Industry Update
Opinion Article 6 September 2021

Embracing Hotel ‘Lifestyle’ by Learning from Retail Brands

By Larry Mogelonsky, Managing Director Hotel Mogel Consulting Limited

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Yes, that retail sector – the one that has been all but obliterated by the pandemic. Even still, perhaps there’s one more drop of tutelage for hotel brands that can be squeezed from this lemon of an industry before every suburban mall is converted into a solar-powered vertical farm. Specifically, we predict that certain ‘lifestyle’ hotel brands will emerge in the coming decade to dominate the hospitality landscape because of how they mirror an experiential transition by retail brands.

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This morsel of instruction comes from how retail shops are adapting to the onslaught of online shopping by making their physical footprint more of a showcase and less of a place for transaction and inventory storage. With everything conveniently available from a customer’s home computer, transactional consumerism has found a better home in cyberspace while the on-the-ground storefronts are becoming more ‘high touch’ – dynamic, more spacious, sensorial, interactive and filled with knowledgeable staff.

As people release all that pent-up energy by venturing out again in the pandemic’s wake, hotels should not aim to be more experiential, but also strive to introduce elements of retail into hotels and the ability to ‘bring a piece’ of that property home in order to continue the relationship. In this sense, making a hotel a retail brand – whether it’s clothing, furniture, accessories or any other common form of merchandise – boils down to identity.

The pandemic may have temporarily arrested new hotel developed, but in the face of increasing customer hostility towards the staid, cookie-cutter flagged properties, we predict that the future looks bright for smaller, more meaningful brands to take charge. As companies start to incorporate more service and product differentiation into their overall customer experience framework, your hotel’s identity and its value proposition may be imperiled as guests opt for these flashier, niche brands.

As we’ve explored firsthand on behalf of a select few hotel clients as part of our asset management consulting duties, the paramount objective is still financial survivability. Identity works positively towards this over the long run. You need to imbue a sense of lifestyle – whether through the introduction of elements borrowed from retail or otherwise – to protect your property’s reputation and to continually build revenues ahead of market comps. Our hope is that you can be inspired by how a few intrepid retail brands have pivoted in the face of online and on-demand competitors.

Current Retail Crossover Examples
Some laudable examples of this trend include the aforementioned Shinola Hotel in Detriot which proudly reinforces the company’s status as a purveyor of contemporary, American-made sensibility; Atari Hotels with its first prime location in Las Vegas to play upon 1980s nostalgia; the 2015 opening of the Baccarat Hotel & Residences in Midtown Manhattan as a means of generating more North American awareness for the French crystal glassware manufacturer; the 2016 opening of the IKEA Hotel in southern Sweden built next door to the Ikea Museum; and the handful of Equinox Hotels launching to meet the demand for those who want to stay active while traveling.

Then think of the music-driven Hard Rock Hotels as a move to breathe new life into the kitschy restaurants around the world or Bulgari’s joint venture with Ritz-Carlton in the early aughts to amplify the prestige of its core jewelry and high-end fashion accessories. On the family front, LEGOLAND Hotels is continuing its rollout in the United States. And so renowned is the Nobu name that the celebrity chef behind these restaurants championing Japanese-Western fusion was able to establish Nobu Hotels in 2009 for which there are already a dozen properties, with a Nobu Residences set to open in our hometown of Toronto. All this shows that prestige of a cool hotel can indeed support a retail vertical.

What all these new retail entrants into the industry offer in various forms is the idea of ‘aspirational hospitality’ where guests can take a piece of their hotel visits home with them to reinforce their identities and lifestyles. Vacation properties can be fun, exciting and memorable while also giving you an idea of what the home life should be.

Trend Just Getting Started
What’s the future to bring if this cross-industry symbiosis continues on its current course? Some pie-in-the-sky ideas across a variety of industries include:

  • Ferrari Hotels for car enthusiasts with driving experiences and heaps of onsite memorabilia
  • Lindt Hotels for chocolate lovers offering a full program of pairing and cooking classes
  • Apple unveiling a ‘hospitality lab’ in Cupertino or downtown San Francisco where guests can stay in rooms with all the latest gadgets as well as test out some that have yet to be released
  • E & J Gallo starting a resort chain to immerse guests in its portfolio of wines through a variety of tastings and educational viniculture-themed activities
  • Patagonia launching its own glamping label where customers select from a global list of curated expeditions with all clothing, equipment and luxury yurts included
  • Lululemon deepening its sponsoring of yoga retreats by flagging its own wellness resorts
  • An international cosmetics company like L’Oréal, Clinique or Estée Lauder opening a series of chic and boutique properties in alpha-tier cities to cross-promote their full product lines with a plethora of in-room samples readily available

For us hoteliers – principally in the independent or boutique luxury segments – what you can learn from this ongoing development is that you must further entrench yourself in the local community, become more experiential and further define your unique identity.

The trend outlined here about corporations from other industries converging on hospitality as a means of brand extension is only just ramping up. To fight this, you must be exceptional in that what you offer is not only different from your competition, but it is congruent with the lifestyle your guests want to live. This is not an easy process at all and one that will take years to properly plan then execute!

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