Industry Update
Opinion Article16 June 2020

Retail And Hospitality Convergence

Hotels and retail companies are finally realizing that they have a lot in common. It’s time for hotels to harness that potential.

By Youri Sawerschel, Founder of Creative Supply & Brand Strategist

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Hospitality retail was once little more than a lobby corner shop and some display windows. But in recent years, hotels have started to see the marketing and revenue potential retail presents. When it launched in 2006, the Hoxton Hotel London's front desk, which doubles as a retail counter, was a pioneer. Since then, brands like 25hours and W Hotels have gone to great lengths to integrate retail into their value proposition.

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An increasing number of new real estate developments are bringing retail and hospitality closer together. It makes sense. Both activities aim to optimise revenue per square meter and offer an immersive customer experience. The lavish reopening of La Samaritaine in Paris by the LVMH group in 2020 features a department store operated by duty-free specialist DFS alongside a Cheval Blanc hotel, thus making full use of the available space. And existing hotels are not waiting on the sidelines: Italy's iconic Pellicano hotel group partnered with luxury e-tailer MATCHESFASHION in the summer of 2019 to provide a pop-up store aboard a 1930s yacht, servicing the group's three Italian properties and offering an exciting experience to their guests.

"Hotels have started to see the marketing and revenue potential retail presents."

Many retail companies have actually ventured into the hotel business in an effort to contextualise their products and engage their customers in a less transactional, more meaningful way. Within the past two decades, fashion and jewellery brands Armani, Fendi and Bulgari have all opened hotels, as have home decor companies Muji and Maisons du Monde. Hoteliers, however, have been slow to do the opposite. Compared to these concepts with strong individual identities, chains like Westin and Hilton are missing an opportunity to assert who they are, and create a full brand universe.

"Retail companies use hotels to contextualise their offering and engage their customers in a less transactional way."

As customer expectations towards hotels evolve, the traditional model in which rooms create revenue and facilities serve as support is fading. And whilst hotels will continue to rely on their rooms as their main revenue source, a thoughtful retail strategy can help drive the overall perceived value of a hotel — and offer a welcomed additional revenue stream.

About EHL Group

EHL Group encompasses a portfolio of specialised business units that deliver hospitality management education and innovation worldwide. Headquartered in Lausanne, Switzerland, the Group includes:

EHL Ecole hôtelière de Lausanne is an ambassador for traditional Swiss hospitality and has been a pioneer in hospitality education since 1893 with over 25,000 alumni worldwide and over 120 nationalities. EHL is the world's first hospitality management school that provides undergraduate and graduate programs at its campuses in Lausanne, Singapore and Chur-Passugg, as well as online learning solutions. The University of Applied Sciences is ranked n°1 by QS World University Rankings by subject and CEOWORLD Magazine, and its gastronomic restaurant is the world's only educational establishment to hold a Michelin Star.

EHL Swiss School of Tourism and Hospitality has been one of the leading hospitality management colleges for hotel specialists for 50 years. The College delivers Swiss-accredited federal diplomas of vocational education and training and of higher education in its 19th century spa-hotel in Chur-Passugg, Graubünden, to Swiss and international students from 20 countries.

EHL Advisory Services is the largest Swiss hospitality advisory company specialising in service culture implementation, business consulting, as well as the development and quality assurance of learning centres. EHL Advisory Services has offices in Lausanne, Beijing, Shanghai and New Delhi and has delivered mandates in more than 60 countries over the past 40 years.

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