The Lifestyle Explosion

The Buccini/Pollin Group

Hilton’s Canopy focuses on the local neighborhood

National Report – The latest of the so-called lifestyle hotel brands to make its debut, Canopy by Hilton was designed to maximize the local experience of “front-and-center destination neighborhoods,” according to Jim Holthouser, EVP of global brands for Hilton Worldwide.

The Buccini/Pollin Group will develop the Canopy Portland in the Pearl District and the Canopy Rockville Pike & Rose in Maryland, near Washington, D.C.

The Buccini/Pollin Group will develop the Canopy Portland in the Pearl District and the Canopy Rockville Pike & Rose in Maryland, near Washington, D.C.

In addition to celebrating the local, Canopy also is built around what the company calls “more included value,” which translates to free basic Wi-Fi, complimentary breakfast incorporating local items, a local welcome gift and an evening tasting service that showcases local beer, wine or spirits.

The company launched the full-service, upper-upscale Canopy with 11 signed deals at press time for new-build locations in Portland, Ore.; London; Miami; Washington, D.C.; San Diego; Nashville; Savannah, Ga.; Indianapolis; Charlotte; Oklahoma City and Ithaca, N.Y. Holthouser said Hilton expects the first Canopy properties to open in 2015, and most likely those will be through yet-to-be-announced conversion projects.

“The common denominator for every one of these is a destination neighborhood,” he told Hotel Management. “This brand is not for suburbs, malls or airports; this brand is inside front-and-center, destination neighborhoods.”

LOCAL FLAVOR

That neighborhood-centric touchstone will direct each hotel’s specific design and local flavor, though of course certain brand-standard items will be seen everywhere, Holthouser said. At check-in, guests will receive a small “welcome to the neighborhood” gift, as Holthouser described it. Local microbrew, wine and liquor tastings in the evening will drive sales to the bar and activity in the social spaces.

Public space in Canopy hotels will feature lots of windows and gathering spaces.

Public space in Canopy hotels will feature lots of windows and gathering spaces.

One common element in the guestroom is a wall-mounted TV with a corkboard for staff to inform guests about local happenings. “We’ll be able to tell guests if there’s a farmer’s market happening on Saturday, or an art gallery opening, a new restaurant or anything like that,” Holthouser said.

The concept is full-service, though guests will receive a complimentary breakfast, which Holthouser described as being “something between a Continental breakfast and the full spread you get at Embassy Suites.”

“It will be fewer items served informally, with healthier options and smaller portions,” he said.

Food will be available for purchase and the setup will be similar to Hilton’s Herb N’ Kitchen concept, where guests can purchase fresh food to go or to eat in common areas. A full bar, where available, is also in the plan.

While Canopy isn’t intended to be a large meeting hotel, Holthouser said the company is suggesting around 3,000 square feet of meeting space in new-builds.

Since growth globally will be through conversion and historic renovation in addition to new-build, Holthouser said there really is no set prototype. Interior design, however, is a strong part of the Canopy story. New York-based designer Mark Zeff was instrumental in creating Canopy’s design materials and Holthouser said he likely will design the first handful of properties.

TECHNOLOGY AND AUDIENCE

Hilton Worldwide President and CEO Christopher Nassetta said part of the company’s goals with creating Canopy were to “identify the need to take the emphasis off of capital-intensive design and deliver exactly what the target consumer desires.”

The planned Canopy by Hilton in San Diego is slated for a site at the northwest corner of 7th and Island avenues, adjacent to the Gaslamp Quarter. The developer will be J Street Hospitality.

The planned Canopy by Hilton in San Diego is slated for a site at the northwest corner of 7th and Island avenues, adjacent to the Gaslamp Quarter. The developer will be J Street Hospitality.

Part of achieving that capital-light approach will come through technology, Holthouser said. “We think Canopy will command [strong] average daily rate and you do that by programming a very efficient labor model,” he said. “This will be the first brand to start with straight-to-room check-in. We won’t have a traditional front desk but more of a hospitality station. This allows us to save on people; you don’t need two to three people checking guests in. You can have one person on check-in.”

Hilton’s systemwide mobile check-in, check-out and room selection service is in the roll-out process at all properties worldwide.

As for the targeted Canopy guest, Holthouser is quick to point out it’s not all about millennials.

“We think about customer mindset,” he said. “Look at what millennials like—good design, social spaces, technology—50-year-old travelers like that too. As a brander, it’s dangerous to build products around any certain age; it just doesn’t make good business sense.”

Does he foresee any potential overlap with Hilton’s other new brand launched this year, the Curio collection of soft-branded hotels? Not really. “With Curio you have a much greater variety in terms of locations than with Canopy,” he said, citing resort locations. “Curios are independent and Canopy is a hard brand—there will be elements programmed from location to location even though there is that latitude to bring in local flavor.”

He pointed out that Canopy is defined by much more than the so-called lifestyle segment. “Across our portfolio, every brand is introducing lifestyle elements,” he said. “You’re seeing elements of lifestyle and better design appear in every brand, but a lifestyle hotel, like Canopy, has everything—great location, great design, energetic social space and a really good room.”

The most important element of Canopy is the location, Holthouser emphasized. “If you don’t get the location right, you can’t bring Canopy alive,” he said.

HISTORY

It can’t be forgotten that Hilton made an attempt at launching a lifestyle brand back in 2009, with its Denizen Hotels concept. Intellectual property and personnel disputes with former Hilton and Starwood Hotels & Resorts Worldwide brand executives led to a lawsuit, and the brand vaporized. 

Denizen Hotels was designed to incorporate some elements of local design and feel into what company leadership at the time called “smart, not necessarily just cool or hip.”

Best Western’s Vib combines value with style

Toronto – Best Western International has several brand initiatives under way that it announced at its annual convention last month—a new lifestyle brand, a soft brand and the opening phase of its extended-stay brand. Hotel Management caught up with Best Western executives at the conference for details on these projects, each of which addresses growing traveler segments the brand is targeting.

Best Western is one of the latest to announce its new prototype for the growing “boutique lifestyle” segment, called Vīb (pronounced “vibe”).

“It’s evident the boutique lifestyle hotel trend is not a fad, and in many ways it’s the future of our industry,” Best Western President and CEO David Kong said. “Our brand has enjoyed a long relationship with baby boomers and now we must think of how we’ll appeal to the next generation without compromising. We’re known to be a value brand—we can also be stylish.”

Best Western International President and CEO David Kong shared details about Best Western’s new brands and other company developments at its annual convention in October.

Best Western International President and CEO David Kong shared details about Best Western’s new brands and other company developments at its annual convention in October.

The concept is definitely intended to appeal to the next generation of travelers, though executives were quick to point out that all age groups will be interested. Some amenities that will be included are automated check-in, bluetooth connectivity, a virtual concierge, green and energy-efficient features, state-of-the-art fitness centers and a large, boldly designed lobby that centers around several different zones for communal gathering.

“The lobby is designed to be a vibrant and dynamic gathering space,” Kong said. Other communal elements will include grab-and-go food and drink options and high-end vending—think electronic and tech gear available via vending machines.

Guestrooms will be less than 200 square feet and will include dual-flush toilets, an LED-lit shower, hooks, storage space and a workspace that serves dual function as a headboard. The brand also is designed to include technology amenities like dual USB and standard outlets and smart TVs that allow guests to bring their own content and devices and hook them up seamlessly.

While no deals were signed at press time, Best Western SVP of brand marketing Ron Pohl said that he thinks the brand’s style and cost-to-build efficiency will attract both current Best Western developers and those new to the company.

He said that the goal with Vīb, which will also be available for international development, is to gain presence in major gateway markets, and also in markets like Seattle, Portland, Ore., Austin and Dallas.

While conversion opportunities will be available down the road, Pohl said he envisions most will be new-builds, particularly in the beginning as the company seeks to establish the brand.

Another first for Vīb is that it’s designed around revenue generation—and that means no free breakfast. “We built this around areas that can create and generate profit,” Pohl said. “We’ll have high-end coffee, breakfast and other food available for purchase a la carte, and we’ll have a bar.

“Food and bar are highly profitable areas for hotels if done right,” he said.

Best Western’s Vīb concept is designed around a large communal lobby and smaller guestrooms. Best Western executives say the model is one of revenue generation—breakfast will be sold, grab-and-go food options will be available and bars will contribute additional revenue.

Best Western’s Vīb concept is designed around a large communal lobby and smaller guestrooms. Best Western executives say the model is one of revenue generation—breakfast will be sold, grab-and-go food options will be available and bars will contribute additional revenue.

Kong compared the design of the brand—which has a completely new exterior as well—to the West Elm home goods retail brand and the European Motel One brand. “We want this concept to have broad appeal,” he said. “It’s not just for millennials, but also for Gen X and baby boomers. It’s inexpensive to build and cost-effective to operate, yet highly stylish.”

According to Kong, the communal lobby is the brand’s differentiator. “This concept of big lobbies and smaller guestrooms is the future of our industry because it’s very cost-effective to build and cost-efficient to run,” he said. “People are captivated by the lobby. This concept would not work without that lobby; you can only get away with a smaller guestroom if people are spending time in the lobby.”

Kong admitted the concept isn’t brand-new to the industry, but he said Best Western’s take on it is a holistic one: “We are looking at every touch point for how the product affects the guest at every step,” he said.

BW PREMIER COLLECTION, EXECUTIVE RESIDENCES

The company’s new soft brand, BW Premier Collection, will consist of carefully selected hotels in primary markets that will be required to maintain a TripAdvisor rating of four or above and AAA/CAA rating of Three Diamond or above, according to the company.

Best Western International SVP of brand marketing Ron Pohl told members in attendance that 2015 will be a big year for the company’s expansion and portfolio renovation plans.

Best Western International SVP of brand marketing Ron Pohl told members in attendance that 2015 will be a big year for the company’s expansion and portfolio renovation plans.

Hotels within the collection will not be part of Best Western membership, but they will be listed on bestwestern.com for booking. Guests will be able to earn and redeem Best Western Rewards points at all BW Premier Collection hotels. BW Premier Collection hotels will also have the option of purchasing additional Best Western brand services such as design and sales support.

Another distinction will be the royalty model—or lack thereof. “Most other brands charge a 4- to 6-percent royalty fee [for soft brands],” Kong said. “We envision ours to be more of a commission model. We want to replicate the OTA model but we won’t be an OTA—we only get paid when the hotel is booked.”

He said BW Premier Collection will solve the problem of independent hotels being over-reliant on OTAs.

“We have talked to a lot of those hoteliers who want to rely less on OTAs,” he said. “There’s a void in the marketplace—we can drive a lot of traffic to our website and just create a tremendous business model.”

Also in the works: Best Western Plus Executive Residency, the company’s upper midscale extended-stay prototype. The concept has been in development for several years and Pohl said the first is under construction now, in Alberta, Canada, with a projected opening date happening before year’s end. Three others are in the pipeline—notably two in Texas to serve the oil-production region.

He said the company forecasts average daily rate to run in the $95-$100 range.

The company also is redesigning new-construction prototypes for Best Western and Best Western Plus hotels, which Pohl said “will be architecturally enhanced on the exterior and have contemporary lobbies, communal elements and improved technology.”

Other goals for the company include the roll out of its new revenue-management tool, BestREV, and plans to improve service at hotels by focusing on the arrival experience, staff interaction, breakfast and the departure experience.

“We recognize that travelers’ preferences are evolving and it’s our job to keep up. The launch of Vīb and the BW Premier Collection represents a major move by our brand to meet the growing and shifting needs of our customers and travelers in general,” Kong said. “These two initiatives will allow us to reach a new customer base and developer audiences, while still maintaining the unmatched value and customer care that everyone has come to expect from Best Western.”

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