Luxury Travel, Lifestyle and Marketing Trends

New Hotel Revenue Models

the surf office

 

First it was business meetings that moved to Starbuck’s away from breakfasts at hotel restaurants or inking deals in a hotel lobby lounge. Then it was inroom movies, supplanted by laptops with streaming video or DVDs. And what about the legendary “power lunch”? As was reported recently in the New York Times, many millennials are skipping lunch for “crumbs on the keyboard”, viewing it as a waste of time.

What’s a hotel to do? Certainly the “Grab n’Go” concept manages to capture some revenue, provide a service, and appeal to a Starbucks budget and time-strapped business executives. In entertainment. Oz Eleonara,chief revenue officer for interactive content and connectivity provider Sonifi Solutions said there’s a greater movement in hospitality to combine entertainment, information and service to create new scenarios for digital interaction between hotels and guests.” In other words, turn a negative – movement away from current inroom entertainment models — to a positive – enabling hotels to connect with guests via technology. But, in the same article in Hotel Management, Scott Hansen, Director of Guest Technology for Marriott International said the company is looking it as a service and not a main revenue driver.

And now we’re seeing the beginning of the traditional hotel business/resort model under fire by offshoots of co-working spaces. In exotic locations worldwide, the countryside near urban centers, and beach destinations, properties are cropping up that offer communal work spaces, accommodations, and the opportunity to network, have fun and instant companionship.

What need does this address? Liz Elam founder of Link Coworking and executive producer of the Global Coworking Unconference said ,”More young people want work-life balance and maybe vacations completely unconnected are not feasible anymore; maybe people won’t take traditional vacations. But they can go to work in paradise for two months.” New centers described in the New York Times’ “A Desk in Paradise” have cropped up in Gran Canaria (The Surf Office), Turkey, and towns driving distance from Paris and Berlin. Right now they’re small in number and rooms and limited in facilities, but the appeal, especially to the Millennials is strong. They’re truly a new breed of “lifestyle” hotels.

The opportunity is there to expand the formula with new locations, more facilities, and ultimately, an upscale version of the concept. Let’s see who gets there first.

What Millennials Want: Live Branding Case Study

Amherst College

Amherst College

The always innovative Frits Van Paasschen, CEO of Starwood Hotels and Resorts, commissioned a study of marketing and branding trends with students at Amherst College. The target market was young adults. The “Live Branding Case Study” was a first for Amherst, his alma mater, and a first for Starwood who has only worked with hospitality schools in the past. Among the questions were “What are your generation’s biggest concerns?”” How will these influence your purchasing behavior”, and “What three initiatives would you commission if you were Starwood’s CEO”?

Survey results revealed that millennials put a premium on businesses that embrace technology and environmental sustainability along with social responsibility in general. This smartphone bred generation wants more from hotel mobile apps, like being able to order room service even while on the plane with a touch of a button, or being able to network with other travelers. The students encouraged hotels to look beyond the onsite facilities to events like in house art galleries, concerts, book clubs and meetings. And what is probably no surprise, the importance of design as an end in ltself, part of the experience.

The insights are valuable but I think what’s most interesting is the idea of going to a liberal arts college to do what they billed as a “Live Branding Case Study”. As described by the editor in an article in Amherst College’s magazine, Van Paasschen wanted to leverage the interdisciplinary nature of a liberal arts education and students’ interests ranging from fashion, real estate and finance to media and contemporary art. The Starwood CEO  said this will be the first of other similar studies, and I’m sure many other hotel companies will follow their lead. Interested in reading more about millennials and marketing? Check out our Luxury Travel and Lifestyle Trends newsletters.