The trend in the hotel industry over the past 10 years has been strongly toward design and lifestyle concepts. Successful examples of this are the citizenM in Geneva and the Ruby Hotel in Zurich. These concepts focus on the expected future requirements of guests, specifically the desire for functionality, simplicity and technology-led solutions.
The MotelOne brand implemented the concept of “functionality meets design” in the 2000s and virtually co-founded a new niche of design-economy hotels. The success of design concepts with high functionality and a conscious reduction of services has been one of the biggest drivers in the hotel industry, of which the MotelOne in Basel, Switzerland, is an excellent example.
The challenge is the holistic consideration of design and functionality as the factor for return on investment on the life cycle of the property. It is important to keep in mind that every trend and design is subject to time and transience. There is a thin line between “fashionable” and “timeless,” which influences the renewal cycle of design and furniture, fixtures and equipment.
Ultimately, every design always aims to generate added value: for the guest because it promotes a desired lifestyle and atmosphere and for the hotelier by achieving a higher rate and greater loyalty from the guest, which has a positive effect on the ROI. That is the reason why design is not an end in itself but a clear factor to increase ROI.
Accelerating Change
The challenge for hotels is the life cycle of FF&E and design. While this used to be 12 to 15 years, it has been reduced to more like five to 10 years in recent years, and right now the question is whether this is still “state of the art” or whether there needs to be a return to certain values, materials and raw materials.
Shortages of raw materials, labor costs and supply chain bottlenecks will continue to accelerate this change in hotel design. Purchasing costs in 2021 were up about 40 percent from the previous year, while the price increase for wood and wood products was about 77 percent. However, there are also strong social and societal factors that influence the sustainability requirements of design and the increasingly important awareness of sustainability is one of the most important drivers here.
The approach favored in recent years of deconstructing existing buildings and replacing them with new constructions will change to developing and redesigning existing buildings. The ROI in the future will be based on preserving the fabric of a building as much as possible, and the design and positioning of the hotel will have to adapt and respond to this. This requires greater flexibility in the design and positioning of the hotel to renovate the hotel property in a sustainable manner. A good example of this is the Ameron Boutique Hotel in Zurich, which used the existing building as far as possible as a basis and backdrop for the new design and hotel brand. The surfaces were largely renovated and then “restaged” and accentuated to generate a completely new look and feel that still preserves the essence of the original.
The ROI of such a renovation depends on the optimized and fixed cost structure of the FF&E, as well as in the flexible use of existing areas in the hotel.
Holistic Approach
The principle of a hotel of the future lies in its holistic approach. The environmental, social and governance initiative obliges hotel companies to publish financial values along environmental, social and corporate governance criteria. For the renovation or conception of a hotel, a sustainable and holistic process must be obtained that takes all factors into account in addition to the usual structural, technical and commercial criteria.
In the future, successful and contemporary hotel design must fulfill and implement the requirements of sustainable design and ESG in order to be able to make a positive contribution to the ROI from the life cycle instead of simply wanting to be cool and hip. This requires flexible layouts, building structures and design that can be used both for the planned hotel use and, without massive intervention in the substance, for secondary uses.
The profit or ROI of the hotel property is therefore based on a flexible concept, the use of sustainable materials, the preservation and use of building substance and a design that takes these points into account as a whole.
Christian Buer is managing director of Horwath HTL Germany.