Are Hotels Finished with Just Being Hotels?
By Dean Minett, Director and Founder of Minett Consulting
The crossover is a big deal these days. I'm not referring to the Australian Basketball Association, or its lesser-known American counterpart. I'm talking about businesses crossing over into unknown territory, expanding their identity into new products and services.
The trend is further illustrated by mergers and acquisitions, which slowed down after the 2008 financial crisis but have rebounded steadily (the value of global M&A transactions hit nearly AUD $6 trillion in 2015). Companies and corporations are blending products and services like never before. Executive boardrooms are looking for ways to expand their reach in world of accelerating connectivity.
The hotel industry is no exception of course, as evidenced by recent mega-mergers such as Marriott/Starwood (US $13b) and AccorHotels/Fairmont (US $2.7b). But marriages between global corporations are not as interesting as "crossovers" taking place within the walls of individual properties.
Accor Hotels happens to provide one of the clearest examples of what I'm talking about. In 2017, the company launched an app called AccorLocal, which aims to strengthen and vitalise the connection between hotels and the communities in which they operate. 50 years after they first started and they are still innovating.
The experiment has three important components. First, it allows individual hotel managers to decide which of the hotel's own services and amenities are available on the app (F&B, luggage storage, holding keys and packages, the use of private meeting rooms, and so on).
Second, it allows hotel managers to partner with local business owners (florists, rental car companies, drycleaners, restaurants) to integrate their services with the hotel. In other words, local businesses can lean on the hotel to provide a more convenient and customisable service. For example, a local dry-cleaner can deliver a suit to the hotel, allowing the customer to pick it up late at night.
Third, and most importantly, the app is freely available to you, whether or not you are a guest at the hotel. This highlights Accor's stated ambition: To make hotels useful to local populations. There are a whole lot of locals out there who don't need lodging, but may need something else.
This experiment is innovative, but like all good ideas, it is so simple you wonder why no one else did it before. Hotels are traditionally perceived as hushed, exclusive havens for out-of-towners. Don't get caught loitering unless you have a room key! Don't bother asking for help or services unless you're a registered guest!
Shattering this paradigm could prove to be a very intelligent move. If AirBnb is going to expose and perpetuate the demand for "living like a local," AccorLocal is a compelling response. It could give these hotels a patina of authenticity and community integration that has been critically lacking. Locals could benefit from conveniently located hotels that offer services to non-guests - but so could guests of the hotel.
On the other hand, opening up hotels to non-guests and local businesses could strain physical and human resources. As a paying guest, I might have to wait for ten locals to collect flowers and dry cleaning and chat with each other before I can check in or get answers to my questions.
It's hard to say how the guest experience could be affected by hotels seeking to execute this kind of crossover, or how booking rates and brand loyalty rise or fall as a result of non-guests who make use of a hotel's services. AccorLocal has been a pilot program in France up to this point, with a global rollout planned for 2018 and 2019. Will they slam-dunk the ball, or dribble it off their foot? Either way, it's a notable step in finding out what works.
Director - Minett Consulting