Redefining Luxury: The Next Big Disruption in Hotels?
By Dean Minett, Director and Founder of Minett Consulting
Innovation is all about challenging the established order to make something new - which is why creative mavericks, at some point in their lives, can often find themselves on the wrong side of the law. The impulse to bend rules, and in some cases break them, can be taken too far when it isn't held in check by experience and wisdom.
Suffice to say, lessons were learned. When the two business partners were set free, they started putting their unique talents into hotels. Their first offering, Morgans Hotel, is widely celebrated as the world's first boutique property. It showed us that style and sophistication could be affordable. It introduced the hotel lobby as a social gathering place - a concept for which millennials are often given credit.
In 2018, Schrager's impulse to disrupt the hotel industry has gained fresh relevance. The Public Hotel New York, a 367-room property in lower Manhattan, opened its doors in June of last year. Speaking with Fortune Magazine, Schrager describes the hotel as a democratisation of luxury. With rates around USD $200 per night, the hotel aims to deliver a heretofore unprecedented marriage between luxury and economy.
Think of it this way: If a guest pays $500 or $1000 per night, he or she expects luxury at every turn - from service and style to food and beverage. But if the experience of luxury can be delivered for a moderate sum in New York City, guests will be amazed. Their expectations will be surpassed. This is what Schrager hopes to achieve - a disruption of how we see luxury.
Plenty of people in the industry say it can't be done. There are reasons, they remind us, why luxury cannot be delivered at this price point. Schrager insists that it can be done - namely by asking the right questions. Do people want scripted interactions with nervous and stuffy employees? Do they want their luggage hauled up the steps for cash tips? Do white linen and fine China really embody a modern experience of luxury, or can better experiences be delivered in more efficient ways?
All of this may sound like a lot of standard issue "millennial" talk, and the assumption will be made that Schrager's new project is a nod to millennials (or just a carefully crafted marketing exervise). After all, there is a co-working space in the lobby. There is an entertainment venue in the basement. Limited service models are frequently associated with this age group.
But, in Schrager's words, "building a hotel for millennials is the most stupid idea I've ever heard in my life." Like many innovators, he feels that great ideas are not limited to a single demographic. They work for everyone. As shown throughout history, great ideas just make sense.
So why does skepticism abound? Why is it that successful disruptions in the hotel industry are initially dismissed by those who should have their finger on the pulse?
The answer is simple: Successful disruptions have a way of turning into fixed concepts. This is why so many of the best hotel innovations seem obvious in hindsight. This why so many hotel groups are busy creating their own socially focused hospitality models. Meanwhile, an old-school innovator is quietly updating old ideas of luxury. Who would have thought it was possible?
Time will tell whether the Public Hotel NYC - and its challenge to the established framework - is worthy of wide scale imitation. Either way, the co-creator of Studio 54 has proven that new disruptions to the hospitality industry are necessary and vital in the post-AirBnb age.
raduating first from William Angliss Institute in 1982, Dean took on his first General Management role at the age of 22. Since then, he has worked in, managed or consulted to hotels, motels, resorts, restaurants and casinos across Australia and Asia.More from Dean Minett