let people participate in read how people are using the hotel. Our company doesn’t have the road the experience and not have servers When we have an arrival in Frankfurt, warriors that stay in Hilton for 200 coming to ask you a question that the some people are using the hotel for nights per year. If we did, we’d make
48 them an app to check-in. Jumeirah is also one of the frst in right, the context was right. For us, an application would be the luxury sector to ofer free Wi-Fi in I think the conservative, pre- more around telling customers what’s all their hotels. Tat was diferentiating dictable nature of some of the more happening over the next two weeks for quite a while. Whether customers established luxury hotel groups will while they stay with us in Dubai. It’s are there on business or on leisure, become passe. I have a lot of respect really telling them about what there is they still want it. Te average family for the brands that I used to work for, to do and how not to missing out on carries two, if not three, devices with but some of them keep building hotels something. them and they need that bandwidth. that are really good and solid but not Skif: How do you communicate Another is to make sure it easy to stay interesting. You can’t fnd a pop-up that to them right now? connected with the devices and we’re counter where they’re going to do Clayton: We do that in a very rudi- hyper-sensitive to adding international slices of pizza and glasses of red wine. mentary fashion today. We have looked outlets. If you make it easy for them, Tey would never think of that. I think at certain apps, and perhaps we piloted people notice is. luxury will become luxury lifestyle. them at the wrong hotels, but the usage Tey bring their own technology. Skif: Has Jumeirah’s marketing was quite low. I think we can do new Tey just need to be able to give it changed to refect this focus on a stuf through our TVs, which are be- juice. Connect. Tat’s all. lifestyle experience or to communicate coming more friendly and interactive. I Skif: Afer building a career at that side of the brand better? think they’ll be a powerful tool moving luxury hotel brands, what insights do Clayton: Te biggest marketing forward. you have about the future of the luxury single tool that we have would proba- From a guest service standpoint, sector given customers’ changing bly be our website like everyone else. technology is all about the in-room oc- expectation? Tey want to be able to When we re-launched it nearly a year cupancy detection, knowing when the connect only, experience local culture, and a half ago, we really focused on room is occupied, and communicating and integrate business and leisure trips. imagery because that’s what sells. Tat’s to the staf which rooms are to be ser- Clayton: Te luxury sector is what people are looking for. viced. It’s really about being profcient changing. Jumeirah will have to, over Pictures do one thing but movies at expediting service to guests. It’s not time, become more aware and become do a whole other thing. What Jumeirah very sexy, but it’s important. more of a lifestyle brand. It’s what peo- has done, which no other hotel has On the technology front, we have ple want overall. All of these lifestyle done, is invest considerably into video not chosen to be a leader within the brands, including our announcement to the point where Jumeirah is now the industry. I think we want to provide of Venu, means less steps of service, most viewed hotel brand on YouTube. just the right amount and the right less process and orientation, and less to We’re currently running at more than quality. Te entertainment systems in build and construct if you’re a devel- 16 million views and the next brand the rooms is really important when oper. Tis is no accident that you’re is at maybe 3 million views, based on people are their for leisure. seeing these lifestyle brand announce- Google research that looks at the infu- If you don’t have reasonable con- ments. ence video has on the decision-making tent, big screens and nice equipment Going forward we need to build process of high net worth travelers. It’s then you’re out of the game. We choose our hotels with more of that in mind. disproportionate compared to other not to lead, but not be behind. In I saw a perfect example of this this segments. Te numbers in terms of some of our bigger suites, we recently morning at the Palace Hotel. Te only views have been quite high and we installed a remote that controls every- place they do breakfast is at this small realize that we’ve got a bit of a time thing in the room from lighting to mu- patisserie cofee shop that’s very cute advantage, because we began earlier sic to temperature. I think things like and a grab-and-go kind of thing. On than the others. In so ways videos tell that will become powerful tools just to the way over there, I noticed the music a more real story than pictures do be- make a room more comfortable. was very well done. Te sound was cause they’re harder to manipulate.
49 Ritz-Carlton Herve Humler
Photo courtesy Ritz-Carlton Hotels
activating employees, its social media culture. Tat’s what Ritz-Carlton has to The Ritz-Carlton is one of eforts, and the sociopolitical issues deliver on. the more iconic luxury hotel that impact the hospitality industry. You have to look at design, tech- brands. Although the name An edited version of the interview nology and meaningful service. You had been used on hotels since can be read below: are the key provider of that experience, the early 1900s, brand we and it is constantly evolving; yet we Skif: What are the biggest chal- have to maintain the standard that now know wasn’t founded lenges that you face today in improving Ritz-Carlton is well known for as an until 1983. The brand quickly the guest experience? iconic brand. grew from one property Herve Humler: Traditional luxury Skif: Is there a certain element of in Boston to 24 properties was all about material goods, living the guest experience that takes priority when, in 1998, the brand a life of comfort, which was charac- in improving over the others? terized by collecting material goods Humler: Technology is one of was purchased by Marriott on the wall. I go to China and I buy a them. Today the millennial global International. vase. I go to the Middle East and I buy citizen is shaping luxury travel. Across Today the brand boasts 87 hotels a carpet. all countries and cultures, this is a located in 29 countries. Herve Humler, Tose needs and values haven’t generation that has been shaped by a founding team member, today acts disappeared but luxury is changing technology. Terefore, we have to as president and COO. Despite its long rapidly. We hear a lot about experien- adopt an online and ofine strategy history with the brand, Humler is ac- tial travel and that’s what people are that allows our brand to participate in tively looking ahead by adapting to the doing. Guests today defne themselves the conversation and engage guests on desires of today’s luxury customer. by what they have experienced versus their terms. Trough various digital Skif recently spoke with Humler what they have bought. Te aspiration touch points, such as Ritz-Carlton about the technology’s role in a luxury is about authenticity and originality. hubs, we provide guests the option to service environment, strategies for Tey are very connected with the local use a mobile device for services such as 50 checking in and checking out. well at Ritz-Carlton. I am a found- 11,000 interactions and conversations I have two teenagers at home ing partner of this brand and I enjoy every single day. Trough social media and they talk to our neighbor online going around the world, to new hotel we are not only able to provide destina- instead of going to see them. We see openings, and sharing our strategy, our tion information to guests when they a lot of customers act that way. Tey visions. I defne service. It’s the greet- are exploring the idea of travel, but we are sitting by the pool or in their room ing, being compliant with our guests’ are able to talk to them during their and they look at the menu and order wishes, and a warm farewell. stay and afer they have lef. We have online. Our ladies and gentleman are our been able to extend many of our other Skif: A luxury hotel experience most important resources. When you services across the social platforms has so much to do with the service. say that, you give them the tools for such as a leadership advice on Linke- How do you balance technology versus success. dIn and travel tips from our concierge human service to still provide that We developed a process where all on Foursquare. We can literally be with luxury experience? of our employees are reminded of the our guests at all times and communi- Humler: Luxury travelers today service value of the day before starting cate at their convenience. have diferent expectations, which are their job. We share one story of one It’s not just existing guests that we more complex and challenging. We customer so that they understand how are speaking to. We spend as much want to make sure that guests have a to create an emotional connection with time talking to people who have aspira- deeply personal- tions to experience ized experience. Te Ritz-Carlton Tey value a two- -- the girl who is way conversation “Luxury travelers today have diferent saving to buy her with the ability expectations, which are more complex mother a candle to be a part of from the website creating what they and challenging. We want to make sure for Mothers Day want. or the couple who Tey see that guests have a deeply personalized is dreaming of a technology as a experience. Tey value a two-way Ritz-Carlton wed- key component ding. Existing, fu- of great service conversation with the ability to be a part ture, or aspiration- too, but they al, we appreciate expect that service of creating what they want.” the opportunity interaction to to share dialogue provide access to with anyone who unique skills or wants to be con- local knowledge. It nected with us. is our job to constantly assess evolving customers. Skif: Is there anything about technology and fnd out which one Skif: Employee empowerment is the guest experience that we haven’t will enhance the guest experience at something that we hear about ofen but touched on but that keeps you up at Ritz-Carlton. You have to keep your that I think it more difcult to do than night? pulse on what the customer wants all to say. Humler: Te political geographic the time around the world. Humler: Tat’s right. How do you situation around the world is most Skif: Another aspect of human empower people when we have 42,000 concerning; specifcally, the economy service is the hiring experience. How ladies and gentlemen? You have to slowing down in China and embar- has the hiring experience changed or defne steps and remind them every goed in Russia. We have not seen a evolved to match the changes in guest day. Te customer who is in New York lot of changes in China as we now expectations? today will be in Beijing tomorrow. We have ten hotels there, however, we are Humler: We don’t call new hires want to deliver a seamless experience concerned about our Ritz-Carlton employees or associate, we call them so you have to do it every day. Hotel in Moscow, as this is efecting ladies and gentleman. Tey are ladies Skif: How has social media and the livelihood of our employees, the and gentleman serving ladies and gen- digital content changed Ritz-Carlton’s ladies and gentlemen, on property. tleman. Tey are our most important conversation with customers? We are keeping everyone employed by resources in our service commitment Humler: A very large one. As of multitasking in diferent areas of the to guests. today, we have twelve branded social hotel from adding more training and First, you have to tell them why media channels, more than three mil- language skills. we are in business, which we do quite lion fans and followers, and more than
51 Rosewood Hotel Group Sonia Cheng
Photo courtesy Rosewood Hotels
Hong Kong’s luxury hotel executives in the hospitality industry. nowadays are much more sophisticat- collection Rosewood Hotel Prior to joining the group, Cheng spe- ed. Tey travel around the world and cialized in real estate investments while experience a lot of diferent hotels and Group is embarking on an working with a major international experiences. ambitious expansion strategy investment bank and American private I think what they want is really through 2015 with plans to equity frm. intuitive and engaging service rather nearly double its inventory of Skif recently spoke to Cheng about than the expected kind of hotel expe- 54 hotels across 17 countries. the evolution of the luxury guest expe- rience. Tat is what Rosewood is going rience, how her hotel group is attempt- for at the moment and it’s not easy. It’s There are nearly 40 new hotels ing to surpass their lofiest expecta- about being intuitive and being able currently under development. tions, and the importance in hiring in to anticipate what guests are looking In addition to the Rosewood brand, order to executive on philosophy. An for once they walk through the hotel the collection also includes hotels un- edited version of our interview can be or we pick them up from the airport. der the business-oriented New World read below: Our philosophy is that there are small and design-drive Pentahotels brands. details that will entice the guest and Te collection also includes some icon- Skif: What is the biggest challenge surprise and delight them in diferent ic hotels around the world including that you’re facing to improve the guest ways. Tis is a diferentiating element, Te Carlyle in New York, Hotel de experience today? but it is not an easy thing to do because Crillon in Paris, and Rosewood Man- Sonia Cheng: As a luxury brand, you need to make sure that your team sion on Turtle Creek in Dallas. we pride ourselves on creating really is able to execute on that philosophy. Rosewood Hotel Group CEO Sonia personal and authentic experiences for Skif: What’s one unexpected shif Cheng was one of the few female chief guests. At the luxury level, travelers that you’ve seen in guest expectations 52 or demands in the last fve or ten years? restaurant that they would love a café it. For things like early check-in or late Cheng: It’s not unexpected but latte. Tat is what we are striving to check-out, it’s going to be an all-in fee. travelers are more sophisticated and achieve. It defnitely isn’t expected and If, on the luxury level, we are focusing they are no longer looking for phys- it’s very intuitive and it goes a long way, on such small costs then it just annoys ical extravagance at the luxury level. in my opinion, in really enhancing out guests. If you want to create a holistic Tey’re looking more for a personal customer relationship management. experience, increase the rates to refect experience and someone attending to Skif: You talked a lot about the luxury service that you are pro- every detail of their stay. Tat is what the role that your associates play in viding rather than break it down and they’re expecting walking into a luxury improving the guest experience. How charge the guest on separate items. hotel right now. has the hiring experience changed or Tat will defnitely drive guests away at Skif: What role does technology evolved to match these changes in the the luxury level. play in improving the guest experi- guest expectations? Skif: What role has content or ence? Is consumer-facing or back-tech- Cheng: It starts with the people social media played in changing Rose- nology more important or efective you hire. Troughout our interview wood’s conversations with its custom- in improving the ers? experience? Cheng: Social Cheng: I media is defnitely know throughout “We don’t want to have a hotel restaurant very important. the industry that anymore; we want it to be a gathering We have been con- there’s a lot of tinuing to enhance consumer-facing place for locals.” our social media technology that’s platforms, particu- put into the room larly using them or throughout the to communicate hotel, but I think with our guests, we have to be careful about how much process, we are looking for people who whether we have a promotion or just technology we put in front of the guest. are, most importantly, passionate about something happening in the hotels. It Not that they’re not technologically the hotel industry. You can see in their is a very efective and efcient platform savvy, but the key is to make sure that eyes that they really enjoy this industry in comparison to traditional literature the technology is practical, functional, and servicing our guests. or TV. and easy to use. Practical experience, of course, is We have developed a program Te worst scenario would be to important but at the end of the day it’s called Rosewood Curator, in which have technology in the room that the about what they genuinely like to do we invite certain infuential characters customer just doesn’t know how to use and what they’re passionate about. We and personalities to be our Rosewood or it’s too difcult to comprehend. Tey have interviews in diferent settings. Curator for a certain city. Tey provide end up getting frustrated and having to For example, we take interviewees to a advice and hidden secrets about that call guest services to fx it. cofee shop or more relaxed environ- particular city that are then posted on In terms of customer-facing ment than a conference room to try to the website and channeled through technology, we just have to be careful gauge their real personality. social media. It’s a diferent way of to make sure that it’s very simple and Like any of the hotel groups, we advertising and marketing your hotel. easy to use and in places where it is have a very solid training program Skif: Is there anything else about really necessary rather than there just but I think that intuition and being the guest experience that keeps you up because it’s a trend. intuitive is a core piece that our group at night? For us, back-end technology is really focuses on. We have training Cheng: Our new focus is around more important in terms of enhancing programs where we explain our philos- creating authentic experiences in our the guest experience. Making sure that ophy to them, have role-plays, and get food and beverage. We don’t want we know guest feedback or questions out of the hotel to experience diferent to have a hotel restaurant anymore; instantly and immediately would really venues. It’s a more creative training we want it to be a gathering place help enhance the experience that par- process. for locals. Tat started with our new ticular guest. Skif: What are your views on the Rosewood hotel in London where we For example, if a guest walks into increase in hotel fees that are being lev- created an amazing bar that is a very one of our restaurants and for the ied against guests? How do you handle popular destination among local Lon- second time orders a café latte then fees at a luxury brand? doners. It really creates a great atmo- we should be able to input that into Cheng: It is a global trend that Wi- sphere fore the hotel. We’re focusing on our technology so all of our associates Fi is going to be complementary and creating things not just for the guest, are aware when this guest walks into a eventually all hotels will have to comp but really for the local community.
53 Insights Luxury Hospitality Returns to the Human Element
Photo courtesy Standard Hotel Miami
The LE Miami hotel buyer and Sponsored by Departures and riences that embrace specifc consumer supplier conference released Travel + Leisure magazines, the report psychographics rather than demo- its latest industry thought foretells the future of hotel experienc- graphics. Te luxury traveler profle leadership report on Monday, es through the lens of three themes: today spans all ages and backgrounds, Tink Context, relating to the luxu- male and female, and many diferent entitled: Exploring The Shift ry consumer psychographic; Curate source markets, so the common thread In Luxury. Collectively, examining the rise of for hotel brands today is how people LE Miami’s niche is what they next generation “travel intermediaries” travel, not who is traveling. broadly defne as “contemporary luxu- (agents); and Sell Diferent, discuss- Meanwhile, the “Millennial travel ry,” which includes fags like Morgans, ing how hotel brands require a strong trend” dialogue is starting to fade now Commune, W, 25hours, Te Standard, point of view to be successful today. that so many X’ers and Boomers are Ace, and others in the upscale lifestyle adopting travel mindsets similar to the segment. Te white paper is the result Tink Context digital-native crowd. It’s a messy world of the Leadership Lab event at this for hotel marketers these days. year’s show, held in Miami this past With contemporary travel “more “Our game is far more complex June, where a wide swath of top exec- and more about a mindset infuenced than it was,” says Brad Wilson, presi- utives helming those brands discussed by the context of each journey,” travel dent of Ace Hotels. “It’s a very layered, today’s hospitality consumer trends. brands are building product and expe- very nuanced structure of under- 54 standing your customer that includes truly tailored to their needs.” COO of André Balazs Properties. diferent levels of customer each with Te white paper suggests that the “You can enhance it, change it, but it multiple personas.” evolution of contemporary luxury still has to keep the same message.” To better understand the customer presents a huge opportunity for travel Sarah Doyle, global brand director of the future, hoteliers are keeping a agents who defne their niche and for W Hotels, adds that once that close eye on the surging popularity position themselves as expert curators singular brand voice is established, of alternative lodging, such as hybrid of the hotel experience. Today’s luxury brands should get out of the way and hostels like Freehand and Genera- consumer doesn’t just want to know let their customers do the rest. She tor, pop-up hotels, Airbnb, and the what safari supplier to book, for exam- says, “It’s about recognizing that the sharing economy in general. Wilson ple, they want to know which tent. guests are selling us, recognizing the says those customers might not be Additionally, when the same luxury landscape of dialogue and not getting luxury consumers, not yet, but they traveler has multiple personas requir- too overt in trying to market our- are informing luxury hoteliers about ing travel customized in diferent ways selves.” how the overall context of hospitality based on those personas, the agent is Te challenge according to many is evolving. Amar Lalvani, CEO of Te the best sales channel to communicate of the diferent hoteliers is producing Standard, adds, “We can learn from those customizations to the individual enough new and engaging content the next generation of travelers who property. marketing to build a symbiotic rela- think that it’s normal to use Airbnb or “Te future is the hotel who wants tionship between brand and consum- Uber. How can these models translate to partner with the travel intermediary, er over the long run. Hotel groups to the hotel industry?” going beyond the hotel door, rather such as 25hours in Europe have than just seeing it as a sales intermedi- become master storytellers, aligning Curate Collectively ary,” says Norman Aynbinder, CEO of product and content diferently for American Excursionist, a full-service each specifc property. Others are still Tis is somewhat surprising at travel package company. exploring how exactly to create those frst glance. LE Miami’s collection relationships when consumer psycho- of hoteliers are placing a high value Sell Diferent graphics are so in fux. on travel agents and the amount of And then there are those brands, business they’re driving, based on With Google, review sites, and including some of the above, who the importance of humans to explain social media making the global travel have created an almost iconic status the contextual experience revolving journey almost completely transparent, for themselves in the lifestyle hospital- around a specifc luxury lifestyle hotel. traditional hotel sales and marketing ity segment. Much of that is based on According to the, ahem, LE Miami tactics are crumbling at an exponential highly defned product and executed Take, “Luxury fashion brands do not pace. Today, audiences balk at stale experiences, and robust social shar- only sell their key products online; sales pitches, so travel brands have to ing. they position them in their shop have a strong point of view that’s well “It used to be that the product was where their magical aspect can be re- delineated in the marketplace and 50% of the cost and the marketing vealed through human interaction…. backed up both online and on-prop- the other 50%,” says Chris Blackwell, People are beginning to understand erty. founder of Island Outpost. “Now the that travel intermediaries are the only “Longevity is about staying true to product is 95% and the marketing people who can provide advice that is what you stand for,” says David Bowd, takes care of itself.”
55 Montage Hotels & Resorts Alan Fuerstman
Photo courtesy Rosewood Hotels
by Alan Fuerstman in 2002, launched a our guests. Our teams are focused on Montage Hotels & Resorts second brand in October 2014. Pendry creating experiences that are tailored is a luxury hotel and resorts is a mix of Montage’s luxury service to each individual who each has a management company that’s with a lifestyle and design-driven edge diferent kind of need. Te way we go built its reputation on ultra- and will be run by Fuerstman’s son. about this is with a certain depth of the personalized service in warm “Te way in which we’re able to training. We teach employees to look personalize experiences for our guests for ways to exceed expectations and weather destinations in really adds a dimension that we think surprise our guests with things that Hawaii, Mexico, and California. will bode well for us,” he says in a dis- appeal specifcally to their experience. With just six properties, the brand cussion about the growing market for I’ll give you an anecdote that might has become one of the top fve highest lifestyle brands. sum it up. rated small luxury chains, according We spoke with Fuerstman about I recently bumped into a guest that to ReviewPro’s analysis of more than the challenges of creating a personal- was dining at one of our restaurants 830,000 reviews of 84 hotel brands. ized guest experience and his views on and he called me over and said, “Alan, It is also working to attract and technology, hiring, and digital commu- I’ve got to tell you. I’ve been coming cater to California’s growing Chinese nication. here for years and the service just tourist base. Montage Beverly Hills is keeps getting better.” I asked, “What certifed “China-ready” by the Pre- Skif: What are some of the biggest happened?” and he said, “I told my ferred Hotel Group, which advises challenges that you’re facing to im- server at dinner that we were in a bit of hotels to follow a 25-item checklist to prove the guest experience? a hurry because we wanted to get back please Chinese guests. Alan Fuerstman: We strive to in time for the American Idol fnal. He Montage Hotels & Resorts, founded continually personalize the service for did a great job with dinner,” the guest 56 said. Tey got back to the room by 8 sure that technology is user-friend- have the tools so it comes down to how p.m. to watch the fnale and at 8:15 pm ly, that our guests aren’t stymied by well our staf is use them.We’ve seen a there was a knock not he door. A room the great advances in technology. I tremendous amount of change in the service attendant was there with a bowl have seen too many examples where form and fashion in which our guests of popcorn and said, “I hope you enjoy there have been things introduced in want to be communicated with. the show tonight.” guest rooms and the like that are too Skif: Are you using social media at Te thinking culture of our staf, complicated for our guests to properly all to communicate with guests? which looks to personalize and address work. We take a somewhat conscious Fuerstman: We use social media the needs of our guests, is what really approach to make sure that we provide extensively. One of the things that I diferentiates us. From a CEO’s per- the technology, but it is very easy to really like is the transparency that now spective, our challenge is fguring out use and it is not intimidating for the exists. We’ve really supported the on- how we inspire our teams to deliver non-techie. line feedback that’s given, whether it’s that kind of service over and over Clearly technology is an important on TripAdvisor or on other channels. again. Ten the challenge is fguring part of our development. Our rooms Real-time guest sharing is the best out who I instill validator for the that in the culture kind of experience as we expand the you can expect in company. “We’ve really supported the online a hotel. Te challenge We know becomes the men- feedback that’s given, whether it’s on many guests are toring, training making their and developing TripAdvisor or on other channels. Real- selection based of our people to time guest sharing is the best validator.” on what they are continue to deliver reading about our at the extraordi- properties from nary levels we’ve other users so that been delivering. digital presence is Also, recognizing very important. the need to attract great new talent into in Beverly Hills are fully integrated Skif: Has hiring changed at all the organization and integrating that and you can control the whole room. in recent years to improve the guest new talent so that we can replicate the We’re working on the next generation experience? things we do really well and deliver on of what that’s going to look like, where Fuerstman: Te interesting thing a grand promise. you can control the room temperature, about hiring is that when we frst Skif: What is one unexpected shif control the drapes, and more. opened our Laguna Beach property, that you’ve seen in guest expectations We’ve seen the introduction of tab- probably less than 50 percent had ever or demands? lets into the guests rooms, but I’ve seen worked in a hotel before. We have Fuerstman: One of the things that some cases where companies introduce always focused more on attitude and I’ve been pleased to see is the amount tablets into hotel rooms, they’re too non-technical skills with the belief of multigenerational travel and the complicated to use, and people opt that we will train extensively on the increased demand for our premium for good old-fashioned room service technical parts of the job. What really suites because of families traveling menus. Tere’s great need for both and diferentiates our staf is the hospitality together. We adjusted accordingly to I think we have to choose responsibly aptitude that we feel. be able to accommodate larger families to make sure there’s a user-friendly We have been highly focused on traveling together to resorts. We are option for our guests. that, but, of course, it has become always hopeful that we are creating re- Skif: Are you using any technolo- much more streamlined. Te hiring sorts where traditions are created and gy in the backend to help improve the process is much more digitized than people return year afer year. It exceed- guest experience? ever, but we rely on a combination of ed our expectations and really shown Fuerstman: Tere’s technology we old and new. We put our applicants us the desire for families to travel and can use that will help manage infor- through panel interviews where they utilize large suites to be together. mation better and we have invested in will meet with a group of managers Skif: What role is technology play- that. We’re able to track preferences before being hired. Te depth with ing in improving the guest experience? and guest histories and then act on which we work through the selection Fuerstman: Technology is incred- that. Te success of the backend sys- process is a key component to build- ibly important. We see much more tems tends to revolve around how well ing the kinds of teams that one needs tech-savvy guests than we imagined our associates are gathering informa- to have the kind of output that we’re initially. Te trick, though, is making tion and using that information. We looking for.
57 Six Senses Neil Jacobs
Photo courtesy Six Senses Hotels Resorts Spas
It’s hard to imagine a trav- remains largely in Asia including training process. Much of our compa- eler having a bad experience China, the Maldives, Tailand, and ny is about wellness and sustainability at Six Senses Hotels Resorts Vietnam. Te brand is set to double so we need to fnd people that embrace its portfolio in coming years with nine that, understand it, and want to be part Spas, a small collection of resort and spa properties in develop- of something based on those pillars. It’s luxury hotels that integrates ment. a challenge, always a challenge to fnd local culture and prioritizes Jacobs has unique perspectives on great people. experience in gorgeous out- the hiring process, issues with tech- Also, technology. Te speed of door landscapes. nology, and the critical experiential technology is going up so we have to element that most hoteliers overlook. keep up with it, determine what’s too However, it takes work to improve An edited version of our interview is much or too little and fnd the right technology, train staf, and deliver en- seen below: balance, especially given that we’re tertainment options even in paradise. a high-end brand. It becomes a very Tasked with leading the brand through Skif: What are the biggest chal- expensive part of what we do every day a period of growth is CEO Neil Jacobs. lenges that you’re facing to improve the — staying on top of where things are Prior to joining Six Senses as guest experience today? and implementing what’s necessary. CEO two years ago, Jacobs managed Neil Jacobs: It’s always about Skif: What role does technology Starwood Capital’s hotel portfolio and people. We have hotels and spas in play in improving the guest experience spent 15 years at Four Seasons Hotels, pretty far-fung destinations so it’s at Six Senses properties? seven of which he led operations in really about fnding the right type of Jacobs: It has a big role, but it’s Asia Pacifc. people that share the dream. Huge also about implementing a technology Jacobs’ experience in Asia aligned efort goes into the recruitment and strategy and platform that is simple to well with Six Senses’ inventory, which 58 use, that is there but not intrusive. We everything, but many. Our approach is Te high-end customer, at this need to have a tremendous interac- multiple interviews by many people so point in our evolution, is less and less tive website. Mobile applications are each employee -- we actually call them inclined to go to a Four Seasons, Man- becoming more important, even at the hosts -- has four or fve interviews. Te darin, Peninsula, or St. Regis. Tey’re high-end. Tere are smart rooms, tech- general manager will also interview a bit fed up with it and looking for nology that controls certain function- regardless of position. something more unique, small. Let’s ality within rooms including lighting Each interview is a little bit dif- call it the “anti-brand.” or air conditioning. I think we need all ferent. We adopt something called Te advantage that gives to inde- that, but what you don’t need is to have behavioral-based interviewing, which pendent and small chains is greater to have a PhD to turn the lights on. I makes sure that everybody participat- than it’s ever been. Te smaller guys think some hotel companies, particu- ing in the interview process talks about have to understand distribution chan- larly at the high-end, have gone a bit diferent things rather than repeating nels, web marketing, and social media, too far and it’s impossible to function themselves. but certainly the world is a lot fatter in the room. It starts with recruitment and then than it used to be. What you’re fnding It’s about the right amount of once someone is hired moves into how I think is that some of the smaller connectivity and the ability to access you orientate them. Orientation hap- brands, ourselves included, are equally remotely, whether it be a virtual con- pens before they ever touch guests or as focused on what I call content as cierge or just remain connected to the work the foor. It includes buddy shifs, much as they are on service delivery, hotel. I think in a couple of years time functional training, generic training, good food, and a clean comfortable everybody’s cellphone will open the and checking with the employe afer room. guest room door. Tere are a couple of 30 days and 90 days to see that they’re I think to some of the larger hotels companies that are already doing that settled down. it is unexpected, but we see it as a huge now and I think that’s great because it’s A lot of people don’t have the time, opportunity for companies our size, the future. Te ability to save time by inclination, or the money to function with distinct personalities. bypassing the reception or not doing that way, but we think it’s essential if Skif: What are your views on the a formal check-out is all critical for a you’re going to get people that really increase in hotel fees being levied business hotel. embrace the culture and display it. We against guests? Te back-end technology is also call it “emotional hospitality” and it’s Jacobs: At our end of the market, essential because it allows us to remain really about how, at the end of the day, it’s something we try to avoid in most connected with our customers, market the employee or host is able to touch cases. Te last thing you ought to do to to them, and mine and analyze data. guests at an emotional level. If we hire someone who is already paying $500, We weren’t able to do all of this to the the right people and go through the $800, or more to stay in your prop- same extent a few years ago. Without it, process that I’ve just outlined then erty is nickel and dime them. To give hotels and companies are at a distinct we have a better chance of being able somebody another hour or two for a disadvantage today. to achieve what we set out to do as a late check-out, particularly if the room Technology is hard work because of brand. is not being occupied, ought to be a no the sped at which it moves, but it’s also To some of us it seems like com- brainer. It leaves a very bad taste and really challenging fnancially to keep mon sense, but actually very few certainly doesn’t work with our emo- up with it. people go about it in that way. Four tional hospitality piece. People would Skif: How has that hiring experi- Seasons has done so consistently for rather pay a little bit more. Build it in ence changed or evolved to improve the last 25 or 30 years and that’s the the rate rather than nail them for $50 the guest experience? way we do it too. or $100 at the end. Jacobs: I spent 15 years at Four Skif: What’s one unexpected shif I’m also seeing a lot of resorts, Seasons and I think one of the great- you’ve seen in guest expectations or even high-end, now charge resort fees est strengths at Four Seasons was the demand in the last decade or so? on top of rates, which I never really culture it created within the employee Jacobs: Some of the larger com- understood how they had the courage family, so to speak. Everyone would panies might say it’s unexpected, but I to do that. Tere seems to be a move to ask us, “How do you do it? How do think that we are going through a pe- nail people wherever you possibly can, you create people like that?” Honestly, riod in which high-end customers are even at a four-star level. It seems a little it was a process and it’s a process that sufering from brand fatigue, truthful- odd quite honestly. we’ve certainly adopted at Six Senses. ly. What’s happening in many cases is If you’re running a limited-service It starts with how you recruit. We, and that a lot of the very successful luxury environment then it becomes more I now, recruit fundamentally based on brands have become a little bit homo- like a low-cost airlines carriers. People attitude rather than ability. geneous. Tey all have good services, understand it a bit more if you’re not Many jobs within a hotel can be wonderful beds, but the content part, paying very much to start with. It’s taught through good training. Not the experience, is ofen missing. certainly not our approach.
59 Rocco Forte Hotels Rocco Forte
Photo courtesy Rocco Forte Hotels
Talking with Sir Rocco, you quickly generations of men wearing kilts while Rocco Forte Hotels operates become aware that this is a man who the ladies of the family tilt over in ten hotels in Europe that steadfastly believes in traditional laughter. At Villa Kennedy, the JFK help defne the luxury hotel notions of luxury hospitality. While Bar is one of the hippest local bars in experience in their markets everyone else is talking about the Frankfurt. Tat energetic, fresh and evolution of luxury travel, Millennial unstufy vibe is a primary reason why with properties emblematic of travel behaviors, and the integration the hotel group has capitalized on the their cities’ modern history. of technology at every touch point, Sir multi-generational family travel trend Te Balmoral Hotel in Edinburgh Rocco is not entirely impressed. so well. and Villa Kennedy in Frankfurt, for Tat classic philosophy of hospital- Tis year, Rocco Forte Hotels example, are two restored heritage ity works in today’s tourism market- announced a new partnership with buildings dating back to the early 20th place if your hotels are one-of-a-kind the Italian State-backed sovereign century that cap the high-end scale of within their local cultural context, they fund Fondo Strategico Italiano Spa hotel accommodations in each desti- provide a level of def service requir- (FSI), 20% controlled by the Bank of nation. ing a staf count above market norms, Italy. Te collaboration will develop At the same time, Sir Rocco Forte and their design is attuned to modern new luxury hotels throughout Italy, and his sister Olga Polizzi, who found- tastes. Since Rocco Hotels’ proper- with a development pipeline sched- ed the company together in 1996, have ties ft within that criteria, the brand uled to double the size of Rocco Forte an unerring eye for up-to-date interior ofers a luxury hotel experience with- in the next fve years. Te company design that is both modern and ap- out feeling like an anachronism from is also planning to expand in North proachable, which diferentiates their another era. and South America, and potentially product from many other legacy hotels In the lobby of Te Balmoral, for elsewhere. on the continent. example, it’s not unusual to see three Following is our interview with Sir 60 Rocco, who shared with us his priori- number of people outside hospitality wherever you go it’s genuinely authen- ties, and concerns, for the luxury hotel to help us develop our own training tic to the city it’s in. Now everyone guest experience of today. program, people who don’t necessarily is talking about a sense of place, but work with hotel companies. Tey’re we were the frst people to really start Skif: What are the biggest chal- also dealing with people’s everyday doing it when we started out, and even lenges you’re facing to improve the lives, whether that relates to money, or today, a lot of people who talk about it overall guest experience looking into marriage and relationships, or related don’t actually deliver it. the future? to work, and helping people to manage In dealing with that, and creating Sir Rocco Forte: Te biggest those. A lot of that can be applied to it, the staf has to feel that themselves. change is probably that the world has the interaction between the customer So in our induction programs that we become more competitive, and there and the staf. have, we teach them about the whole are a lot of people out there doing a People who work in the industry history of the hotel, what makes it dif- reasonably good ferent, what makes job. Terefore, to it special, and we stand out, you’ve teach them about got to be excep- “Once upon a time, people used to pay the city that the tional in what you hotel fnds itself do. I think that by check, and you used to trust them in. We actually in many hotels that the check was good. Today, you have take them out into you go to, you the city to show fnd an unnatural to swipe a card as soon as the customer them what the or programmed places of interest interaction with comes into the hotel. So technology in are, and so on. So the guest, where when they’re com- the guests are some ways goes against the delivery of municating with always asked the luxury service.” customers, they same questions by can talk knowl- diferent members edgeably about the of the staf within destination. Te a few minutes of each other. have to enjoy what they’re doing, and idea is to create that sense of belonging I think one of my challenges is how if they don’t, then they’re never going to something that has been around for can I improve the interaction between to be very successful, and they’re never a long time, and perhaps something my staf and the customer to make the going to deal with the guest in the more than their usual place of activity. customer experience a more pleasant correct way. So obviously in recruiting Skif: Does the fact that Rocco one. Te interaction between people is staf, particularly, you are looking for Forte Hotels is a family business im- a skill, where when you’re sitting next people who are personable, who are pact the guest experience signifcantly? to someone you can actually strike up outgoing and enjoy interacting with Forte: Yes, certainly. My sister and a conversation. For lots of members of guests, versus introverts and people I started this business, and now my hotel staf, that is a difcult thing to do, who fnd it awkward and difcult to daughter is working in it, so there’s and therefore, we’re trying to develop communicate. a strong sense of the Forte family programs which enable our staf to do To some degree, everyone says that. running through the business. We’re it better. Te issue with hotels very ofen, is if it’s in the hotels on a regular basis. All of Tere’s a psychology to it, and you a busy hotel, there’s a lot of pressure all the staf knows us, and we know many can’t treat every individual guest like of the time on the management team. of the individual members of the staf. the previous one. A lot depends on And when someone leaves, there’s a Terefore, they hear directly from us their state of mind, a lot depends on tendency to take the frst person who and what our philosophy is, and where if someone has had a difcult journey, comes along. Tat’s something we try we’re trying to take the company. whether they’re happy and relaxed, and to avoid as much as possible. Skif: Who is the Rocco Forte so on. Your interaction with a guest has Skif: Your hotels help defne guest? got to change accordingly, and so that’s their cities in an era when everyone is Forte: Well, there’s really no ste- something that we’re trying to develop talking about local and authentic trav- reotype. It is the top end of the market more. el. How do your physical properties traveler, but it depends on the location. Skif: How is your staf hiring and defne the guest experience? Villa Kennedy in Frankfurt is very training procedures evolving to accom- Forte: One way is that each hotel much a business destination, so most plish that? has its own personality. It’s not an of the people traveling to the hotel are Forte: We’re working with a amorphous chain hotel, which is saying corporate. If you talk to travel agents,
61 however, they will say I wouldn’t experience. Once upon a time, people visit a particular hotel. send someone who I would send to used to pay by check, and you used So travel agents play a very import- a Four Seasons to one of your hotels, to trust them that the check was good ant role in long haul travel, and I really and vice versa. I don’t think you can when they paid at the end of their stay. like them, and I love to pay commis- really generalize. Tere’s such a variety, Today, you have to swipe a card as sion to them because they deserve it. ranging from pop stars to university soon as the customer comes into the Tey are providing a special service. professors to concert pianists. Tere’s a hotel. So technology in some ways goes Tat is diferent from the online travel huge variety, and a huge variety of age against the delivery of luxury service. agent who is advertising in muscle too, actually. If you try to be specifc to Skif. What about technology in the to get people through their site, and one group, then you’re cutting out a lot back end? Or upgrading in-room ame- they’re giving the impression that it’s of your potential market. We do have nities to stay on par with other luxury cheaper when you book through them, a very strong children’s policy in our hotel product? which isn’t the case. hotels, which is driven from the center Forte: Obviously technology has Skif: Can you tell us something of the company, although it’s adapted helped to address things like stafng about your expansion plans with FSI? for each hotel to suit the occasion. Our levels because of the cost of employ- Forte: We’re now in a position to hotels are known for that. ment. It’s much higher today than it look forward on a very proactive basis. Skif: Do you have any internal was some time ago. And everyone I’d like to see my company be the frst conversations about adapting to Mil- wants to have the technology they have port-of-call for anybody wanting to go lennial travel trends? in their homes, so you have to keep up to Italy at the luxury level, where we Forte: One trend which has devel- with that all the time. will provide coverage across the whole oped signifcantly is multi-generational But I think the biggest efect that country. We have hotels in Rome, family travel, as I mentioned. More technology has is on the way that Florence and Sicily, but I want to be families of three generations will travel people book hotels. With online travel in a lot of the other major cities. Once for a specifc celebration and stay in a agents, they’ve cornered the market so we’ve got that, we’ll look at some of the hotel together, so the experience is a they can demand higher commissions, smaller cities and look at what type of little diferent than what the average and that’s one of the biggest issues in product we can manage, because a lot guest is looking for. But luxury hotels the industry today. We also spend a of these cultural cities don’t have good is about delivering bespoke service. lot of time on social media, but in the accommodations. You’re not going into a supermarket, short term, whether it’s actually bring- At the same time I want to start you’re not buying clothes of the peg. ing in much business is another matter. looking further afeld. I’d really like You’re having it tailor-made for you. Tings like TripAdvisor, that also to get into New York, I think that’s Tat’s what a luxury hotel is about, and becomes slightly artifcial because you very important for us. We haven’t got you should be able to adapt for every can manage your TripAdvisor, and if a hotel in North America, and 28% of diferent client that comes through you’re encouraging your guests to leave our customers across the group come the door, including diferent ages and positive reviews, then you’re actually from the United States, and therefore nationalities also, where there are dif- encroaching on the privacy of your it would be good for us to have an ex- ferent subtleties to be observed. guests. ample of what we do on the other side Skif: How is technology evolving Skif: Does the fact that your hotels of the Atlantic. We would also look at at Rocco Forte Hotels in terms of the are such individual experiences help moving down to Miami, and then look guest experience? drive more direct bookings? at Sao Paulo and Mexico City. Within Forte: I think it’s always evolving Forte: A large percentage of our Europe, I’m not in Paris, and I think it but in terms of the guest experience, if guests book directly with the hotels, makes sense to have a hotel in Moscow anything, I think it may have actually or if it’s a travel agent booking on their as well. worsened the guest experience in some behalf, they will book directly with the We’re going to be taking this very ways. In a sense, it actually interferes hotels. Particularly agents from the seriously and you will be hearing from with the relationship between the United States, which has a fantastic us over the next 12 months. We have staf and guest. In the old days in the travel agent network. Tey’re the top a very strong balance sheet and we’re restaurant, you had a cashier who did end in the market, and they have a going to be around for a very long everything by hand. Today, half of the huge knowledge of the destinations time. I’m not talking about a large time the waiter is on a computerized that they’re sending their custom- pipeline, but maybe we get to the point till. Same with reception. It always ers to, which they can recommend of having 20 or 30 hotels. Tat’s a nice takes two, three or four minutes to themselves. Tey’ve met the general range where the ethos of the compa- check in while they’re fddling around managers and the sales and marketing ny wouldn’t have to change, and our with their computer. executives, and therefore can almost family could continue to have a direct So from that point of view, it’s guarantee to their customers that they impact on the individual hotels and the not necessarily improved the guest will have special treatment when they individual guest experience.
62 Generator Hostels Carl Michel
Photo courtesy Generator Hostels
Generator Hotels has become Carl Michel recently spoke to Skif teracts with the person, how the events the poster child of a new about catering the guest experience to drive the experience, how the whole breed of design-aware and a primarily millennial audience, what atmosphere has to be curated to create role content plays in building brand an optimal experience. It’s learning budget-friendly hostels that awareness, and surprising shifs in about a very diferent sort of consumer ofer an upgraded experience guest behavior. An edited version of in comparison to somebody who wants by pairing locally inspired the interview is below: to know that there’s a 28-inch TV and a design and style with large pair of foppy slippers in the cupboard. common areas, free Wi-Fi, and Skif: What are some of the biggest Skif: In catering to that millennial challenges that you’re facing to im- traveler, is there a certain element of a range of shared and privates prove the guest experience today? the guest experience that takes priority bedrooms. Carl Michel: Our design-hostel over others or one that you’re particu- Te group recently announced $75 formula is very much targeted toward larly focused on? million in capital investment, which millennial travelers between 18 years Michel: I would say it’s about will be used to further fuel its glob- old and 35 years so one of the biggest creating genuinely shareable moments. al growth. Generator currently has challenges is simply understanding People want to travel, but because of properties across six European cities the mindset of the millennial traveler, the way the social blogosphere is work- with three new spaces slated to open in which is much more about the overall ing now, they also want to share their 2015 and plans to open in the U.S. in social experience of traveling and experiences widely with their friends. the near future. hospitality than simply hard product You have to create things that are Generator executive chairman features. It’s about how the brand in- genuinely shareable. It could be some 63 amazing design features in the hostel things like automating the registration that what we’re looking for now are or it could be some really cool events and check-in process to speed it up. It more city-ambassador types, people that they can talk about and connect will be something that improves the who really understand their city, know with. It’s creating quite distinctive guest experience. Our guests are not the cool places to see, and are sort of things rather than just a general warm clamoring for it, but it does give our connected in the cultural scene. Tere feeling. It’s got to be something that is staf more time to do the things that are obviously still certain functions really memorable so that people will we care about and that our guests care where you need technical expertise, come back to it again and again and about. Rather than spending a long but for the concierge and check-in feel encouraged to share it. time checking in someone, we want to staf, we’re looking for people who Skif: Are events something that make it a quick, seamless process so really love their city and want to share are being integrated into the guest our staf can spend more time talking it with strangers. When you arrive at experience? It’s no longer about just to guests about cool things to do in the a Generator, we would like you to feel giving guests a bed and shower, but city. like you’re going to get to know the city activities at the hotel? One of the downsides of the auto- as only the locals do. Michel: Absolutely. A Generator mation process is that it takes away the Skif: Has it proved difcult or easy Hostel has about 700 beds so it’s a very human interaction, which we think is to fnd hospitality-trained employees large space. Each who can also serve of our hostels have as local insiders? an event coor- What’s the process dinator and that “[Wi-Fi] has to be fast, because people for vetting some- person is charged one? with bringing are streaming more, and it has to be Michel: It’s in music, art, free, obviously. We wouldn’t dream of gotten easier as fashion, design, we’ve gone along. and things from charging for Wi-Fi and I think hotels We operate in a lot the city into the diferent coun- hostel to create that do are, frankly, on the way out. tries and it varies a really vibrant from country to series of activities country is the throughout the simple reality. In week. Tere is a bit more of a focus on a very key part of our brand and a key certain markets like Ireland or Den- the weekends, but there’s stuf to do in part of the experience that millennials mark it’s actually been quite easy. It’s the hostel across the week. want. Tey want to talk to people and a little harder in some of the Mediter- Skif: What role does technology meet people. Unlike an airport where ranean countries where they’re a bit play in improving the guest experi- people say, “I want a seat,” or “Get me more strict on hospitality training. It ence? Is either consumer-facing or through the airport quickly,” what we takes a little longer to get people to back-end technology more important want to do is facilitate more time to open up and understand that it isn’t to improving the guest experience? talk to people by having less time spent just a hotel background that matters, Michel: It’s a bit of both. Clearly on the boring registration piece. It’s that i’s about having a graphs on how you need to provide content through not part of our intention to move away the city works. Te answer is trial and your websites about what’s going on from human interaction, far from it. error, and it takes a little bit longer in and what the cool things to do are. We think that’s a mistake. certain markets, but we’re getting there You need a consumer-facing side that Te other thing I should mention is everywhere. I’m confdent of that. is very up-to-date, but what is actually that we have invested in upgrading our Skif: Tis question will be a bit pivotal here is having excellent and Wi-Fi across all of our hostels. It’s has diferent for a hostel in comparison renewed visual content: Videos and to be fast, because people are streaming to a hotel, but what are your views on photos. Millennials don’t read that more, and it has to be free, obviously. the increase in hotel fees that are being much anymore. Tey like to see and We wouldn’t dream of charging for levied against guests at major hotels? sense things so you have to be really Wi-Fi and I think hotels that do are, Michel: In our hostels, you will pay lively in having, whether it’s on Insta- frankly, on the way out. for the bed and we make it absolute- gram or Flickr or Tumblr, a lot of new Skif: Talking about the interaction ly clear in advance that that doesn’t content almost on a daily basis, to kind with staf, how has the hiring expe- include breakfast, so that’s extra. Te create an experience. Tat’s relatively rience changed or evolved over time Wi-Fi is free. Tere isn’t usually park- straightforward and doesn’t have a lot to match the changes in the guest expe- ing because our guests arrive by public of technology to it. rience or guest expectations? transit. Most of the hotels are taking On the back end, we’re looking at Michel: It’s evolved in the sense a lead out of the airline books, trying
64 to create more proft, and I think, as with email so you have to focus on do you work with local insiders in the long as it’s upfront, it’s kind of up to the social media to communicate. Forget diferent destinations? guest to work out the total cost. email. Michel: It’s an absolute mix. When If you can’t add up numbers or Skif: How has social media and you’re opening a new property, you you’re comparing apples and oranges visual content changed the conversa- have to have your in-house team as the cost then that’s your problem. tion that Generator is having with its because you have yet to have guests to Generally, I think, guests appreciate the customers? photograph it. Later on, we like to use honesty and they like to know exactly Michel: We’re a discovery brand so local bloggers. Bloggers are actually what they’re getting for what they’re the conversation is less about talking brands in their own right. Tey’re like paying for. If you don’t want something about hard product attributes, which a wrapper around our product, because then you shouldn’t pay for it. Tat we used to do, and is more about bloggers have followers, and if a blog- seems to be fairly straightforward. At talking about the environment and the ger endorses your product then that’s Generator, it’s very simple. Everything mood and making people see that your a great way to get good connections or is free except food and beverage. brand is an extension of their person- make you go viral quickly. Once you’ve Skif: What’s one unexpected shif ality. We use content to say, ”We like got the bloggers moving then you get that you’ve seen in guest expectations you. We understand you.” Te content the guests coming in and, sometimes, or demands in the past few years or has shifed away from a very direct sell they’re good at creating great content decade? of hard attributes to a sofer mood and too. Michel: A new thing that’s quite feel. We like the rawness and the au- interesting to me is that guests are It absolutely has to be visual. Short thenticity of user-generated content, using their mobile and tablet devices videos, not too long because people we’ll augment it with bloggers or our way ahead of the purchase decision don’t have attention spans of more than content as we go along. It also costs now. In the past, guests would book a few minutes, or great photography. more to do your own stuf and less to on their mobile phone because they We usually use user-generated content, get guests to do so it’s about budgets were arriving in city and didn’t have but sometimes we use our own pho- as well. Instagram is becoming much, anywhere to stay. tographers will capture the mood of a much more prevalent so it’s about cre- Now they’ll actually do the entire party. Images tell people much more ating the right parties and events that booking experience on their mobile than can be said with words. people will photograph and talk about. device. Tat goes back to the essential Skif: What’s the creation process If you create the right atmospheres and of having a fully responsive site. Also, for the content? Does Generator have moments then those tend to get share millennial’s will essentially not bother an in-house team that’s creating it or on social media.
65 Vail Resorts Rob Katz
Photo courtesy Vail Resorts
Ski resorts are swinging guests’ largely outdoor stays. Vail CEO are coming us to ski and recreate in the Rob Katz has lead the group since Feb- outdoors. into their busiest season of ruary 2006, introducing its EpicMix ski Te two trends that we see and fo- the year with loyal season app, appealing to a growing “Red Bull cus on is asking how we can provide an pass holders and frst-time generation,” and turning the season absolute luxury experience and, at the amateur skiers preparing for pass into its primary product. same time, have it be consistent with one or several trips to the Katz spoke with Skif recently about this kind of outdoor recreational expe- balancing guests’ tech and leisure de- rience. It needs to be authentic. One of mountains. No brand name mands, fostering loyalty, and attracting the challenges we face is fguring what is as well known as Vail when a younger customer base. we can do, for instance, inside the hotel it comes to discussing lofty room to drive loyalty and increase sat- winter travel plans, putting Skif: What are the biggest chal- isfaction while also connecting guests the resort and hospitality lenges that you’re facing in improving to the out doors. Te other is technolo- the guest experience? gy, which has provided numerous new company in a unique position Rob Katz: One of the unique pieces options and opportunities to impact to lead the industry in for us is how we integrate technology the guest experience. innovation and experience. into the guest experience. We have a Te question for us is how create Vail Resorts has been quietly higher-end guest and our approach is the guest experience that’s true to our confronting major challenges in recent to create this incredible guest experi- high-end nature and works within an years from determining millennials’ ence that is on par with the best of the outdoor recreational experience. Te interest in ski as a sport to determin- best in travel. We also provide an expe- other piece for us is that we’re seeing ing the role of technology during their rience that is very nature-based. People a huge infux in international tourism
66 from a variety of diferent countries. interfere with somebody’s experience Skif: Are you fnding that guests How do we provide things that are in nature. gravitate towards experiences in nature unique and specifcally tailored for About fve years ago we came up without technology or do they want them and, at the same time, maintain with a concept that put a RFID chip the technology and not mind if it inter- our authenticity? in every single ski pass. As the guest feres with nature? Skif: What role does technology is skiing around the mountain, we Katz: When we launched EpicMix, play in improving the guest experi- can provide them information about people asked why guests wouldn’t just ence? Is consumer-facing or back-end their ski day, like how many vertical use the GPS on their phone to track technology more important or efective feet they’ve skied, that allows them to their ski experience. Our experience than the other? track and compete with one another. is that the vast majority of our guests Katz: Tey are both very import- It’s a Nike Plus-type experience. One of do not to be fddling with their phone ant. One of the things for us is that the bigger innovations that we’ve done tracking the experience while in the we’re operating a comprehensive resort as a company is around photos. Most middle of it. We put the RFID chip in experience. In addition to operating a resorts had professional photographers the ski pass so guests don’t have to pull hotel, we operate a ski mountain, ski and guests could go online or in store our their phone or use an app. It’s all school, numerous restaurants, rental where the resort typically charged a happening seamlessly in the back- stores, and a trans- ground. portation business I think that’s that takes people also true in our from the airport to “Our view on photos and this kind of hotels. People are the mountain. Te customer-facing technology is that, interested in tech- back-end tech- nology but they’re nology piece is if a guest wants to have a photo of not coming to us knowing who the for technology guest is, what their themselves at our resort and they want to and that’s import- background with put that on Facebook then that’s the best ant for us to you is, and what remember. Tey’re their needs are. advertising we could ever get.” coming to us for We are spending leisure experience. a tremendous Skif: What amount of money changes are you to bring together expecting in the all of those database. fair amount of money for each photo. kinds of guests coming to Vail Resorts We’ve developed our own kind of I thin that’s a somewhat antiquated and how will you cater to them? Google search experience so if you go process. Katz: Tere have been concerns up to a lif ticket window, we know We decided that we would use for many years in our industry around who you are and can provide the right our mountain photographers to take what happens as the baby boomers service based on that. We’ve seen that pictures of our guests then scan the age and how the kids of baby boomers can be really successful at improving RFID chip in the ski pass and upload will pick up the sport. It’s something the guest experience and reducing the the photos directly to their online that golf and tennis is struggling with amount of a time a guest might stand account. Instead of charging for the right now. Te beneft that we had was at a counter. If the guest is renting skis photo, we gave it to the guests for free that the industry as whole decided to then they walk in and we know they so they could share it on Twitter or open up parts of the mountain to more rented skis three years ago at another Facebook. Our view on photos and this creative opportunities. Tat started one of our resorts and they don’t have kind of customer-facing technology is somewhat with snowboarding in the to fll out paperwork. that, if a guest wants to have a photo of 80s, but then you look at freestyle ski- All of that is the back-end be- themselves at our resort and they want ing and terrain parks and new equip- cause the guest doesn’t see it, but it to put that on Facebook then that’s the ment and kids have become really dramatically improves the experience best advertising we could ever get. We excited and enthusiastic about skiing. that we can provide the guest. On the really shouldn’t be charging the guests It is kind of free expression, which is front end, one of the big eforts that for that; we should encourage guests diferent than golf and tennis. You look we’ve put forward is with an app called to do that. When we removed the fees, at what we call the “Red Bull” genera- EpicMix. Te question that we wrestled we saw an explosion in the number of tion watching sports like the X Games with for a long time was how do you photos that were being posted about and all that energy is really directed introduce technology onto a mountain our resort by our guests on Facebook towards ski resorts in the winter. experience, but, at the same time, not and Twitter. Te way that afects our business is
67 that when families are making vaca- our guests. is our season pass. Almost 40% of our tion decisions, Mom and Dad love Skif: What’s your perspective on lif ticket revenue comes from people the mountain as it’s always been and the increase in hotel fees across the who are buying a season pass. Te kids wants to come to be Shaun White industry? How does that impact the travel industry kind of created loyalty and have that kind of experience. Tat resort business? programs so every time a guest went whole genre becomes an addition Katz: As someone who has traveled to a property, they would build points. attraction so we can maintain our con- quite a bit myself, I think the question Ten every time the company, wheth- nection to the whole family. always comes down to value. Some- er it was an airline or hotel company, Skif: How do resorts like Vail align body might charge you a fee and you added new properties or services, the themselves with the “Red Bull gener- may feel like that’s a great value. I’m new property would get these loyalty ation”? not talking about being charged lef members. Katz: What we do is create areas and right; I’m talking about a set fee. If Marriott bought a new property within the mountain that are tailored Te approach we take is asking how in Bali then everybody with Marriott to freestyle skiing, snowboarding, and many things we can bundle into the fee Points can use points at the property younger demographic. At the same to make sure that people feel like it’s and it does well. Adding that property time, most of the mountain is available fxed and they’re getting a good deal in Bali also makes the loyalty program for traditional skiing. Kids have much when they do it. look more robust and attractive. Our more autonomy than they have on You hear two messages from guests. company has kind of done the same most other vacations. Te family might One is that they want choices and thing where we have our own loyalty separate during the day so it provides options. Te other is that they want program with a focus on our season a kind of unique vacation experience. us to make things simple for them. pass. We’ve said, “Look, if you buy all We think it’s why our guests are so pas- Tey don’t want extra charges on top of your skiing from us in advance then sionate about this kind of vacation. of whatever they’ve agreed to when we’ll give you a ridiculously great rate.” Skif: Has hiring changed at all in they come to visit us. Tere are certain Tis was the development of the the last few years to meet changes in properties where we do absolutely have Epic Pass about six years ago, for $700, guest expectations or demands? hotel fees and resort charges and we with which guests can ski all of our Katz: We spend a fair amount of are very clear about what’s included in resorts all season long with no restric- time and resources on improving our this. tions or blackout dates. People thought recruitment eforts, which includes We’re not getting negative feedback we were crazy, but the reason we did assessing the best place for us to fnd from our guests about that. We have it, and it’s really panned out, is because employees and the characteristics that other hotels where we don’t charge, people feel a level of engagement and make for good guest service employ- which may have a more limited service loyalty to the company. Also, every ees. Tere are real challenges with that that’s included in the room rate. Be- time we buy a new ski resort, all of right now. cause we have a variety of properties our season pass holders, of which we You can use technology and more at diferent price points in diferent have about 400,000, can go and ski that sophisticated tools to attract employ- locations, we really listen to guests. If resort. It really energizes any resort we ees. In almost the same way that we use we’re receiving feedback that this isn’t buy. marketing and analytics and customer something they want then we just take We feel like we have kind unique relationship management eforts to it out. We can’t keep a resort charge twist on guest loyalty, and advanced attract guests, we’re now using those or daily fee is your guest is tell us that booking. Because we sell our passes same things to attract employees. Te they don’t want it. anywhere from two to nine months market for guests has obviously gotten Skif: Is there anything else unique ahead of the season, we’re locking in incredibly competitive, but the market at Vail that’s signifcantly impacting the that guest’s trip in revenue. Te prod- for employees has also become very guest experience? uct has created the greatest amount of competitive. We have to be as good at Katz: One of the unique things that guest enthusiasm and loyalty that we marketing to employees as we are to we do here, it’s pretty unique in travel, have at the company.
68 Auberge Resorts Craig Reid
Photo courtesy Auberge Resorts
Auberge Resorts is a high- him in the hotel kitchen, at the front from routine or traditional products. end collection of owned desk, handling reservations and ac- If you were to look at, for example, the and operated hotels counting, setting up room service, and top ten hotels that Travel + Leisure or fnally getting into management. Conde Nast writers historically com- located across the U.S. and “You were learning a craf but it ment on, it would be big brands. As of internationally. Each property was a rich, rich way to learn,” explained late, it’s hotels that are more intimate is designed to refect their Reid in our recent interview. and bespoke, have a greater sense of unique outdoor surroundings, A hotel collection like Auberge has personality, and resonate with the with an emphasis on a diferent perspective on technology environment. and service than a corporate hotel ser- Skif: Have there been any chang- personalized service and vicing the same business traveler 200 es in what customers are seeking out access to unique experience. nights per year. Reid shares his insights or expecting from this breed of more Auberge CEO Craig Reid joined and goals in an edited interview below: intimate, bespoke hotels? the group in January 2014 follow- Reid: Yes, there are a couple of key ing a more than 30-year career with Skif: What shifs in guest expecta- changes. Tere’s this idea of being able Four Seasons Hotels and Resorts. His tion and demands have you seen in the to have an experience that’s catered primary task is to expand the Auberge past couple of years? to the group or the individual. People collection internationally through the Craig Reid: Te single biggest are becoming more accustomed to Caribbean, Latin America, Europe and thing that we’ve seen post-downturn is having things done their way verse Africa. people want a greater sense of, what I them adjusting to the environment. Reid started his hotel career with call, real identity. Tey want a sincere Simple things like being able to ask a four-year apprenticeship that placed product and they’re moving away how you want something prepared. It’s
69 fascinating to sit or stand at the table of that we’re trying to push within our sentation of food. In our restaurant guests and see how everybody tweaks organization is to look for ways to be- today, we certainly want a chef that has the menu. Tere’s also a great sense of come even more attuned to the guest, a signature approach, but realistically what rooms can ofer and how they can to make sure we’re not scripted in the we need a chef who gets excited about be confgured. way we do things, and to encourage listening to guests’ wants and tailoring On the service experience, there’s creativity, reward agility, and allow food to match that. a higher degree of expectation that properties to really connect with local Skif: What role does technology the service should be tailored to the communities and share that in a caring play in improving the guest experi- individual. Tere’s less adherence to way with guests. ence? time and protocols and guests really Skif: You mention your staf and Reid: It has a role on two levels. require the service entity to organize we’re curious to hear more about how One, technology is ofen the medium the experience around them rather the hiring experience has changed to by which guests are introduced to you than the guest organize himself around match these shifs in guest expectation. or communicate with you either in the experience. Itineraries are shifing Have there been any changes to who the frst interaction and/or as a way of away from what I call the more tradi- you hire to match that? reconnecting. So mobility and how we tional forms of portray ourselves entertainment to is fundamental. something more We are in a world unusual. It has a “I think we’re at a tipping point where now where associ- great richness in they will migrate away from their phone ation and aflia- connection to the tion are key. We community and and be looking to use tablets as a way to look to manage a strong sense of our community, being immersed in communicate with the hotel as to their create a relation- the location that needs, and maybe for greater control of ship, and commu- the guest is in. nicate in a very Skif: What the room.” social way with are some of the our customers. biggest challenges Technology that you’re facing gives us the plat- to improve the form to do that guest experience and to meet these Reid: In our business, the funda- and keep a very intimate relationship new demands of guests? mental to hiring has always been to with our guests in a way that’s com- Reid: I spent a 30-year career with identifying individuals who are truly fortable and in a medium that they can Four Seasons, which is a brilliant com- caring and enjoy serving, who have relate to. pany that has a sensational job with a personality that quickly warms up Te inside of our hotels have an service. Yet, there we were looking to the guests. Certain people have it organic quality and intimacy where for ways to become more agile, more innately and certain people don’t. Our I would say, in general, we are less responsive to the guests. I was curious entire screening process is less about gizmo-focused. However, being able as to how that would translate with skill and more about culture and ser- to provide a platform for our guests to Auberge: We’re a smaller portfolio and vice afnities. link to their world with free Internet our hotels are smaller. On that front, things have not and hot-spots is key. We use technol- By virtue of both, it’s easier for us changed. We would prefer to take ogy to track our guests’ preferences to change the way we do things and/ someone with less experience and a in a very sof and understated way. or adjust to the sensibilities of the personal gif than someone who is Ultimately, it’s how you harvest that guests. Due to our scale, we’re closer to very experienced but at risk of being information and make sure that it’s the guests. Te guest as an individual set in their ways. Having said that, we done in a way that is respectful of their verses a room. Te larger the hotel, the want people who are going to be able privacy. only way to truly track your guests is to empathize and respond to what the I think just simple things in terms by the room number so they’re asso- customers’ wants are. of making sure that you’re providing ciated with a spot versus as an indi- I’d like give you one example. I the tools for the guests to use their own vidual. In a small hotel it’s very easy to received culinary training in Europe technology in a seamless way. So, for develop a intimate relationship, to get where people were trained in a very example, lounges today have to have to know your guests, and for us to have strict manner. Fundamentally your power outlets adjacent to the table our employees react. customers came in to eat your food settings. Tat was never the case as I think the single biggest thing and every restaurant had their repre- little as fve years ago, but you go into
70 any lounge and more than likely you’ll average rate in North America is close and tops. I think the hotel industry has be looking at tables and the guests to $1,000 so these are just some of the to do the same thing and ofer guests will have one, or two, or three gadgets simple things that we include in the choices of pillows, sheets, and mattress available. price point. Our sense is that our pro- strength, to allow the guest to be able I was just recently at a hotel in fle of guests is very discerning or ultra to select the room type. Some guests Mexico, and I walked into the restau- wealthy and they really want these sort want baths, some want big showers. rant in the morning and there were of things bundled. Tey want a simple, Some guests want more furniture, three tables seated and they had these clean experience without any incre- some want less furniture. Tis is on the newspapers printed at the front door. mental charges. physical side. I looked at the tables and no one was Skif: Looking forward, or looking On the service side, the guest is reading the newspapers, they were ahead, is this kind of guest desire for saying, “My fight from Europe arrives all on their iPads, or computers, a more lifestyle experience for to feel in early in the morning and I need or phones checking up on news or more connected to a destination, like availability then. I expect you to tailor catching up on their world through so many of the resorts do, how do you the experience to me versus me having their individual tools. Just being able see this evolving? Te guest experience to conform to you.” to service that and provide the services for somebody who stays at a hotel at a I see the whole dynamic of hotels for that is key. luxury kind of lifestyle hotel; how does responding to the customer more at We’re fnding that the key touch that product continue to evolve to meet the luxury and very high end; howev- points that guests use for services are guests’ evolving needs or desires? er, if it’s extremely expensive then it’s still primarily the phone, the hotel Reid: I see us providing and look- harder for the middle of the market to phone. But, I think we’re at a tipping ing for ways to provide much more deliver that. point where they will migrate away choice. You typically go to a hotel, Skif: It will be interesting to see from their phone and be looking to use which has a line of soaps and a line the day when you can cater your hotel tablets as a way to communicate with of linens and one approach to food. I experience as much as a pair of cus- the hotel as to their needs, and maybe think the guest wants to be provided tomized Nike’s. for greater control of the room. In all choice. Reid: Right. One of my goals in the honesty, because of our scale, we’re not If you think about the hotel expe- short term is for guests to be able to a pioneer on that subject, but we’d like rience, guests go up to a wall where check in to the hotel as they’re going to keep abreast of key industry trends. there’s a receptionist who looks at a from the airport to the hotel. Ten Skif: What are your views on this screen, selects a room and gives you a certainly they can look up the available increase in fees and does that have any piece of plastic. It’s almost a secretive rooms and decide whether or not you space in a place like Auberge? and surreptitious in how it happens. want the room that I selected for you. Reid: No, not at all. Wi-Fi at our Compare that to where the airlines Same thing with the menu. How do hotels is free. Quite frankly, if rooms have gone, where customers control you want it done? So that the menu are available early, we’d love to have the screen, seat and menu in advance. really becomes a reference point and the guests there early and if the guests I think that’s just become the norm. maybe some points of expertise, but we need to stay late, it’s our pleasure to be Customers go into a shoe store and would encourage you to, sort of, craf able to accommodate them. I would select the material or assemble fur- your own experience and tell us how say the entry point is higher, our niture by matching diferent bottoms you want it done.
71 Commune Hotels Niki Leondakis
Photo courtesy Commune Hotels
Commune Hotels and her in the center of the lifestyle hotel gram our hotels and engage our guests. sector whose growth was evidenced Tose changing attitudes and habits, Resorts is a relatively new by IHG’s $430 million ofer to acquire combined with globalization, the hotel company, which formed Kimpton last week. breaking down of barriers, and cultural in 2011 when boutique hotel Leondakis recent spoke to Skif diferences is redefning how we bring brand Joie de Vivre merged about hiring for spirit, how diversity the hotel experience to the guest. with luxury lifestyle brand of staf impact guest experience, and Skif: What are some of the major the role of content in engaging new shifs that you’re seeing in guest expec- Thompson Hotels. In addition customers. An edited version of our tations or demands? to the two founding brands, interview can be found below. Leondakis: A lot of people focus Commune recently launched on millennials and what that particular tommie, a value-oriented Skif: What are the biggest chal- demographic wants from a hotel stay, that combined the luxury and lenges that you’re facing today to how they make buying choices, and improve the guest experience? how they engage, but I think that the bespoke lifestyle elements of Niki Leondakis: Te biggest chal- millennial attitude is more of a prevail- the former brands. lenge is understanding changing guest ing attitude that crosses generations. Niki Leondakis, the company’s cur- attitudes and travel habits. Tey’ve It’s a cultural shif and millennials are rent CEO and one of very few women been changing at a rapid rate in the the catalyst. People today want a more leading a hotel corporation, joined last few years for a variety of reasons. familiar level of engagement with Commune in 2012 afer serving as Te challenge is interpreting how those hotels; they don’t want the servitude COO and president of Kimpton Hotels changing attitudes and habits can best of years past. Traditional notions of & Restuaurant. Her experience puts be incorporated into the way we pro- luxury are fading and being redefned
72 by the contemporary lifestyle traveler. will believe in them and understanding when we open new hotels. We hired Skif: What does luxury mean to what their motivations are. Are they more than 400 team members at our today’s travelers? someone who enjoys giving it back to most recent opening, the Tompson Leondakis: Travelers are looking others? Are they someone who creates Miami Beach, and because the gen- for functionality over fash. It’s not all transformative experiences in their eral manager embodies that spirit, he about a high ratio of staf members to everyday life, not just because it’s a job attracted team members that embody guests or 1,000-thread count sheets. but because they can? that spirit. It’s incredible the heart and It’s more about streamlined amenities We really look deep into the per- soul that that two-week-old hotel has and getting what you want when you son’s heart and soul to understand who amongst the team members. It’s refect- want it; convenience and efciency they are and what motivates them. For ed in the feedback we’re getting. Great over excess. Guests want to pay for the most jobs, we can teach technical skills. people attract great people. services and amenities that they spe- We can’t teach human spirit. Skif: What role does technology cifcally want, not pay for broad levels Skif: Is it difcult to interview play in improving the guest experience of service amenities that they’re not someone for something like human at your hotels? necessarily going to use. Today’s trav- spirit? Leondakis: It plays a major role eler wants team and it defnitely members to have a leads to greater more human level engagement. It’s of engagement, “For me, a commitment to the diversity so prevailing in all to knowledgeable service industries about the neigh- of our executive team and our hotel is when used efec- borhood and the tively to exceed community they’re very high. I think that’s an opportunity guest expectations. in. For example, Skif: What for all of us to do a better job serving when you go into role does staf play the individual needs of our guests so a retail store to in improving the make a return guest experience? that we can really harness the diversity without a receipt, Leondakis: the store has the We focus a lot of thought that comes from a diverse technology to on hiring, the leadership team.” quickly look you recruitment selec- up, fnd your tion, and hiring account, confrm process. It’s really that you actually around the kinds bought the item, of people that we look for. Our belief Leondakis: We teach behavioral and deliver store credit in a couple of is that our people defne our brands. interviewing, how to ask the types minutes. It makes life easier. It takes all Te traveler who is choosing to stay of questions that give us insight into the friction out of a service experience. in a lifestyle hotel defnitely has an what people are all about and what’s If we can harness the information that attitude of wanting to fully immerse beneath the surface. One of the things technology is able to provide us to and engage. We interview for attitude, that I’m defnitely clear on is that when deliver more personalized experiences personality, and emotional and social we make a great hire, someone who’s then we can deepen engagement and intelligence. It’s really the spirit deep aligned completely within our cul- cultivate loyalty. It should also lessen down within that human being that tural values and our higher purpose, any pain points across the travel jour- we’re considering and whether they that person attracts more like-spirited ney, beginning with the booking pro- fnd happiness in helping make some- people. Te more great people we hire, cess. Tat said, I think that sometimes one’s day. the more they attract people like that. technology gets over emphasized. It Skif: Have there been any changes It’s less difcult than you think. When really isn’t the point of the hotel. We’re to the hiring experience or process you have a great culture and live it and not trying to build tech hotels, we’re recently? breath it every day then every person just trying to use technology to provide Leondakis: Yes, we’ve gotten much you’re interviewing is really really guests with an experience that meets more specifc about the kinds of people looked at from an in-depth standpoint and exceeds their expectations and we’re hiring. We have in-depth inter- of whether they’re a cultural ft and takes any of the friction out of their viewing around interpersonal and so- understand the importance of that in stay. cial skills and we have peer interviews their day job. Skif: Interesting, what about back to ensure that new hires’ colleagues It’s showing up more and more inverse facing technology, or customer
73 facing technology? You mentioned engagement with guests. We published diversity of our travelers. both examples here, but are you more more than 15,000 pieces of unique For me, a commitment to the concerned with one or the other? Does content, which is a lot for a relative- diversity of our executive team and our one take up more of your time think- ly small portfolio, and pushed them hotel is very high. I think that’s an ing about either the back end or the across Facebook, Twitter, Instagram, opportunity for all of us to do a better front end technology here? Google+, and our brand sites. job serving the individual needs of our Leondakis: I wouldn’t say one is Skif: What are you views on the guests so that we can really harness the taking precedent over the other for us. increase in fees across the hospitality diversity of thought that comes from a We adopted a mobile frst strategy in industry? diverse leadership team. Use the diver- 2014 and pushed heavily to adopt lead- Leondakis: I’m not sure there’s an sity of thought to connect with a wider ing SEO practices. It’s in an efort to increase in fees, although there might array of people from diferent back- deliver consistent and quality experi- be more awareness and fees are shifing grounds, lifestyles, and orientations. ence to our guests across all devices. It’s into diferent areas. In an ideal world, Skif: You’re one of only two hotel also designed to deliver enjoyment and our guests would pay a daily rate that CEOs that we’ve found for this series. better serve current and prospective would cover all that the hotel has to Why do you think there’s still such a guests by making it easier to explore ofer other than minibars or food and lack of diversity in this executive role the hotels and the neighborhoods. beverage outlets. One size just doesn’t within the hospitality industry? We did this by providing richer sto- ft all. I don’t think you can really Leondakis: I think honestly it’s a rytelling, larger eye-catching photog- sum up what an urban boutique hotel matter of time. Tere are more and raphy, destination-inspired content cu- should be doing versus a beach resort. more women getting into the higher rated by locals, and social integration. What’s most important is that levels of leadership in executive ranks Our sites are now designed to load we don’t nickel and dime our guests. and CEO level positions in hotels. It’s faster, direct customers in fewer clicks, If there are any fees for services or defnitely taking longer than any of us and are optimized for all devices. Tere amenities that all guests aren’t us- would like. Part of the problem may be are single-page layouts, navigation that ing then they should be communicated that a lot of women choose to take a anchors on the page, all of which was very clearly and upfront so there are no step away from the career track in or- done to make it easier for our guests to surprises. der to have families and part of it may use our sites. Afer doing this, we saw Skif: Is there anything else about be that our industry is still dominated a 7-percent lif in our conversion rates the guest experience that you spend a by men on the boards of directors, the and more than 500-percent increase in lot of time thinking about? real decision-making roles. I think our mobile trafc since it launched in Leondakis: With the globalization hospitality is close to the Fortune 500 September. of travelers coming to and from places statistics that show the percentage of All of this is being done in an that they’ve never traveled to before, board seats and CEO-level positions integrated way to enhance the guest I think it’s really important that we held by women is improving at a snail’s experience. We are also heavily focused ensure that the leadership in our hotels pace on quality and relevance in our social and in our businesses refects the
74 Insights Kimpton and the Rise of Boutique Hotels While hotels have always been property with a charming artistic fair became mainstream. gateways to a destination, the boutique/ similar to the small European hotels he Another brand initiative, the Kimp- design/lifestyle hotel surge in the late had visited during his previous career as ton Wine Hour takes place at every 20th century elevated the urban hotel a fnancier. Tey were in stark contrast to hotel from 5-6pm daily in the lobbies, into a destination in and of itself. the sterile, homogenous corporate hotels when GMs converse with guests while Te idea of a neighborhood hotel typical of that era in America. complimentary wine and craf beer is acting as a community portal with a Schrager and Rubell, meanwhile, had served. To give everyone something to strong local following became a market been successful nightclub proprietors in talk about, concierges place iPads flled diferentiator for an exciting batch of the 1980s. Following tax evasion charges with fresh local destination information new hotel brands. and the advent of AIDs, the two men around the room. Within the last decade, the large shifed into hospitality and brought their Recently, most of the Kimpton global hotel brands have jumped on the impresario skills with them. Teir strik- properties have begun incorporating trend, and there’s also a new wave of ing “design hotels” appealed to celebri- employee recommendations about local mid-market brands reimagining the lo- ties and social elites due to their avant travel experiences on the hotel websites. calism trend for middle income brackets garde art/furnishings, hip lobby bars and Anyone from the GMs to custodial staf and secondary markets. Now, through- trendy music that spawned the concept are asked to share their favorite hang- out the hospitality industry, there’s of “lobby socializing.” outs, updated monthly, ofering a highly widespread realization that delivering a Most importantly, both Kimpton curated array of destination insight at a more immersive, layered travel expe- and Morgans designed and stafed their variety of price points. rience for today’s more educated and hotels to be kinetic social hubs in their “Troughout Kimpton’s history, connected traveler is, if not a necessity, a particular communities. Te hotels our most important initiative is called competitive advantage. became part of their community fabric ‘Like a Local,’” says Mark Jennings, When Bill Kimpton launched his because the creative design and quality regional vice president, hotel opera- frst Kimpton Hotel in San Francisco in of F&B attracted a signifcant following tions mid-Atlantic for Kimpton Hotels. 1981, and Ian Schrager and Steve Rubell of local residents. Before Kimpton, hotel “We are always providing our personal unveiled their Morgans Hotel Group restaurants were for the most part utili- recommendations for our guests on all three years later in New York, they tarian. In efect, the hotels became travel of the cool things that we think they created the boutique hotel industry in destinations in their own right, connect- may not know about. Tat’s what people North America. Tese maverick hote- ing visiting guests and local residents. want, whether they’re international, liers developed properties with a strong “From the start,” Kimpton told Hos- domestic or drive-in. Tey really want sense of place and individual identity. pitality Design magazine in 1999, “I something they feel they’re not going to When Bill Kimpton launched the wanted to create something unique, of- get somewhere else.” Clarion Bedford Hotel in San Francisco fering a European favor, good value and Kimpton operates two sub-brands— in 1981, he created the boutique hotel a sense of fun. Whether you are traveling Monaco Hotels and Palomar Hotels— industry in America. Since then, Kimp- for work or pleasure, you ofen arrive each with specifc business models and ton Hotels & Restaurants has steadfastly tired or worried, and a hotel should lif design missions. “All of the rest are al- maintained its early adopter status in your spirits, not put you to sleep as you most brands of one,” says Jennings. “Ev- terms of local design, locally-sourced step through the door.” erytime we go through the initial design F&B, corporate responsibility and com- Te local community mindset for process, it is always with an eye towards, munity integration. which Kimpton is well known is man- how does this tie in locally? What is Many hospitality trends in the U.S. ifested in myriad ways. For example, important to this part of the city?” can be traced back to Kimpton, which general managers lead bike tours for Adding further to the destina- now operates 60 hotels and a growing guests in Washington, D.C. through local tion-specifc favor, all of Kimpton’s collection of independent restaurants neighborhoods. When employees at any restaurants are separate entities de- across the country. Of those trends, the of the hotels work extra hours, admin- signed as standalone businesses. “Over most signifcant is an unerring sense of istrators send fowers or gif baskets to 80 percent of the business we get in place specifc to a local neighborhood. loved ones. In the 1980s, Kimpton was all of our restaurants is local,” explains Kimpton, who sufered from de- the frst corporate hotel group to publicly Jennings. “I can’t tell you how important pression, developed hotels that were an support the LGBT community in San it is to attract a local following. Te local antidote to his melancholy and adverse Francisco. And Kimpton placed a prior- business and people driving in have reaction to monotony. He designed each ity on local food long before local food kept us extremely busy.” 75 SIXTY Hotels Jason Pomeranc
Photo courtesy SIXTY Hotels
Jason Pomeranc was bred son and several other locations have the guest experience at the hotel? to be a hotelier. He attended since been transformed into SIXTY Jason Pomeranc: We’re always university in New York City properties, which currently include trying to improve the guest experi- three properties in New York City, one ence. I think that the industry and before joining his father’s in Beverly Hills, and ffh set to open all the factors relating to the industry real estate frm, which later imminently in South Beach. are changing so fast and guests have opened the 60 Thompson Pomeranc continues to iterate on a much broader sense of information hotel in 2001. Pomeranc the idea of boutique brand with a focus and expectation. People are marketing led what was then one of on personalized service, aspirational hotels and brands around a lot of buzz locations, and sophisticated food and words and catch phrases today. frst trail-blazing boutique drink options. Fundamentally, even with all this hotel groups for the next We recently spoke to Pomeranc evolution, it comes down to the same decade before merging the about the guest experience at SIXTY reason that people have always chosen 12-property brand with the Hotels, how technology has changed to stay at the hotels that they like. It’s Joie de Vivre chain to create how the hotel interacts with guests and the service culture, the aesthetics, and the evolution that led to the mass mar- the comfort factor. It’s the lifestyle ex- Commune Hotels & Resorts. ket appeal of boutique stays today. perience of moving slightly away your In 2013, Pomeranc announced he “outside the hotel” self to your “inside was leaving the company to launch Skif: What are the biggest chal- the hotel” self and immersing yourself SIXTY Hotels. Te original 60 Tomp- lenges that you face today in improving into that fantasy, a slight variation from 76 the harshness of your day-to-day life. there and guests are very smart about guests are using technology more It’s a combination of physical and how they’re fnding the best potential to interact with the hotel – they’re technological factors, but it’s all very value, how they’re fnding what accom- booking wake-up calls, room service, psychological. We’re trying to keep up modates them visually and program- and concierge-related activities. Tere’s with our guests’ emotions, their psy- matically. a lot of technology in play that allows che, and what they’re looking for when Te idea of “brand” has become them, particularly on a work schedule, they’re staying in a hotel. much more about specifc locations to structure their stay in a way that Skif: What elements of the guest and local options, because guests are feels organized and efcient to them. experience are you most focused on zeroing in on specifc properties with On the back-end side, technology improving at SIXTY? specifc room types. Tey’re getting allows our internal departments to Pomeranc: I am focused from a very granular in how they make their communicate better. It allows us to technical point of view. Technology decisions about where they want to garner more information about our is hard everywhere in our society and stay. Tat’s very diferent than it was a guests to hopefully make their future hotels are no diferent; it evolves and couple years ago. stays better and to sell a better prod- changes extremely uct as we move quickly. forward. We know that Te hotel guests are work- “Te online travel agencies has increased industry is a little ing, thinking, bit behind other and entertaining rate competition to the point where you consumer prod- themselves in a uct industries. diferent way than don’t have a lot of margin anymore to Industries selling they were even throw in these things for free. It ends particular items fve years ago. and e-commerce It’s important to up becoming an a la carte option, where are much more set up the public focused. It’s much spaces in our guest guests can choose to add or not add easier to attribute rooms in order to them. In reality, fees are by-products analytics to what’s be conducive to helping them sell that. of creating rate value for guests. Te and whether their It’s a much customer is satis- more casual work negative blowback is there are extra fed. If you’re sell- environment. ing a TV online Tey’re using the charges where guests just never saw them then you know lobby as de facto before.” what your price ofces, they use and return rate multiple devices is. If booking or and connectivity guest satisfaction is super import- is up at a hotel, ant. Te technology keeps growing but Skif: You mention how custom- there’s a variety of factors contributing the base needs to be strong. As we’re ers are discovering brands online and to that, not just technology. Technolo- evolving the brand, we understand through social media. What are some gy is helping but it’s not as clean cut as that people are playing, working and of the ways that you make SIXTY more other industries sleeping in a diferent way than they discoverable online? Skif: What are your thoughts on did before. Pomeranc: We’re creating content the increase in hotel fees levied against Skif: What are some other unex- consistently in order to immerse those guests? pected shifs that you’ve seen in guest who are still discovering where they Pomeranc: In a more competitive expectations or demands in creating want to go. feld, which major cities’ hotels are the SIXTY brand? Skif: What role does technology in, there are more hotels and more Pomeranc: Te way that guests are play in improving the guest experi- inventory. Because there’s a lot of great fnding you is very diferent because ence? Is consumer-facing or back- competition, hotels have to be a little of the same reasons. Brand loyalty is end technology more important or more focused on these additional fees. created so much through the virtual efective? Ofen these additional fees are world as opposed to the way that it Pomeranc: Technology is afecting farmed out to third-party vendors. For used to be. how we do everything in our day-to- instance, we don’t own parking lots in Tere’s so much information out day lives. On a consumer-facing side, New York City so parking fees go to
77 a third-party vendor. Tis goes for a headed? matically -- to be more creative and variety of other services. Pomeranc: If you look back 15 reset the standard. I think that’s just Te online travel agencies has in- years, the market was so much small- the nature of how the industry works. creased rate competition to the point er. We were one of the frst brands Skif: Tank you so much for where you don’t have a lot of margin out there, the W was in conception your insights. Is there anything else anymore to throw in these things for phase, and there was Ian Schrag- about the guest experience that we free. It ends up becoming an a la carte er and a couple others. Media and haven’t touched on that you are very option, where guests can choose to guests were so interested in what focused on or that keeps you up at add or not add them. In reality, fees was going on. We were changing all night? are by-products of creating rate value the preconceptions of how a hotel is Pomeranc: Te industry is chang- for guests. Te negative blowback is supposed to work and the big brands ing quickly, but in the end we must there are extra charges where guests noticed. At a certain point, they were all remember that, for the most part, just never saw them before. losing market share and we were we’re innkeepers. It’s about the basic Skif: Tompson Hotel Group gaining it. Tey had to react to that. human interaction, how things feel, was one of the early boutique brands, Having said that, I think it’s good how the front desk deals with some- but it has since become a major part for the industry as a whole to have so thing when it goes wrong, or how the of the hospitality industry. Global much comfort for the consumer and concierge can cater to guests’ stay. It’s hotel corporations are creating their certainly to have so much compe- the basic feeling of what you aspire own boutique or lifestyle-like hotels tition. But it puts the onus on an to and how a guest can elevate their or investing in independent proper- independent operator like us to again mood when walking into a hotel. ties. What do you think led to this change the parameters of what the Tat’s still the core issue. Tat’s still increased interest in the boutique industry is about and shif where the what we do. Everything else is just a hotel stay and where do you think it’s focus is aesthetically and program- tool to help us get there.
78 Denihan Hospitality Group Brooke Barrett
Photo courtesy Denihan Hospitality Group
Denihan Hospitality Group rett about hotels’ role as entry points to A lot of it is related to local, being is a 50-year-old family-run the local neighborhood, giving guests a more familiar with the community or company behind luxury and story to tell afer their stay, and striking neighborhood around the hotel. Art lifestyle properties branded a balance between technology and is a big factor in our hotels and people guest interaction. have taken a bigger interest in that. In under The James and Afnia our James hotels, we have cards that Hotel Collection as well as Skif: What are the biggest chal- guests can scan with their iPhone to luxury independents The lenges that you’re facing to improve the get a sense of the artist and the reason Surrey and The Benjamin guest experience today? that the painting is the hotel. It’s a way and afliates including The Brooke Barrett: Tere are cer- that guests can go back and tell their tainly a lot of challenges. One of the friends about a very diferent expe- Franklin, The Mansfeld and biggest is just coping with how quickly rience they had while in town doing Shoreham in New York City. business is changing and really how business or going to the theater. Te venerable brands names are as quickly customers’ needs and wants are well known by locals and travelers for changing. Te biggest shif that we’ve Skif: What are some of the chang- their roofop bars, spas and restaurant seen among people who stay with us is es or the shifs that you’ve seen in guest options. Brooke Barrett grew up in that everybody wants a unique travel expectations? hospitality brand built by her fami- experience that they can call their own. Barrett: Guests want what they ly and today leads the organization Te challenge is staying up with that want when they want it now. I don’t as co-CEO with her brother Patrick and being able to anticipate or be one know how else to say it, and so much Denihan. step ahead of what the guest is looking of that is tied into technology. People We recently spoke with Bar- for before they are looking for it. want a great experience on the website. 79 Tey want to easy bookings and an have always looked for people who like gouging the guest, but you have to look easy way to fnd out about the neigh- serving others so if there’s any evolu- at your business model and make sure borhood while they’re in the hotel. tion it’s that young people are more it is proftable. Tey don’t want to wait on a line to technologically driven. Skif: A little bit shifing gears check in or to ask the concierge a ques- Skif: In seeing how customers’ again is locals: Bringing locals into tion. People want what they want in a demands are changing, has the hotel the hotels. You know, Te James is a very easy, simple and connected way. supported more interaction between good example of a hotel that’s very well Skif: What role does technology staf and guests? How does technology known and popular with locals maybe play in improving the guest experi- get in the way of guest experience? in New York or a certain set of locals, ence in Denihan’s hotels? Do guests at Barrett: You’ve touched on one as it is with guests. How important is luxury properties want more or less of my pet peeves. When I walk into a bringing locals into the hotel for either technology? hotel and see someone looking at their food or beverage or pool, roofop to Barrett: We have new mobile apps computer versus the person checking how you’re designing these hotels. that we have at the Barrett: It all James Hotel and speaks to guests our Afnia Collec- wanting an expe- tion, which guests “People like those local things because it rience. Tey want can download on something that their iPhone, iPad speaks to more the educated traveler who they can go home or any kind of and remember the Android device. is in the know.” nice touch of local Tey can not just Brooklyn-made check in or out of chocolate or a the hotel, while in mini-bar with the hotel, they can order room service in, it drives me nuts. Tat’s one of the beer from the Hudson Valley at Te right on the iPad instead of picking up downfalls of technology: You’re so James SoHo. People like those local the phone. focused on that screen that you’re not things because it speaks to more the We also have push notifcations so really focused on providing just a smile educated traveler who is in the know, if a guest is at Te James Royal Palm to say welcome to the hotel. We do a fnding these little things that maybe and walking by the restaurant, they lot of training around the guest service other people haven’t experienced. can receive a push notifcation inviting and hospitality aspect, we reinforce Skif: Will catering to locals play them to come in and have a cocktail at that it’s really about the customer a bigger part in the hotel’s business a special discount. I think technology interaction and using technology to moving forward? is actually helping hotels to do business help you. Barrett: I think so. People are and make money at the same time. Skif: What are your views on this drawn towards boutique independent Skif: Do you prioritize back-end increase in hotel fees being levied hotels because they’re so individual- or consumer-facing technology? How against guests? ized. Te travelers today, in my opin- do the two work together to improve Barrett: It seems that fees, in ion, are a lot more adventurous than the guest experience? instances like a resort fee, are a way they used to be. People love to explore Barrett: It’s not one or the other; of doing business. As far as fees for and they want to explore what’s in that they need to work together. Te con- late check-outs or early check-ins, I neighborhood of the hotel that they’re sumer-facing website enables the guest think some hotels are testing the water staying in. to book online. Te back-end is all about which would or would not stick. Skif: What role has social media about making sure you have the tech- I think hotels are looking at airline and content played in changing Deni- nology that makes it easy for guests to change fees and seeing what models han’s conversations with guests? navigate within the hotel. work for the hotel business. Barrett: You need people in the Skif: How has hiring changed or For example, we just recently hotels constantly responding to com- evolved to match the guest experience? experienced a big slew of cancellations ments. TripAdvisor is a very, very help- Barrett: Te most important thing at one of our hotels for a certain week. ful tool, not only to people traveling, we look for is people who want to serve We have been asking ourselves whether but to the hotels as well because it gives people. I think you can train to the it would have helped or hindered us to general managers the opportunity to technology. All young people seem to have a fee for that. It’s something that actually talk with the guests. have a good aptitude for technology we’re trying to fgure out. I don’t think If you’re not proactive in managing and what they don’t know, as far as we know the answer. Tere’s so many your social media channels as a hotel how to learn a system to check in a other taxes being levied on the guests then that can defnitely afect your guest, comes pretty naturally. Hotels that you don’t want to come across as image and brand.
80 AKA Larry Korman
Photo courtesy AKA
In 1966 Larry Korman’s brella, Korman Suites, as a way to save Larry Korman: We have some- on the costs. thing for somebody staying two weeks father realized that there In 2005, Korman launched AKA, to three months, which is our sweet was demand for furnished a collection of luxury extended-stay spot for length of stay at an AKA. apartments with short-term properties in urban centers that’s Rather than room service, you have leases as an alternative to grown to include New York, Phila- a full kitchen so if you want popcorn traditional hotels. It started delphia, Washington, Los Angeles, at 1am or make tea, you do it in your and London. Unlike his more subur- own kitchen. If you want to go to the with just one apartment, ban properties, which appeal almost grocery store and get blueberries and which Korman started working exclusively to business travelers, AKA cereal, you can do that. If you want to at when he was ten years properties also compete for the leisure go downstairs and have breakfast, we old. He later went through a travel market, especially among fami- have that. training management program lies looking for more room. We have something called the We spoke with Korman about the “Live It!” experience for somebody to learn the more “traditional personalized guest experience that the who travels for a longer length of time. formal art of hotel hospitality.” extended-stay accommodations ofer, Rather than just sit at a bar or watch By the time Korman graduated how technology’s role changes based cable TV, we’re creating experiences. A from Duke University, the one apart- on length of stay, and the growing guest might say, “I’ve always wanted to ment had turned into 23 independent group of “elastic” guests. take swimming lessons or photography units around Philadelphia. Korman lessons or learn how to sleep better.” went around integrating the individual Skif: How does the guest experi- We set everything up. You tell us what management and maintenance teams ence at an extended-stay brand difer you want. of each apartment under a single um- from a traditional hotel? We have a partnership with NYU 81 School of Medicine Sleep Disorders If somebody is coming in for to do. Center and New York Sleep Institute delivery they don’t want a phone in the From day two to day 89, guests will where guests can create their suite to kitchen to ring, they want their mobile go to the front desk, which is the res- be more sleep inducing. If you want phone to ring. Tey don’t want to use ident service desk. Tey can schedule to learn how to play guitar, speak a a key to open the door, they want an dinner reservations or show tickets. language, or take cooking or nutrition app. We’re creating an app that opens We don’t have a concierge because that classes, we set anything up. It can be the guest door and controls the shades, becomes very jaded. Guests associate Tuesday afernoons or three times a lights, and music. When guests open with that individual profting. We have week. the door, they can have the lights and three dimensions to resident services: If you want to play guitar with Jon temperature already preset to a certain Te font desk which is third-party Bon Jovi then we can make that come level. We’ll be rolling it out in New brokers and agents that we’ve selected true also. It’s really like fantasy island. York City, Beverly Hills, and Philadel- and the apps that we suggest guests’ Rather than guests taking a step back- phia. put on their phone to help them with wards in their lives, there’s a way to Skif: It sounds like technology their stay. take two steps forward. Tey might be plays a really important part. How do Skif: What is your customer base gone for six weeks, but they’re going to you balance front-end and back-end and has it changed over time? come back healthier or with a new lan- systems? Korman: It’s more global than guage. Korman: Te diference depends traditional extended-stay or fve star Skif: What are some of the chang- on the length of stay. If someone is hotels. When Americans travel, they es in expectations or demands that gone in two days then they might be say, “I have fve days to go here and you’re seeing from the luxury extend- wowed by sleek technology or Ian I want to stay at the Four seasons.” ed-stay customer today? Schrager doing crazy stuf. If they’re Tey know where they want to stay Korman: We’re fnding that a lot gone for two weeks or two months and there’s a comfort level in the name of the guests are coming in with their then they expect to have a printer at brand. When someone is traveling own content so we’ve invested in mon- the desk, good lighting for work, and from Europe or South America, they itors and bandwidth in each suite. It’s a 50-100 MHz for bandwidth. Tey don’t want to stay in a Four Seasons or chance to stay competitive. expect certain things that they have a Marriott. Tey want to live like the Technology is important, because at their home. Tey expect a good locals, to holiday for a month. at the end of the day people want place to work out. I can miss two days Tey want to really get to know a strong complementary Internet of working out, but I can’t miss two the culture and the people so they’re connection to watch their own content months of working out. Tey expect to looking for something in a tree lined from the comfort of their living room live as good as they do at home, if not residential neighborhood where they or bed. When people leave home, better, and technology is an important can stay for a month, feel like it’s their they want technology, wellness, and ingredient. Tey want to be able to own residence, shop in the local stores, cleanliness. advantage of what the city has to ofer. get to meet people, and really interact Some of the tried and true basics All these expectations are at a and get to know the culture of New still exist, but you have to do it better higher level based on the length of stay. York City. than you did before and better than Tey want the value and spaciousness, We say we’re the world’s most others. Te long-term traveler is more but beyond that is an expectation to elastic hotel. Part of that is in a focus sophisticated and their level of scrutiny be able to live in a way that they live at on the length of stay and size, but it’s is higher than ever. You have to con- home. Tey need it, rely on it. also about the individual. Elastic as stantly get a day better, not a day older. Skif: Does the staf interact less or an adjective because they appreciate We’ve created something called the more with guests during an extended design and value getting to know the “AKA Way” so all nine AKA properties stay? culture of a community. Tey don’t can communicate with each other. If Korman: It depends. At one of our want to just come in and out and stay one of our head housekeepers develops properties, guests check in with a gen- at a brand name hotel. a tool to better tuck in the sheets, we eral manager instead of a front desk. Tey want to go to cool restaurants, share that with all the other house- Tat general manager might only have go to the shopping districts outside keeping leaders. two or three check-ins per day since Fifh Avenue, and experience the vibe Te strong demand for good cell the average length of stay is two weeks. of the city that they’re in. Our guests phone service really shifed a couple It can be fve minute check-in process are traveling equally for business and of years ago. Guests don’t want to be where the guest is sitting down, not leisure. We’ve found that people who charged for using a hotel phone. Tey standing. We fnd out what doctors are in for business want to enjoy the want to use their mobile phone and they need, which newspaper they want travel aspect and the people in for trav- that’s all they want. delivered, or which activities they’d like el want to enjoy the business benefts.
82 Insights How Alex Calderwood’s Ace Hotel Changed the Way We Travel
Photo courtesy Ace Hotel New York
With so much discussion in compass, and the temporal nature of attention is unprecedented for a hotel the travel industry focused on the times—a feeling that nothing could owner, especially one with only fve Boomers versus Millennials, be relied upon or fully trusted—com- hotels. Why is that? pelled a new generation to question Calderwood didn’t regard him- the Gen X crowd in the middle everything. self as a hotelier. He viewed himself always gets overlooked. Ace Hotel is an entirely Gen X more as an entrepreneur and “cultural For those of us born roughly phenomenon because it deconstructed engineer,” dating back to his club gigs between 1965-80, our biggest contri- the traditional urban hotel model with in gritty Seattle bars, which eventually bution to society was being the pivot the launch of Ace Hotel Seattle in 1999. evolved into hosting upscale parties between the age of reason and age of Most of what we consider Millennial for Nike and Microsof. Te admi- irony. We didn’t know what the big trends in hospitality today, placing a ration for Calderwood stems from answers were back in the 1980s-’90s, priority on personalized, local and au- his ability to engage with and inspire but we knew it wasn’t misplaced loy- thentic travel experiences, began with people from all diferent social back- alty to a rapidly globalizing corporate Gen X and a handful of innovative grounds and economic classes. Te America. hotel groups like Ace. world also always loves an underdog People called us “slackers.” We in- During the early ‘90s, Ace Hotel with big ideas, a wild streak and rebel- vented the reply “Whatever.” Looking founder Alex Calderwood was living in lious hair. back, we were trying to deconstruct the thick of Seattle’s booming grunge “He imbued in us a mutual faith life in the 20th century by refusing tra- scene, working as a music promoter in our shared ability to realize and ditional notions of status and success. and vintage clothing seller. He passed manifest meaning in the world,” reads Kurt Cobain and the Seattle grunge away last month at the age of 47. Since the In Memoriam post on the Ace scene became our new ideological then, the amount of social media Hotel blog. “Tis faith is the under-
83 Photo courtesy Ace Hotel Shoreditch pinning of all experimentation, and Hotel’s utterly unique design, which Wade Weigel opened the frst of 17 Alex instilled it in people efortlessly. has come to defne the Ace Hotel expe- retro Rudy’s Barbershops. Te vintage He was a punk anti-capitalist in the rience more than anything. Who puts design of Rudy’s honed in on the truest sense, in that he encouraged the a camper trailer by their pool like Ace post-war, all-American barbershop unwise allocation of human resources Hotel & Swim Club in Palm Springs? experience where men from diferent to risky ventures that took no heed A great in-depth story characteriz- backgrounds could gather and get a to consumer research. His gestures ing the Ace design vision is this Mon- haircut/shave at a reasonable price. were about instinct, and he made us ocle piece discussing the importance Rudy’s, though, provided modern all believe in ourselves, and make of thorough research into a building’s haircuts in an era when professional better work, by quietly requiring us to history. Calderwood delved into the men were beginning to spend more believe in our creative wolf-senses.” most minute details of hotel construc- efort on personal grooming. Probably the best story about Alex tion, spurred in part by his father who At Rudy’s Barbershop next to Calderwood to date is He Was Never was a contractor. He couldn’t tell you Ace Hotel New York, bare light Afraid, written by a long time friend. his bank balance but he could tell you bulbs overhead illuminate unpainted Te story recounts a time the complete history of the windows he industrial tables with bare metal legs when Calderwood’s manager Caterina chose for a particular hotel. running the length of the wall-to-wall deCarlo asked him why he was meet- Calderwood was also militant mirror. Tere is nothing extraneous ing with this weird guy he met on the about partnering with local designers or contrived, the vibe is old school, corner who thinks he has an idea. and suppliers, long before it came into the stencil fonts are new, the music is DeCarlo explained, “He just made vogue. folksy, and the staf is chill, hip and time for everyone. He saw interesting “Where you stay says much about completely professional. ideas in the most uncommon or un- who you are,” he said. “Who wants to Te template for Ace Hotel had predictable places. He was just super stay in a city hotel that isn’t connected been drawn, both in terms of design generous with his time; he wasn’t or engaged with the local areas and and appealing to a surprisingly broad hierarchical about it.” communities?” clientele. Te lessons Calderwood Another reason for so much at- Te Ace design story begins in learned between Rudy’s Barbershop tention heaped on Calderwood is Ace 1992 when Calderwood and his friend and Seattle’s club scene, working with 84 everyone from GAP employees and material that nobody else wanted,” that it represents retro cool. It’s also struggling artists to white collar pro- Amit Shah told Te Seattle Times in highly functional—indeed, purely fessionals and tech nerds, informed November, who hired Calderwood out functional. McMaster-Carr is an his transition into hotels. of high school to help run his clothing industrial supply Chicago frm that shop. makes U-bolts, sprockets and 480,000 Don’t Call Me a Hipster Referring to a time when Calder- other products. wood used materials from a Boeing Today, this non-fussy, indus- When Calderwood, Weigel and surplus store to create fxtures for the trial-chic, vintage/retro, hipster-y, their friend Doug Herrick opened Ace shop, Shah said, “He always had a de- culturally-hip, well-educated, artistic Hotel Seattle, they did so on a hunch. sire to come up with something new.... soulfulness in hotel design isn’t all Tey believed that enough people He was an entrepreneur and knew how that unique. Alex Calderwood made would spend $65 for a room with a to entertain, but more than that, he it a thing over a dozen years ago, de- shared bathroom inside a restored was always willing to talk about what livering a hotel experience that Gen X fophouse in a dodgy part of down- the new thing was. He knew how to get travelers could call their own. A hotel town Seattle because they wanted to to folks in their 20s and 30s.” that made you, for a short period of be close to the city’s arts and music Much has been written about the time, a better you. A you you want- scene. turntables in Ace Hotel guest rooms ed to be. A more educated, cool and “We put a deal together, jumped and old typewriters in the lobbies, and creative you. into the project with both feet, had how local artists were hired to decorate Tat was the allure for Gen X. absolutely no idea what we were the walls with paint, chalk and vintage Tey were rebelling against the cor- doing, and through instinct came up street signs, among other things. porate machine alongside a Seattle with something fresh,” Calderwood Calderwood created a Gen X aesthetic club kid with a Sideshow Bob haircut, told BlackBook in 2009. that earned such cult-like applause that a beat up hotel and an unwavering By that time, both independents it was satirized in Portlandia’s “Deuce struggle to create something wholly and large corporate chains were Hotel” video. personal and original. experimenting with boutique hotels Tose were more Calderwood in- but they were primarily targeting novations. Few hotels used local artists Ace Goes Global the luxury and corporate markets. to create wheat paste art above guest Calderwood & Co threw their hotel room beds. And the phrase “residen- Following Seattle, Ace Hotel together with a string and a prayer, tial-style accommodations” wasn’t opened in Portland, Palm Springs relying on Calderwood’s innate ability common either in the hotel industry in and New York. What makes Calder- for bringing people together from all 1999. Calderwood designed his guest wood’s passing even more shocking, walks of life. rooms as if you were sleeping over at Ace is presently undergoing its most Tat’s why he never gravitated a friend’s house, albeit a friend with ambitious expansion in its history. toward the “hipster” label, and wasn’t much more eclectic design tastes than Ace Hotel London Shoreditch opened in love with people referring to his most people. in September inside a restored ex- hotels that way. He found the term Calderwood also revered the Crowne Plaza hotel. New Ace Hotels contrived, limiting. stripped-away essential in everything, in Los Angeles and Panama are pres- “We don’t view ourselves as just like his spare metal tabletops and bare ently taking reservations beginning in catering to a sort of bleeding-edge bulbs in Rudy’s Barbershops. January. audience, or a bleeding-edge hip audi- For example, from the previously Te Ace PR team has been on a ence,” he told the New York Times in mentioned New York Times story: bit of a self embargo over the last few 2011. “It’s the whole combination, or “Tis is an industrial lamp that weeks regarding interview requests, mix I think, that makes it all human.” you would buy for, like, your garage,” waiting for all of the media attention Calderwood also relied on his Mr. Calderwood said. “Tis is of-the- surrounding Calderwood to settle background in vintage clothes sales shelf from a company called McMas- down. Skif is planning a follow up to work with distressed, overlooked ter-Carr, and I just love it. It works. It’s story for early 2014 focusing on the materials that could be purchased to solid and it’s not fussy.” new properties and how Ace Hotel is furnish the hotel for next to nothing. And there, in a lamp, you have the adapting its business/design models “He saw what you could do with essence of Ace aesthetics. It’s not just for the global stage.
85 Marketing Organizations
86 Preferred Hotel Group Lindsey Ueberroth
Photo courtesy Preferred Hotel Group
Preferred Hotel Group was for specifc customer bases includ- Autograph Collection in 2010 Hilton formed in 1968 by twelve ing Preferred Family, Preferred Golf Worldwide launched the Curio Collec- North American hoteliers and Preferred Pride. Te group also tion in June 2014. launched a loyalty program, a frst for Skif recently spoke to Preferred as a referral organization independent hotels, in 2013. Hotel Group Lindsey Ueberroth about for hotels. It went through a Preferred Hotel Group and similar the allure of independent hotels, global expansion phase as well organizations Leading Hotels of the changing consumer habits, global as several changes, including World and Small Luxury Hotels of the expansion, and increased competition a shift from a non-proft to World are unique from hotel chains from chain brands. An edited version like Marriott International or Hilton of the interview can be found below. for-proft corporation, before Worldwide for a number of factors coming under ownership of including ownership models, pay Skif: Can briefy tell us about Pre- the Ueberroth family. structures, and branding. ferred Hotel Group’s business model? Te group today comprises of Tese international chains; how- Lindsey Ueberroth: I will try to more than 650 independent hotels ever, are now investing in indepen- put it in the most simplifed terms. in more than 85 countries and ofers dent hotel collections of their own, What Preferred Hotel Group and the its members services including sales, driven by consumer demand for more brands underneath are set up to do is a marketing, revenue management, and boutique, local hospitality experiences. full-service turnkey provider of global reservations. Starwood launched the Luxury Col- sales, marketing, technology and dis- Within the collection, there are lection in 1998 through its acquisition tribution. Other consultative services several diferent collections created of Sheraton, Marriott launched the include having frequent fyer or loyalty 87 programs. Te most important part for centage of total revenue. ented and are now seeing that running us is having this overarching quality Skif: Has this changed at all? Has and owning an independent hotel has assurance program that allows con- the business model always been this a lot of viability. By partnering with sumers to understand that even though way or has it shifed in recent years? companies like Preferred, they can suc- these hotels are independently owned Ueberroth: Tis is really how the cessfully do that in a global landscape. and operated, they have an expectation model’s been set up in terms of fee Tis wasn’t always the case. Certain of quality in terms of services, product, structures. What has changed very markets like China, which were very and facilities. We don’t own or manage dramatically, especially on the reser- chain focused, now really like the inde- hotels but we provide all the services vation side of it, is the channels that pendent hotel market. All of a sudden a chain would without making them reservations are coming through. there’s demand for independent hotels. put a brand name on the side of the When my family bought this company Skif: Very interesting. Let’s talk a building. 11 years ago, the majority of business little bit about your customers. What’s Skif: What are the guidelines for came through global distribution the demographic of your customers the hotels that join Preferred Hotel systems, which is how travel agents and has that been changing at all in Group? book, and call centers. Te GDS is still recent years? Ueberroth: Tat really runs the strong but you’re seeing so much more Ueberroth: We’re lucky because we gamut. What’s so unique about the come through the mobile and all of the have a very broad demographic and space we’re in is, by nature of being electronic distribution channels. Tat’s that’s partially because we have fve independent, hotels are not bound by where you’re seeing a pretty major shif brands that cater to very diferent, what the traditional guidelines that a hard in addition to big metasearch sites like we like to call, lifestyle opportunities. fag chain would mandate. We don’t Kayak and Trivago, those meta that Our brands fall in the upper upscale to have a maximum or minimum number are then pushing through to our brand the high-end luxury. Demographically of rooms; it’s really based on brand website. It’s really more just a shif in you’re probably going to go from low standards that we’ve put in place. We where the business is originating for 30’s all the way up until the matures. have a quality assurance program and us. Tese travelers are very well educated, determine which brand the hotel goes Skif: Has the inventory of hotels seek an independent authentic hotel into based on three or four factors that you work with changed at all in experience, and spend more time including, destination, location within recent years? looking for that experience. Tey’re not the destination, and the facilities and Ueberroth: It’s changed dramatical- as focused on wanting or needing the services that the physical property pro- ly. Te number of hotels has more than consistency that chains push upon you. vide. Tese criteria help us determine doubled, from under 300 to more than Tey’re more adventurous. of the portfolio brands that the hotel 650, in the last 10 years. People like to make fun of them, would be best suited and ultimately I will put it into the context that but the millennials are defnitely a allows the consumer to fnd the perfect the company has more than doubled driving force behind this because they hotel for their travel needs. in the last 10 years in terms of number love to be online and do a lot of re- Skif: What are the fees do hotels of hotels. From under 300 to over 650. search and this segment really appeals pay to be a part of Preferred Hotel We add 80 to 100 hotels on average, to them. We’re seeing a lot of growth in Group? but certain areas of the world have had that area and then they’re infuencing Ueberroth: Tere are really two pretty signifcant growth. Asia, India the boomer and the older generations types of fees. Tere are annual fxed and China are obviously big growth Skif: What are your largest source fees, which are really brand fees for all areas, but we’re also starting to see a markets? the sales, marketing, and distribution lot of growth in the Middle East and Ueberroth: Te United States is the support that we provide hotels. Each Northeastern Africa. largest followed by the UK, Canada, brand has its own set of fees and it’s in Geographically it’s defnitely shifed Germany and Australia all in the top part based on the number of rooms. as well in terms of growth. fve. Tere are also transaction fees for Skif: Is this driven by the changing Skif: What about marketing? How reservations. demand of your customers? have your marketing channels changed Tis is a good point of clarifcation Ueberroth: I think about this two and which is the most important of how we operate versus the chains ways. First, I think that consumers are today? and is probably true of other brands traveling further away than they used Ueberroth: Obviously we’re spend- like ourselves. We have what we refer to, which is being driven by trends like ing a lot more energy on marketing to as a pay for performance model. multi-gen travel and boomers who through electronic and social media Hotels only pay us for reservations that now have time and money to spend. channels because that’s where a lot come through our channels and they But what’s really happening is that of people are doing their research. only pay on room revenue, which is there are certain markets that in the Tere’s been a shif; there used to be a unlike chains where they pay a per- past had been predominately chain ori- much larger spend on traditional print
88 media. really want. ther that or just any changes that you’re We’re also spending a lot more time Independent hotels are by nature noting int he guest experience at these talking about experiences versus desti- authentic to a destination and pro- independent hotels that’s driving this nations or physical hotels. Some people vide an experience that is so diferent demand. still say, “I want to go to London,” from what you can get at a lot of chain Ueberroth: As I said before, they but we’re fnding a lot more travelers properties. We think that there’s going have the ability to be much more nim- looking for a family trip, golf vacation to be a huge growth in desire and de- ble because they are an independent. or romantic getaway. We’re spending a mand for this type of hotel and travel At the same time that’s why they part- lot more time serving up experiential experience. Tat’s the beauty of being ner with organizations like Preferred. marketing that helps them get to the independent — you can be nimble and When you are one stand alone hotel, hotels that meet those criteria. It’s been change to meet consumer demands you really need the support. How do a shif in that perspective. and needs much more quickly than you leverage the knowledge that you Skif: As travelers gain awareness chains that have to make a chain-wide need to stay ahead of the curve? Tat’s of these independent hotels and expe- change. We’re able to react to what’s what we provide; a lot of consulting riential travel, do you see competition happening in the marketplace much and best practices and services that increase between yourself and similar more quickly. allow them to stay at the leading edge hotel marketing organizations? Skif: You talked a little bit about of these things. Ueberroth: Great question. I fnd the millennials and how they’re playing For example, we have these inspec- that we’re not necessarily competing a bigger role in Preferred’s business. In tions that take place where an inspec- with similar organizations as much as addition to marketing changes, what tor comes in, stays two nights, and we’re competing with the chains that else needs to be done to meet changes does an inspection on the hotel. Tis now want to get into the independent in guest expectations? serves a purpose, but we found what hotel space, brands like Marriott’s Ueberroth: Te one thing that was happening online with review sites Autograph Collection, Hilton’s Curio we’ve been pretty consistent on is that was more important. Collection or Starwood’s Luxury Col- we don’t want to ignore the millenni- We provided a tool that basically lection. Tat’s where we’re seeing an in- als. I’ll take our loyalty program as an aggravates the top 20 review sites in crease in new competition. I think the example. We launched a points based their market to give them real time, organizations have always compliment- loyalty program a year ago and were instantaneous feedback about what ed each other, but now you have much the frst global independent hotel customers are saying about not only larger international chains that have company to do this. We found that the their property but their competitive launched their own versions. Tat’s diference between a millennial and set. Tis is what’s allowing hotels to new competition that didn’t exist. a boomer is that boomers are much do a better job of responding to guest Skif: What are the challenges and more focused on recognition and value needs and demands. Really what you opportunities for a company like yours whereas millenials are more focused want to be able to do is manage that moving forward? on what’s in it for them right that sec- experience not only before they go Ueberroth: Te largest challenge ond. Tey want instant benefts. When there, but defnitely while they’re on is probably just an increase in the we launched our loyalty program, we property. Tey’re posting and review- competition from the chains. Tat’s wanted to cater to both: have instan- ing while they’re there. To be able to the newest one. I don’t see many taneous benefts to make millennials give the hotel a tool where they can challenges. Really there are a lot more happy but also provide ways for other actually respond, whether it’s a positive opportunities because I really look at demographics to get tiered status and or negative response, is incredibly this as the age of independence. Te recognition. We’re having to look at powerful. traveler now has access to so much all the diferent ways we communicate If a hotel sees somebody posting information. In the past, the chains and market and make sure that we talk pictures of celebrating a birthday on provided this comfort and consistency, to all audiences, not just ignore one. If their property then they can deliver a you knew wherever you went around you look at what we’re doing in social birthday cake or amenity to the room. the globe that it’d look almost exactly media, we’re obviously catering to a If a guest is having a bad experience the same and there was a comfort in diferent audience than maybe what or the bathroom is backed up then the that. Now, with the advent of all these we’re doing on other channels to cater hotel can fnd maintenance. Tose are diferent ways to search for hotels and to an older demographic. all things that we believe make the cus- look at reviews, the consumer not only Skif: What about independent tomer experience much more powerful has a great confdence in staying at hotels? Do you see that independent and memorable. We want to make sure independent hotels but that’s actually hotels are doing everything they need that we can give them those tools that what they’re looking for, what they to in order to stay relevant today? Ei- allow them to stay ahead of the curve.
89 Small Luxury Hotels Paul Kerr
Photo courtesy Small Luxury Hotels of the World
Small Luxury Hotels of the possible success, citing confdence in are marketed to all of those consumers. World is certainly global, as its his own brand and a growing number Te frst part of that is through the name would imply, but it’s not of independent hotels looking to align website. themselves with larger marketing Secondly, SLH markets to all travel really so small. organizations. agents under the code LX for luxury. Te hotel marketing consortium He also talks about the ever-grow- Te travel agents then know about that represents 520 small independent ho- ing importance of technology in deter- particular hotel in a particular destina- tels across more than 80 countries. Te mining the winners and losers, even in tion. Tat’s two of the main benefts as organization diferentiates its invento- a feld as human as hospitality. far as booking is concerned. Hotels can ry by keeping properties to less than An edited version of the interview also participate in marketing them- 50 rooms, maintaining a strong hold can be found below. selves and they can attend what we call in the Asia market, and consistently road shows where we introduce them tightening its inspection process and Skif: What are the benefts for to all the travel agents. qualifcations. an independent hotel that joins SLH? We also produce the Inspired Mag- Skif recently spoke to Small Luxu- Why would they pay a fee to be a part azine, which is printed twice a year and ry Hotels of the World CEO Paul Kerr of it? stays in all hotels. We’ll have a big an- about changes in the independent hotel Paul Kerr: Tey’re basically joining nual meeting in March where all of the market and big brands’ entrance into a brand. An individual hotel would hotels meet rather than attend regional the sector. fnd it very difcult to market itself or or local meetings. Tey get to belong to Kerr is an optimistic executive. get noticed in the international market. a organization of like-minded hoteliers While he openly admits that major SLH has a loyalty program of about where they can meet and network. hotel groups have potential in this 350,000 consumers, of which at least Tat’s a beneft. highly lucrative market, he says that he 10 percent or more are active depend- We also have a standard to keep up; isn’t worried about the impact of their ing on the month. Straight away, hotels therefore, anybody who books a Small 90 Luxury Hotel of the World knows that of email marketing using the club a certain extent, but there are defnitely the hotel is going to have been inspect- database. Tat’s probably our biggest competitors. Leading Hotels are virtu- ed every 18 months, soon to be every marketing efort. We also obviously ally exactly the same; they are looking year. Ten the hotel receives a 70-page do some pay-per-click advertising, but afer the independent hotel but it’s report telling them what’s right, what’s that’s very expensive, so the majority larger. Teir average room size is about wrong, or what the consumer feels. Te of our eforts are making sure that our 180 rooms. inspectors that we have are made up of website appears on the frst page of Relais & Châteaux’s main base real SLH consumers; people like bank- Google. Tat’s just pure search engine is in Europe and the average size of ers and lawyers who are already paying optimization marketing. We’ll also do their hotels is about 30 rooms. Tey for their own SLH experience. the odd campaign. are also very food oriented. We don’t Skif: What are the brand standards Skif: What are the largest source care too much about whether there is or guidelines for hotels to join the markets for Small Luxury Hotels? Has a Michelin Star. We feel like the hotel group? it evolved at all in recent years? should be more of a local experience Kerr: We’re small, luxury and Kerr: Te largest source markets because that’s why I think people go to independent hotels. Te average size for SLH are English-speaking coun- diferent countries, to experience local is about 50 rooms and actually going tries. I think you’ll fnd that’s the same situations. Not everybody can have a down now to about 46 rooms. Tey’re with every single group. Te largest Michelin Star restaurant. all independent; they can have two or market is the UK and United States fol- Preferred is very much Amer- three hotels in SLH but we don’t have lowed by Australia. Germany has crept ican-based. Tey have Preferred large groups. Tey’re also independent- in the last fve years, but other than Boutique and concentrate on larger ly owned. that it hasn’t really changed. We’ve seen hotels for their group business. Tat’s Skif: What are the most important tourism growth in Asia, but consumers really our competition. I can’t call marketing channels that you use and are mainly traveling within Asia. We Preferred competition as far as quality have those changed at all over the past have nearly 20 hotels in China. is concerned so I mainly focus, if I was few years? We started in Asia a very long time to focus on competition, on Leading Kerr: Twenty years ago, probably ago. My company Hill, Goodridge Hotels and Relais & Châteaux. 95 percent of bookings came through & Associates purchased the rights to Even Relais & Châteaux has a hard global distribution systems. Now we manage SLH in 1992, because it was time keeping up with the standards have a lot of hotels using SLH’s internal virtually bust. Tree years afer we because their hotels, by defnition, are booking engine and, of course, the saved SLH from fnancial disaster, we much more food orientated. It’s very website and Internet. merged with a company in Asia Pa- hard to make money on the food and We’re now taking about 50 percent cifc. We had a base of about 70 hotels beverage in the restaurant business. of bookings direct, 30 percent of that straight away in the Asian market, If you have a restaurant in the hotel, business through our website slh.com but quite a few of those weren’t good you don’t make much. It’s only when and about 20 percent via phone calls. enough for SLH so they parted from you can take the larger groups like Te other 50 percent comes through the company. Tere were probably only weddings when you start making some global distribution systems and travel about 20 of the original 70 hotels, but money. Of course, Relais & Châteaux agencies. Tat’s a big shif in the mar- we were able to grow remarkably in the Hotels can’t really cater to large groups ketplace. Asia market. because they’re very small hotels. Skif: What do you expect moving We have approximately 125 hotels Consequently, I don’t think Relais forward? Will booking move away in Asia today. If you add up the inven- & Châteaux properties are very proft- from global distribution systems even tory of our competitors, which are Re- able. If that’s the case then that explains more? lais & Châteaux and Leading Hotels of why their rooms aren’t so good. Kerr: I do because hotels overall the World, they still don’t have as many Skif: Has the competitive land- don’t want GDS bookings since they’re hotels as we do in the Asia market. We scape changed at all in the recent years expensive as far as they’re concerned. started much earlier than them. between these diferent brands? Commission rates are far more. A Skif: Let’s talk about competition. Kerr: It hasn’t changed in 20 years. normal travel agent booking will be Are you competing with Preferred Skif: Why has it stayed so similar? about 6 percent from SLH plus 8 to 10 Hotel Group or Leading Hotels of the Why have there been no new players in percent to the travel agent. An Internet World or Relais & Châteaux for both the market? booking is just 10 percent. hotel guests and independent hotel Kerr: Once a lot of the hotels are Skif: How are you marketing partners? getting benefts from an organization online? What about on the Internet? Kerr: Yes, I think we are. I never like Small Luxury Hotels of the World Are you using social media at all, or really look too much to the competi- or Leading Hotels, it is a major efort newsletters, or direct advertising? tion. I feel as though we’re doing pretty is to actually switch organizations. It’s Kerr: We do a large amount well in going in a diferent direction to made it difcult for a new player to
91 start in the business. drop their prices signifcantly. You have the small independent hotel, they will When I entered the market in 1991, to remember that SLH is a hotel orga- be able to survive and they will survive all SLH had was about 60 hotels; 30 nization so the hotels are happy with very well. Te costs will be low because from the UK and 30 from Western the prices that we charge. I don’t think the brand is massive and they have the America, basically California. It was the Autograph Collection and Curio key — they have really good technolo- very difcult for us in the frst stages are anywhere able to do what we do. gy, which costs a lot of money. of our existence. My staf now would Te reason that chains are get- We have 500 hotels, of which I never appreciate how difcult it was. I ting into it is because of the top-level think only 30 have two-way interfac- hear them say, “Oh, it’s difcult to get customer, the one who is prepared to es. It is vitally important to have the hotels in, blah, blah, blah.” Tey don’t pay a high average rate. Tat’s what minimum of two interfaces to survive even know half of it. It’s much, much we all want in the hotel business. Tat, in this market place. Te whole idea easier now because we have something and loyal guests so we don’t have great is that your property management to show, a track record of reservations. marketing fees like paying huge com- system is linked to your central res- We’re getting $150 million worth of mission rates to Expedia. Te customer ervation system, which is also linked reservations now. When I started, we that pays a high average rate doesn’t to your internet booking engine and were lucky to do $3 million spread stay in large hotels. your channel manager. Te big groups around all those hotels. He does business in large hotels, already have this technology, which It’s grown enormously as far as there’s not doubt about it, but he can be given to the small hotel. Te revenue is concerned. We’d like to do doesn’t stay there for leisure. Tey need owner is then going to get much more much better, but it’s still a signifcant to have smaller, independent proper- revenue from that brand than a hotel amount of revenue to a lot of the ties under their brand. group like ours that only have 30 hotels hotels. Skif: What do you think is driving on two interfaces. Our mission is to Skif: Do hotels every switch be- consumers’ interest in independent increase the number of hotels that have tween brands? hotels? two-way interfaces. Kerr: Tey do switch between Kerr: Consumers today aren’t go- Skif: What does their success brands. We have a lot of Relais & Châ- ing to be conned by anybody anymore. mean for you? If chains are successful teaux hotels and see Leading Hotels Twenty or 30 years ago, they didn’t at ofering small independent hotels, dropping towards SLH. Hotels do go to have a lot of information to make their will you organization no longer have Relais & Châteaux and quite ofen they choice of where to stay. Tey relied on a role? come back. I’d say 90 percent of hotels their travel agent to give them choices Kerr: It will be far more difcult stay with a brand. and the travel agent didn’t have a lot to enter the arena and the hotels will Skif: What about competition of information either. Now, of course, then have another option to look at. At from major hotel groups? Do Hilton’s there’s information all over the place the moment, an independent hotelier’s Curio Collection, Marriott’s Autograph that customers can easily and quickly options are really Relais & Châteaux, Collection or Starwood’s Luxury Col- get. Tey can get live video fromt a Preferred Hotels Group, and Small lection create competition as they enter property before they make a choice to Luxury Hotels of the World. the space? stay there. Skif: Are you concerned about the Kerr: It’s interesting, isn’t it? Isn’t it Many of these smaller hotels ofer future of your organization? fattering that they’re doing the same the same facilities as the larger groups, Kerr: No, I’m not concerned at thing that I’ve done for the last 20 but because of the size of the hotel, all because hotels themselves really years? they can ofer real, personal, authen- respect our brand as an independent Tey’re not really creating a lot of tic service. I think that’s the most organization itself. Te same goes for competition. Teir model is based on important thing — they can give real Leading Hotels and Relais & Châteaux. managing hotels; therefore, they try service. It’s not saying, “Hi. Have a nice All I am saying is that the hotels now to not only give them a brand but also day,” to everybody without knowing have a choice. Tere are also more and look at their management. We don’t their name. When you’re in a small more small, independent hotels being touch the management of a hotel. We hotel, you get to know the managers built. assume that they’re doing a good job and owners. Tere’s a very short line Every year for at least the last ten because we have inspections. between the owner who makes things years, we’ve had 60 or 70 new hotels Also, anybody can write a review happen and the customer. join the organization. Obviously, on our hotels if they’re a club member. Skif: How do you see the land- others have dropped out, but you have It’s not just TripAdvisor. We don’t nec- scape changing in the next fve to to remember there are 80,000 or so essarily believe in TripAdvisor, because ten years? How will competition independent hotels in Europe alone. you can’t really trust the review. increase? Am I really worried about it? Chains are going to fnd it difcult Kerr: As long as the chains can No, I’m not worried about it. Tere’s to get into the market place unless they actually deliver the brand promise of enough for everybody.
92 Relais & Châteaux Jean-François Ferret
Photo courtesy Relais & Châteaux
In the vast space between Hotels Group, all hotels in the Relais Collection in 1998 through its acquisi- independent hotels and & Châteaux’s collection must have a tion of Sheraton, Marriott launched the global hotel brands sit several restaurant component. However, not Autograph Collection in 2010 Hilton all restaurants must be connected to a Worldwide launched the Curio Collec- hospitality consortia and hotel. tion in June 2014. organizations that provide “Cuisine is really our specialty and Skif recently spoke to Ferret about some of the same marketing there is no competition around this. brand standards, curating a truly and promotional functions We have 328 Michelin Stars in our unique hospitality experience, chang- as large operators while family, which is really unmatched,” ing consumer habits, and increased CEO Jean-François Ferret explained in competition from chain brands. An remaining dedicated to the a recent interview with Skif. edited version of the interview can be unique characteristics of their Relais & Châteaux and similar found below. portfolio properties. organizations are unique from hotel One such organization is Relais & chains like Marriott International or Skif: Can you briefy describe Châteaux, a collection of 450 inde- Hilton Worldwide for a number of the business model behind Relais & pendent hotels and approximately 80 factors including ownership models, Châteaux? restaurants across 64 countries. Te pay structures, and branding. Tese Jean-François Ferret: Relais & organization was created in 1954 with international chains; however, are Châteaux is based on two diferent just eight properties in France. now investing in independent hotel resources: One comes from fees paid Te network is distinguished by its collections of their own, driven by by independent hoteliers and restau- strict culinary admission standards. consumer demand for more boutique, rateurs and the other comes from Unlike similar networks like Lead- local hospitality experiences. commercial localities, channels that we ing Hotels of the World or Preferred Starwood launched the Luxury provide to our properties. 93 Te fees are diferent depending we validate the reports by the quality ber that in most cases they become on whether it is a hotel or restaurant. department in Paris and, if it is a posi- friendly and are really treated as part of For the hotel, the fee depends on the tive application, the board of directors the family. number of rooms. A Relais & Châ- votes on it. Te celebration of the senses means teaux property of 30 rooms, which Te process is quite long because a lot of focus on details, a kind of is the average, will have an entrance we really want to target the best in choreography. With the art of feeling, fee of around €10,000 and annual fee terms of quality. Tis quality check we provide emotions and a journey for of about €20,000. For restaurants, it is just the beginning, a prerequisite. guests to discover certain pleasured. depends on turnover. If there is a large What we would love to fnd is a certain Tis DNA with the fve experienced restaurant of more than two million spirit, certain values and experiences. is key to our recruitment process. You guests, then there’s an entrance fee of Tis is what our inspectors try to fnd can be very good at quality, but if you €3,500 plus an annual fee of €800. For when they visit new applicants. don’t have those experiences then you smaller restaurants with under two A property cannot join Relais & cannot be part of the Relais & Châ- million turnover, there’s an entrance Châteaux if they don’t provide fve teaux family. fee of €2,000 and an annual fee of experience, which we call the taste of Skif: What are the most important €6,000. the land, the soul of the innkeeper, marketing channels that you use to- Tose fees have been frozen for the family spirit, the celebration of the day? Have they changed over the past roughly eight couple of years? years, taking into Ferret: We consideration the have three chan- economic situa- “Travelers, are a little bit fed up of nels including tion. For smaller digital, travel properties, we wakening in the morning and not agents and growth put caps on fees knowing where they are. I’m a big centers. Te most based on turnover. important channel We want to keep business traveler and I can tell you when is digital, which our properties, represents 60 especially small I wake up in a big chain hotel, everything percent of our properties, in the is the same. “ marketing, and family. We feel it’s we try to be very very important experiential with for us to keep our approach. We beautiful exclusive are working on properties in Relais & Châteaux. senses, and the awakening to the artist content and building a new website to We want to attract young talent, within. We need to feel this when we not only provide a booking channel young chefs, and try to discover the visit a Relais & Châteaux property. but also provide emotion and experi- talents of the future. Tis year we did Each property is deeply rooted in ence. something new and decreased fees the region with a specifc culture; we Skif: What about the demographic for small restaurants by 25 percent to should feel the spirit of the property of your primary customer? Who is lure young chefs to join the family. For when we visit a Relais & Châteaux your primary customer today and has them, it is a dream to be a part of the property. Tis is what we call the “taste that changed over the past couple of family and be close to Tomas Keller, of the land,” which is the frst expe- years? Daniel Boulud, all the big names. rience we need to fnd in a Relais & Ferret: We have around two Skif: Can you tell us about the Châteaux. Te “soul of the innkeeper” million customers. Te average age brand standards or guidelines for is also so important. We want to keep is around 48 years old, which is a hotels that can join the group? How do properties small because we need to decrease from fve years ago when it you decide if a hotel can join Relais & feel that soul. more than 50 years old. We’re see- Châteaux? Te third, our family spirit, is also ing the impact of markets like South Ferret: Te standards are very very key. Tere is a strong sense of fellow- America and Asia where clientele is high and very demanding, We have ten ship, we try to build memories between much younger than European or North inspectors that go around the world diferent properties. We call them our American clientele. Eighty-fve percent checking on new applicants. We have road to happiness, la route du bonheur of all business is leisure. Our guests a list of more than 300 criteria that we in French. Te family spirit is not only are very loyal; our repetition rate is be- go through and each inspector does a between members themselves but also tween 50 percent and 85 percent. Once report of at least ten pages. Aferwards between members and their guests. a guest has tried Relais & Châteaux, members also check applicants. Ten Our guests are so close to our mem- they really come back year afer year.
94 In terms of source market, 20 fnd them only at Relais & Châteaux. become more experiential. Tat’s what percent comes from North America So of course we are competing with the traveler wants for both leisure and and 20 percent from France. North Preferred and Small Luxury -- Leading business. America is leading the league as recent is for too large of a hotel -- but we are Skif: Do you think that it will as last year, but I’m convinced that truly diferent. continue? What do you think is going next year it will be the frst. UK is in Skif: Major hotel groups are enter- to happen in the future? Will all of hos- third followed by Asia-Pacifc with 10 ing the independent hotel space. For pitality go towards this independent percent. Ten you have all other source example, Hilton launched the Curio property? markets. Collection and Marriott has the Au- Ferret: Yes, the shif towards more Skif: You’re not just trying to at- tograph Collection. Do you see major experiential hospitality will continue. tract customers to stay in these hotels; hotel groups as competitors as they We like to maintain our diferentiation you’re also competing for the actual enter this space? by going even deep than what I have independent hotel partners. Ferret: We see that they are trying explained. Ferret: Yes and no. Yes, of course to enter the space with a much more We have introduced a brand new we are competing because labels like experiential approach and use smaller vision for Relais & Châteaux, which is Preferred or Small Luxury for indepen- hotels. Of course, it comes close to our more profound and intense. Presented dent hotel partners, but in reality they DNA, but it is not like Relais & Châ- in November, the new vision wants are not fully competitors because they teaux. Hilton’s or Marriott’s collection to provide something special with are not like us. Tey are diferent. Our does not provide our taste of the land the ambitious goal of making a better properties have an average of 28 to 30 or the soul of the innkeeper. When world through cuisine and hospitality. rooms, which is very small. Our guests guests come to our hotels, they are We feel that our guests will be more are 85 percent leisure. We, of course, usually welcomed by family. For exam- and more interested once they feel that are developing in cities but we are ple, one of our ryokans has been in the our hotels are committed to something much more located in the region and family for 500 years. Do you think that very important, to really making a bet- very much focused on cuisine. the art of welcoming that they provide ter world. Tere is everything around Cuisine is really our specialty and guests is the same that you could fnd durability and sustainability, but that’s there is no competition around this. in the Autograph Collection? Tat has clearly not enough. We have 328 Michelin Starts in our nothing to do with it. Tat’s why we want to go deeper family, which is really unmatched. If We see that the major brands are to preserve diversity, the worldwide you take all these criteria then you see trying to speak to smaller entities to heritage of produce and cuisine, which that we don’t have real competitors that provide more experience, which is is key in a more human world, a world provide the same kind of experience. good. Tis is a market trend, some that provides richness in terms of Skif: Would you say that you’re with high quality and places like palac- experiences, especially for this younger not competing with Preferred Hotel es but this is not the spirit of Relais & generation. We also focus a lot on ed- Group, Leading Hotels of the World, or Châteaux. We keep the diference. ucation. We feel that our chefs have so Small Luxury Hotels of the World? Skif: What do you think is driving many things to share with students and Ferret: In front of some clients, yes, traveler’s demand for these more inde- trainees. We like the spirit of crafs- but for clients who know the DNA of pendent, personalized experiences at manship; the spirit of helping young Relais & Châteaux we are in a diferent these independent hotels? people to learn, increase their skills, league because we are providing an Ferret: Travelers, both on leisure and promote it throughout the world experience that none of the other labels and business, are a little bit fed up by focusing on the kind of journeys can provide. I’ve explained to you the of wakening in the morning and not between our diferent properties. average room of 28. Te other ones are knowing where they are. I’m a big busi- Our guests are waiting for us to much, much bigger. Tey are focused ness traveler and I can tell you when commit to something that goes much on creating image. Tere is no equiv- I wake up in a big chain hotel, every- further than the standard experience, alent, and the experiences I have ex- thing is the same. Tokyo is the same as further than sustainability. It’s really to plained to you - taste of the lands, soul New York, which is the same as Rio, make a better world through every- of the innkeeper, family spirit - you and it’s boring. Te trend is really to thing that we do in Relais & Châteaux.
95 The Leading Hotels of the World Ted Teng
Photo courtesy The Leading Hotels of the World
The Leading Hotels of the independent hotel collection, changing have other members in the hotel. We World is one of the largest consumer habits and behavior, market- look for a whole host of things before a luxury hospitality collections ing trends, and increased competition member is admitted. from chain brands. An edited version Skif: What fees do the hotels pay? worldwide with more than of the interview can be found below. Do you take a percentage out of the 430 hotels and resorts in transactions? more than 80 countries. The Skif: What are the brand standards Teng: We used to have a fxed company was founded in 1928 for independent hotels interested in membership fee and then a reservation with 38 member hotels across joining the Leading Hotels? fee, roughly generating 60 percent of Ted Teng: We certainly have our our fees from membership and 40 per- Europe, Egypt and Israel. standards, but we don’t use an ap- cent from transactions. We are now in What started as a reservations proach where they all have to be the the process of completely eliminating service for independent hotels has same. We have 850 standards that we all transaction fees and creating a new evolved into a full-service organiza- provide to our hotels and what we try model that really gets back to the spirit tion that includes sales, marketing, to do is get them to achieve at least 85 of collaboration. fnancial services, and inspections. Te percent of those standards. Skif: What sparked this change? company remains 100 percent owned Tey’re standards not of sameness, Teng: Two things, really internal by its members, putting it somewhere but of the right quality. We look for and the external. Transaction fees have between a cooperative and company a lot of other things beyond just the sometimes unintended consequences with services for hire. quality part of it: architecture, histo- of unproductive behavior. Also, the Skif recently spoke to Leading ry, who’s the owner, who operates it, marketplace, when it comes to distri- Hotels president and CEO Ted Teng what’s the market, whether we can bution, has changed. We want to really about the business model behind the support the hotel, and whether we diferentiate ourselves from other 96 transactional models. that diference? about creating something just for My expectation is that Leading Teng: We don’t have a lot of what one particular person in a particular truly becomes an extension of the hotel I would call tourists; we have a lot of instance. I see the mass categorization sales and marketing infrastructure. travelers. Customers who travel to based on nationality, gender, purpose We’re really looking to collaborate discover, learn, expand and grow. It’s a of travel, age and all that, but there’s a and help hotels generate business. much deeper engagement. Teir travel lot more diversity within each catego- We’re shifing away from a culture in itinerary tends to be more complex rization. which we have to be the watchdog over and they tend to be more self-driven I know China, as an outbound hotels. We want to have members who than buying a package tour; therefore, market, is getting bigger for everyone are truly committed to a high level of they want to talk to somebody to make and we’re seeing that. Some compa- quality and service. Rather than be an sure all the details are correct. nies have a term called “China ready.” afer-the-fact inspection, we have put We see some family travel where I think that is absolutely 180 degrees ourselves in the position of helping our diferent family members are coming away from personalization. Tat’s hotels appropriate happy guests. Tat’s from diferent parts of the world. Te treating Chinese travelers as if they’re a major shif in the way the company itinerary is more complex and usually all the same; therefore, if we give them has operated. includes multiple destinations. Tey these things then they will be happy. Skif: Let’s talk about booking and tend to travel far, which means time- You’ll never see “China ready” at marketing channels for a moment. zone and language diferences are also Leading Hotels, because a big part of What have been some of the changes more complicated for these travelers. why people come to us is to discover that you’ve seen around booking chan- Skif: What are your largest source the local authentic culture that our nels and where customers are booking markets? Have you seen any changes hotels are known for. We don’t want to your independent hotels? in demographics over the past couple change the product. What we want to Teng: For our hotels, there are of years? see is “global ready” so that we are able obviously several sources of booking. Teng: Te number one market, to present ourselves in an authentic Tere’s certainly direct with custom- globally, is the United States. About 40 way to travelers regardless of where ers calling the hotel or booking on its percent of our global revenue is gen- they’re coming from. At the end of the website. Tere are also the bookings erated there. Te UK is number two, day, I’m not thinking about the mass through Leading, whether it is via but number three is always the most chain brand market. I think that that a phone call or global distribution interesting spot to watch. For the last makes sense for them, but for us it’s system or the Internet. Ten there are two years, it has been France. Tat’s always going to be individually taken a lot of intermediaries including brick- surprising to most people, but France care of. We always present the product and-mortar type companies. Tere has always been a big destination for in a very authentic way so that people are various channels and it seems to us. Before that, Brazil was number can learn about the culture. be very diferent from destination to three for three years. Before that, it was Skif: What about competition? destination as well as source market to Germany. Te number three spot is How has the competition changed, or source market. the one that seems to change, and it’s has it increased at all with the other Skif: Could you elaborate on some an indication of some of the economic types of groups that do what you do, of those diferences, please? changes. whether it’s preferred hotel group or Teng: In some of the European Skif: Have you seen any other small luxury hotels of the world? Is countries, wholesalers are still a big changes whether it’s the age of guests, there competition increasing in this component. Wholesalers are the ones how long they’re traveling, or the kinds space? that go and negotiate with suppli- of travelers that book through Lead- Teng: Tere’s certain competition ers and their carriers; they produce ing? and I used to think of answering that packages to sell to retail travel agents. Teng: Tat’s more of an evolution. question by saying there’s three or four Tat’s a segment that is not nearly as Right now our core business is flled levels of competition. One is the com- big in the U.S. as it is in Europe. In the very much by baby boomers, but petition for afliation, in which case United States, online travel agencies we are seeing younger and younger Preferred, Small Luxury, and even Four are the biggest share of the market. In travelers becoming our customers. We Seasons are the competitors. various countries in Europe, there is really try not to categorize our custom- Afer that, there are three levels of an adoption of online travel agencies ers. I see a lot of conversations about consumer-facing competition. One is as well. For our business, which is personalization, but I think a lot of the when a consumer hasn’t decided as to probably somewhat diferent than a lot personalization conversations are real- where to travel and we help our hotels of other companies, voice reservations ly more about categorizing -- basically compete at the destination. Once a do constitute about 20 percent to 25 grouping people together and then consumer has decided where they want percent of our business. treating them in a certain way. to go, then we help our hotels compete Skif: What do you think is driving I think personalization is really against other local hotels. When a con-
97 sumer has chosen a hotel, we compete ful has now become the Achilles heel. most important part of social media is as to how they book the reservation. Consumers are getting mass brand what your customers are saying about However, we have recently really fatigue. you, not what you’re saying about shifed that thinking. Rather than look- People used to carry logo acces- yourself. All of us have a lot to learn in ing at who do we compete against, we sories as a statement of who they are. terms of how to accomplish that. It’s are really focused on who we compete Tere are still lots of people doing that, the old word-of-mouth. How do you for so it is completely focused on the but many others are now more inter- get customers to talk about you? target customer rather than what our ested in the consumption for them- Historically luxury hoteliers would competitors are doing. We want to gain selves rather than making a statement produce great service and product and tremendous insight into our consum- to others. the consumer would come in and be ers as to what they want, what makes Te chains are now saying that impressed and all that. Tat’s changed a them happy, and how do we deliver on they’re not cookie cutters, that their lot. Today there’s a lot more collabora- that. hotels are all very diferent, but there’s tion and co-creation with the custom- Skif: What about these big brands? very little credibility with consumers er. To me, there are two challenges in Companies like Hilton, and Hyatt, and because for the longest time chain guest service as a result. One is that Marriott are also getting interested in brands had been saying, “Come stay hoteliers have to learn how to service the independent hotel space, launching with us because we’re consistent.” Now guests from the guests rather than say- collections like Autograph or Curio, a portion of their company is focusing ing, “Here’s my standard and if I have during which they are creating these into the independent. standard then I have quality. Terefore, collections of independent hotels and I think that’s just a lot of public you should be happy.” We have to look people can book through them to kind company pressure. Arne Sorenson has at each guest and say, “What is going to of gain access. Is that a concern for been quoted saying that he wants to ac- make them happy at that instant?” you? quire or grow a brand every year. Tat’s Te second part, I think, is not Teng: Not really. Curio was just how Marriott is going to grow, because being practiced today. It’s helping our recently launched and I don’t think most of the market is already saturat- guests learn how to get the most out they’re going to be in the luxury space. ed with Courtyards and the diferent of their stay. Tat’s a very, very subtle Autograph Collection was launched a brands that they have. Te way to grow approach. I think we have a lot of couple of years ago, and they are clear- the company is to keep adding brands, opportunities to educate the guests to ly not in the luxury space. I was with and an independently branded hotel is really enjoy our hospitality to the most. Starwood’s Luxury Collection back in a market that they see has potential for Skif: What do you think is driving the 1990s when it was created and we them. this demand for independent hotels? do compete with that. We’re very diferent. We’re a single Travelers are looking for more of these Mass chain brands want to be segment, a single brand, a single pur- experiences. Tey want to access this many things to many people and it pose company. We don’t do anything type of stay. Do you have any insights really works for them. If you look at else. Tat’s all that we do, and we want into kind of what’s driving that? brands, there are mass-market brands to be the best at it. Teng: When quality is a concern, and there are intimate brands. Tere Skif: How have your marketing chain brands and their consistency are brands which excite and there channels changed over the past few provide assurance. When quality is are brands that reduce risk. Both are years? Which are the most important no longer a concern, people want to important. I see the mass brands as today? discover and learn new things. the ones that really reduce risk. Tere’s Teng: Marketing, as far as commu- I always look at it this way. When nothing exciting about staying at a nication in travel, has changed signif- we don’t have much, we want what Marriott, but there’s certainly some- cantly in the last fve to ten years. I’ve other people have. When we have thing safe and consistent about it. seen a signifcant decline in the print pretty much everything we need, we Tat’s not who we are. Our story is advertising, even though I think it’s want things that no one else has. Part about discovery and about being difer- still important, and most people have of it is also the social media phenom- ent, local and authentic. We work very gone to a digital approach. ena. Someone posts, “I stayed at the hard to be an intimate brand rather Marketing is all about storytelling. Four Seasons last night,” and someone than a mass-market brand. It’s not a I think that customers, with social things, “Great, I was there for months statement of which is better, it’s just media, are telling the stories today. Our ago.” What’s special about that? With they’re very diferent. What’s interest- brands can no longer think that they bragging rights on social media, some- ing though is seeing the mass-market have control over how they tell the sto- one wants to feel like they discovered a brands migrating towards the individ- ry. I see a lot of companies in the social place that no one in their social circle uality of hotels. For a long time they media space with their brand Facebook even knows about. Tey want to be in have been very successful, and I think page and tweets and all that. Tat’s fne. the know. It’s about discovery and being a bit of what has made them success- Tat’s a component of it. I think the on the leading edge of knowing.
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