It's not the game of Life – it's more a game of cultivating potential – and who wouldn't want to play when profitability in the mid-scale hotel market is the prize? Learn to win at "money in the middle" by reimagining the huge possibilities the mid-scale hospitality market presents for hotel companies willing to invest time, effort and finances in the segment.
How can hoteliers play the game? Understand what today's mid-segment travelers desire. Inject heavy doses of creativity and innovation into a smart, strategic game plan aimed at substantial growth and development. Think beyond the latest industry trend – conceive of concepts for a long-term shelf-life.
Sometimes it's better not to be stuck on the outside – but instead carve out a solid place in the middle because there's a wealth of potential in this space. Here are five significant opportunities to be embraced by investing in the mid-scale market.
Opportunity 1: The "Field of Dreams" Principle – Build It and They Will Come
Shift your mindset of what you believe a mid-market traveler wants. The modern-day, mid-scale demographic craves the hip design and lifestyle focus appeal of the boutique hotel experience. So, why keep it exclusive to the upscale segment? Boutique hotels can branch out from where they've lived in the luxury tier and build a firm strong-hold in a market that wants them. Best Western recognized the potential and last year they made their foray into the market with the launch of GLō℠ and Vīb® brands specifically targeted to this space.
Rates hovering between $80 and $90 per night keep to an attractive price point, especially when guests enjoy a value-oriented experience without sacrificing quality or service levels – and this applies to both leisure and business travelers. If hoteliers embrace the potential of the mid-scale space and fill the property gap, they (guests) will come.
Opportunity 2: Enjoy Reduced Construction Costs
Mid-scale properties tend to have a smaller footprint and less extensive facilities, meaning lower overall construction costs. The result – higher profit margins. The mid-scale space is also generally eyed as a less risky investment due to a lower cost basis, making this attractive to financiers.
Companies not interested in a new build can repurpose existing hotels with good bones and reduce construction costs. Apply the extra budget to the interior space to craft a boutique atmosphere.
Although construction costs will likely increase over time (for land and materials such as concrete and steel), continually evolving technology software (both architectural and design-wise) is driving enhanced construction efficiencies, and that's a bonus for mid-market properties.
Opportunity 3: Flex Creative Muscle with Room Design
Entering the mid-market with a boutique product affords the opportunity for innovative design in hotel rooms as well as the public spaces. "Dress" the mid-market hotel in the luxury boutique style and encompass local flavor while keeping costs at reasonable levels and ensuring service is impeccable.
Make a statement by curating spaces to be smartly engineered, cost-effective to build, and possessing a distinctive personality. Best Western's new GLō℠ brand is a good example of this execution. The company designed the adjacent guest room baths to be center-loaded, saving about 40-50 square feet in construction costs.
It's not always the size of the room that matters, but the character it embodies.
Opportunity 4: Grow Your Geography
Expand your reach by developing a boutique presence in secondary and tertiary markets. These markets – where hotel companies might once not have been able to move into with another product – are now ripe with mid-scale potential.
Lower barrier to entry costs and reduced labor charges in these markets appeal to the bottom line, allowing hotels to bolster their geographic maps.
Entering secondary and tertiary cities also helps raise the markets' profiles among leisure and business travelers and adds to the cycle of growth and development.
Opportunity 5: Capture Guests for Life
Give hotel guests what they want – especially amenities they expect – and that puts hotels on the road to likely retaining those guests for life. And, that applies across the board of pricing. Create a hotel world that speaks to guests' interests and resonates with them, and reap the rewards of long-term guest satisfaction and loyalty.
Mid-scale properties can make a huge impact here. Consider the issue of Wi-Fi. While Wi-Fi remains an extra charge at many luxury hotels, it is often included at a mid-market property. Featuring such an amenity presents a significant occasion for satisfying guest wants and building on this new age of mid-market, boutique brand styling. Even designing a hotel room with conveniently placed outlets and really good lighting (two sometimes overlooked but crucial in-room elements) tells a hotel guest "you get me," and that fosters repeat business.
The mid-scale hotel space is full of profit-yielding potential; plus, it offers hotel companies the opportunity to make a meaningful mark in the industry. When opportunity knocks – listen, re-imagine the possibilities, and be a trailblazer. It's the game plan for how hotels can triumph at "money in the middle."