How Standard Hotels is taking on the OTAs and Airbnb

IHIF 2018

On the final day of the upcoming International Hotel Investment Forum, March 5-7 at the InterContinental Berlin, Amar Lalvani—CEO of Standard International (the parent company of Standard Hotels) as well as both Bunkhouse Group and One Night—will be on a panel with several other industry CEOs discussing the major trends and concepts that will impact hospitality developments and the guest experience in the coming years, including new lifestyle concepts and room and hotel design.

Ahead of IHIF, Lalvani talked about his company's growth—and how Standard is taking on the OTAs and Airbnb. 

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1. What hospitality trends and storylines will dominate discussion at IHIF and why?

Amar Lalvani
  • The continued growth of Airbnb and its impact on the hotel business—and travel, more broadly.
  • The ongoing distribution battles between the OTAs and the large hotel companies.
  • The rise of mobile distribution and changing guest behaviors, including shortened booking windows.
  • The abundance of new brands and the big players with massive brand portfolios and if and how they are truly differentiated.
  • The focus on experience-seeking by guests, and experience-creation by brands.

2. What are the markets/countries that you are looking at for future development and what makes them an attractive investment?

With the upcoming opening of Standard London, we are focused on expansion in the key European markets that fit The Standard culture, namely in Berlin, Paris and Milan. With our recent investment from Sansiri and the development potential in the region, we are extremely excited about Asia and are planning our first Standard by the sea in Phuket.

Somewhat closer to home, Mexico City is a market that we love socially, culturally, culinarily and artistically. We believe [this market] holds enormous commercial potential. We are in the early stages of what will be a landmark Standard property that will open us up to Latin America.

3. With so many brands in the marketplace, what makes them a success and are they differentiated enough in the market? Do both customers and developers understand the differences?

What makes a brand a success is not a unique name or a different graphic/design identity but a soul and a culture—a team that lives and breathes its values that then translates these values into experiences for guests in a way that no other brand could or would. Discerning customers and discerning developers absolutely understand the difference.

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4. What are the strategies hotels are employing now to boost revenue and curb costs?

On the revenue side, [we are using] experience-creation to drive pricing, giving a guest something that is worth more, both tangibly and emotionally beyond the product. It’s not easy to do, but when it works it is very powerful.

We’re also thinking of interesting ways to utilize available room capacity and public spaces. On the cost side, the focus is on curbing distribution/OTA commissions and, in developed markets, managing rapidly rising labor costs.

5. How has the role of new technology, home-sharing disruption and online travel agencies impacted your business?

OTAs are not new. The hotel companies have finally woken up to their grip on consumers and commoditization of the marketing and first point of entry. Most big chains have responded by seducing guests to book direct through perks—which makes OTA guests feel like second-class citizens. We do not believe this is the right approach. With initiatives like One Night, Standard Time, and Stowaway we have found ways to connect and resonate in alternative ways that serve a purpose and unaddressed need.

As it relates to home sharing, The Standard’s focus on culture, social spaces and entertainment serves us well. We can do something that Airbnb, with a distributed model, could never do. We bring people together.

6. What has been keeping you busy in the past year and what will you be focusing on in the year to come?

The opening of The Standard London is first and foremost. We are extremely excited about the neighborhood, building and what we are creating. It will be like nothing that exists in the city—or in Europe, for that matter. In addition to that, we are strengthening the company for future growth through our new partnership with Gaw Capital on The Standard High Line property and investment into our company by Sansiri—two great partners. And, of course, we’re continuing to innovate and push boundaries. Our One Night app is now in 14 markets, including London with over 170 of the most interesting hotels in the world.

The International Hotel Investment Forum is March 5-7, 2018, at the InterContinental Berlin. Find out more at ihif.com