The hot topic at Hotel Management’s recent Executive Roundtable, sponsored by Sabre Hospitality Solutions, was “Curating Guest Experiences to Maximize Your Revenue Stream.” The event, held in April at the Omni Berkshire Place in New York City, brought together a varied group of hospitality leaders who examined how to mine the potential return on investment opportunities within a property’s physical plant while enhancing the “emotional” aspects of a guest stay.
The scope of what a hotel is expected to deliver as part of a guest experience has widened to the point where owners and operators, asset managers, even investors, consistently are searching for ways to enhance their properties with distinct offerings that will attract, capture and perhaps, most importantly, retain guest business. This has led to a subtle trend where hoteliers are taking a cue from their retail brethren, developing public space into a range of smaller, boutique settings that can be commercialized to draw revenue from in-house guests as well as the outside community.
From pop-up food-and-beverage experiences to renting space in the lobby and meeting rooms for local use to specializing in specific types of experiences like scaled weddings, live entertainment and cooking classes, hoteliers increasingly are invigorated by the square-foot potential for greater return on investment represented by such innovation and nontraditional thinking around how a hotel’s physical plant is used.
Which is not to say this type of thinking is new—consider the longstanding existence of spas and indoor swimming pools. Someone’s demands were met. The paradigm shift comes from operating in the current social-media-crazed environment where if you can’t Instagram it, it basically doesn’t exist, driving the industry to be much more focused on consumer preferences.
“Hoteliers, whether independent or even branded, have always wanted to be a part of their own community. But really of late is where they’ve started thinking more about: ‘How do I actually consciously do that … To be more than just a hotel for a hotel’s sake?’” said Michelle L. Woodley, president, Preferred Hotels & Resorts. “Asset managers are like: ‘I’ve got this much square space, square meters or square feet. What are we doing with every inch of the space that we have?’ A way to maximize that is to focus on the local market.”
“Omni identified its space 10 or 15 years ago,” said Andrew Rubinacci, SVP/revenue and distribution for Omni Hotels & Resorts. “We’ve been trying to develop local experiences in our hotels since that time. For example, the brand’s Louisville, Ky., asset, which opened last year, carries a distinct, but subtle, bourbon theme throughout the property, while its Atlanta property features “fireworks” chandeliers, a nod to the nearby baseball park, helping make both hotels “really relevant to a local experience and what’s going on in the marketplace.”
W. Chris Green, COO at Chesapeake Hospitality, acknowledged the industry is on board the curation train but may not be moving as fast as it could be. “I think our industry still does lag behind other industries in our ability to give consumers what they want. You can reserve a seat on a train or a plane but you still, in most cases, can’t reserve your [specific] hotel room. Why? We have the systems in place that I can book room 315. I should be able to book room 315. If I spend three minutes on the wellness page of somebody’s website, when I arrive at the hotel is somebody going to greet me with some sort of acknowledgement that I like to work out or that there’s a fitness center in the building or is there going to be juice in my room? We still don’t connect the dots fully with how we engage with some of our—let me call it ‘a la carte’ offerings.”
Green indicated Chesapeake has been successful in parlaying visits to its website via direct interfacing or at the property. “We certainly do everything we can to find out about our guests prior to arrival,” he said.
Sonesta Hotels’ VP/marketing and communications, Scott Weiler, agreed the industry is lagging others, but sees the curation landscape as more of a frontier for hospitality. “We’re behind some other industries that are more consumer-direct in nature,” he said. “And yet, we’re the ultimate one-to-one consumer-experience industry. We have them with us, they stay with us. They sleep with us. Their life is with us for 2.2 days or two months or two years. Our challenge is technology systems, but, more importantly, it’s the will and want and desire to take advantage of that which the guest is already telling us.”
Technology is Key
The majority of panelists felt technology was the key to unlocking the vast potential of the “terabytes of data coming in,” but exactly how and by whom remained perplexing.
“All that guest information and data is in the hands of the big brands and not necessarily in the hands of hotels,” said Ben Seidel, president/CEO of Real Hospitality Group, citing the franchise model many hotels operate under. “In some cases, we want it, to curate and better know our guests, and in some cases we don’t because of [payment card industry] liabilities.”
Rubinacci pointed out many of the megachains’ 30,000-foot views might not be in sync with property-level curation goals. “The big brands, they’re not hooked to operators. They’re brand-marketing companies. They don’t make money on any of the ancillary things that an asset manager cares about. So they’re not investing in those things because they just don’t make any money on it,” he contended, adding smaller companies could be more nimble in pushing relevant technology forward. “The shift is going to happen and it’s going to be interesting how the big brands react … they’re going to have to react because it’s what consumers want.”
Woodley felt this was a scenario where independents could shine. “They can do what they want. They want to go brand their own beer and make that a local event, they can do that. They don’t have to be asking a mothership somewhere, ‘Is it OK if we do that?’ The brands are trying to let go a little bit in places, but … the question comes back to this idea of mass experiences. All of the data will help us in the aggregate, which is really good and meaningful. But … the independent hotelier can actually see what’s going on in his or her local community and what is available to him or her. I think marrying these two things together is where the magic can really start to happen,” she said.
Several of the panelists acknowledged the major franchisors have one foot in bespoke waters with their soft-brand entrants; however, not all felt the offerings are as “authentic” or “curated” as they could be.
“I stayed at a massive chain last night. Their curation is homogenized; I don’t know how else to put it,” said Michael Tall, president/COO of Charlestowne Hotels. “They’re going to curate the big things because they’re at the world global headquarters figuring out everybody likes XXX, and Mr. Green likes X, so we’re going to curate that part. I think this is why the rise of the independents over the last 15 years has been so massive. Independents have done a good job of mixing the business side with the pleasure side, the experiential stay. Even for us heavy business travelers. If I’m in New York for a day, I would rather experience something exciting. Some of the big brands are just not going to be able to get there because they have to stay homogenized. So it’s going to be a very interesting time.”
John S. Hamilton, SVP/business development and acquisitions, Pyramid Hotel Group, saw some flexibility in both offering and monetizing a curated experience. “In some cases, you can do both,” he said. “You can curate the guest experience and you can also take advantage of the extra square feet. For instance, rooftop bars have become a huge phenomenon. Everybody wants one. In Boston, that’s not the best place to be in the middle of the winter [and] I wish I’d thought of this idea. On top of the Envoy, which we used to manage and then it was sold, the current management company put these big see-through igloos up there with heaters and there’s a little light, you pull the switch, and the server comes out and gets your order.
“In the middle of the winter, you have this same view and it maybe seats 10 people. They have eight of these different igloos up on top of that space that otherwise would not be utilized and it’s definitely a guest experience that people remember.”
Delivering on Promises
Drilling down all the guest preference data, including beyond a hotel stay, remains a goal, according to the panel.
“Until we can start aggregating all the data and using things like [internet protocol] mapping and understanding who our best guests are, and what they do when they’re not [with us], then applying it to their actual stay, I think we’re going to be behind. I think it’s a challenge that runs through our whole business, all the way through training and delivery of those products,” added Green. “With our turnover as an industry, stability of the operations and delivering these curated experiences in the short length of the stay is a huge challenge that we’re going to have to figure out if we’re going to be good at it.”
“You have to invest in technology,” said Tom Winrow, VP/product management, SynXis Enterprise Platform, Sabre Hospitality Solutions. “My experience has always been—and this is a quote from a friend of mine at a luxury chain who said, ‘A hotel will happily spend $10,000 for flowers in the lobby but won’t spend $1,000 on technology.’ How do we reconcile that? I feel like you have to solve the operational efforts with technology because if you, on one hand, create a glut of consumer choice that helps to curate that experience—I picked this particular room—then you’d better deliver because you increase your risk plane if you missed delivery on just this minor little thing.”
Working through these types of challenges to optimize the guest experience via technology is going to take a mindset reset, offered Shannon Knapp, interim CEO at The Leading Hotels of the World. “I think it requires a context shift in terms of how we think about putting these products, these services, these experiences forward,” she said.
“We historically as an industry are very focused on what we want to tell the consumer or what we want to sell. That’s where we really go wrong. We’ve been very product-centric in terms of what we want to deliver, what we want to monetize, what we want to sell as opposed to understanding what that guest experience should be for each individual guest. Until we as an industry make that shift, down to the operational level, we’re going to continue to lag behind.”