Remember a year ago when you couldn’t read a single industry story without tripping over the word “millennial” four or five times? Now the millennial craze has morphed into the “lifestyle” buzz and I for one am already tired of it. I think it’s time to heed a little caution.
Here’s what happened in a nutshell: Research hit a fever pitch that showed the emerging millennial generation’s spending power, both now and in the future. Global brands and companies geeked over this information and all of a sudden everything was about millennials: What do they want to eat, where do they want to stay, how do they want to spend money? And how can we give it to them first and in turn make them love us best?
This rush to appeal to millennials turned into a valuable lesson learned, as companies saw that lo and behold, all millennials are in fact not the same; and, more importantly, the travel behaviors that are hot right now aren’t necessarily restricted to the millennial age group.
Out of this, the branded lifestyle hotel segment as we know it today was born. Mind you, I said the branded lifestyle segment “as we know it today." Hotels that appeal to different travelers’ specific lifestyles have existed since the dawn of lodging. The first roadside motels appealed to the vacationing generation of families. The first full-service conference hotels appealed to business travelers of both genders who wanted a safe, predictable experience without having to go out the front door. Early adopter brands like Hotel Indigo, Hyatt Place and Aloft were among the first to dip their toes into these waters with significant results, and recently we’ve seen an absolute tidal wave of new brands in this space: Vib by Best Western International, Canopy by Hilton, Hotel RL from Red Lion Hotels Corp. and Pendry Hotels from Montage Hotels & Resorts.
Why so many so fast, and what’s going to happen?
Here’s my take: Yes, we know that consumer travel habits are changing and the elements that characterize this so-called “lifestyle” segment are greatly appealing. These are going to be fun hotels with great amenities and services that guests love, along with a good value proposition for developers.
But the real danger here for hotel franchisors is homogenization. If Lifestyle Brand A looks just like Lifestyle Brand B and describes itself the same way, then it’s a lot more difficult for guests to choose a winner. Every franchisor wants the loyalty of this emerging group of travelers, this millennial-minded consumer, this person who may not already be loyal to any given hotel brand. The companies that will win the race are the ones who have clearly defined positioning from the start that they can communicate to developers and use to gain critical mass before the next downturn hits.
In other words, there’s not a lot of time to waste. Look at what happened when the boutique hotel craze began: A few years in, consumers had no idea what “boutique” really meant, and hotels of all kinds were sharing that umbrella, from unique four-star inns to independent two-star motels with dirty sheets that thought they could command ADR with the word “boutique” attached to their name. Big mistake. Customers got burned and the true boutique hotels had to work to regain cache.
So don’t use that word “lifestyle” as a crutch or as an umbrella. Invest the time and resources to ensure these next-generation brands have value on their own merit. Don’t try to simply ride the “lifestyle” wave. That word will start to lose its meaning and you will risk losing the loyalty of this very valuable group of travelers you’re trying to attract.