Merchandise or branded hotels
Hotels linked to a particular brand or merchandise are starting to spring up in affluent cities around the world, which suggests that the UK – particularly London – will not be far behind.
The idea behind hotels linking up with merchandising or designer brands is that the product is diversified to maximise the use of a particular brand and its followers.
For example, Versace has launched its Palazzo Versace hotel brand in Australia’s Gold Coast and in Dubai. Armani Hotels & Resorts are currently present in Dubai and Milan, while Bulgari has hotels in collaboration with The Ritz-Carlton in Milan and Bali, with a site in London’s Knightsbridge expected to open in spring 2012.
Other branded hotels include the chain of Buddha-Bar Hotels across Europe, the Middle East and South America, which bring features of the well-known Buddha-Bar concept to the accommodation market, including a “contemporary Asian” interior design and characteristic musical selections.
Buddha-Bar hotels are currently present in Prague and Budapest, with sites expected to open in Paris in 2012, Panama and Sal Hasheesh, Egypt, in 2013, Mexico in 2014 and Abu Dhabi in 2015.
The Hard Rock Hotel is another example of brands expanding into the hotel arena, this time linking entertainment and casinos with accommodation.
Hard Rock Hotels are currently present in Chicago, Hollywood, Las Vegas, Biloxi, Tampa, Orlando, San Diego, Macau, Singapore, Penang, Pattaya, Bali, and Punta Cana. More hotels are planned for Panama in December 2011, Hungary in 2012, and Dubai and Abu Dhabi in 2013.
“The concept is simple really,” said Govinda Singh, managing consultant at business consultancy PKF, which specialises in the hotel sector.
“It’s all about brand power, awareness of that brand and the business it attracts. These hotels will resonate very well in any city that has an attraction to a certain level of affluence – as long as they have prime locations.
“Currently there’s no hotel in the UK that can say it has its own design or music label, but London is a key market worldwide, and anyone who wants to develop a brand will definitely be looking at London.”
Extended-stay hotels have only just started making their way over here, but their success in the United States suggests it’s another format to keep on the radar.
The high number of business travellers in the US has contributed to a surge in demand for long-stay suites, which are more spacious than regular hotel rooms and usually include a separate bedroom as well as a living area and a small, fully-equipped kitchen.
Currently, extended hotels comprise between 7.2 and 9 per cent of the US branded hotel room market, based on data from The Highland Group and Smith Travel Research. The data also suggests growth of between 2 and 4 per cent over the two-year period from 2007-2009, indicating more room for growth.
Robert Barnard, a partner at PKF, says the concept of extended stay hotels is still in its infancy in the UK, but is likely to pick up.
“It won’t suit every destination, but it will suit major metropolitan cities,” he says. “This is especially successful in a business travel environment, because when people have to spend several weeks away from home they want a hotel to be more homely, and this has to come along with the required tools.”
The extended-stay brands already present in the UK include IHG’s Staybridge Suites, which has two sites up and running in Newcastle and Liverpool, and another two in the pipeline for Edinburgh and London Stratford. Marriott’s Executive Apartments also have two sites in Edinburgh and West India Quay, London.
The international services residence group Ascott also operates six long-stay hotels in London under its brands Citadines Apart’hotels, Ascott The Residence, and St Marks. Frasers, another international extended-stay group, also operates 10 properties in London, Glasgow and Edinburgh.
Budget boutique hotels
Another trend to keep your eyes on is the concept of ‘affordable’ boutique hotels.
Both the budget sector and the boutique sector are growing – albeit at different ends of the spectrum – suggesting there is room for the development of a mid-way concept that marries the two.
US-based luxury hotel group Thompson Hotels said it has already identified several properties that it plans to convert into its new, “affordable” boutique brand in 2012.
“We think the biggest area for growth is the generation XY (late teens to young middle-age),” said Jason Pomeranc, owner of Thompson Hotels.
“It’s about re-inventing how young people can travel today at an affordable price – be it for business or leisure. It’s been something that’s challenged the industry, and they’ve experimented a little bit and we’re starting to see some movement into that direction.
“There are different requirements and thoughts for that age demographic. It’s not just about price point, it has to do with technology, it’s eco-friendly, it’s using your head and coming up with a product that they can appreciate long-term.
“And ultimately, these guests would transition once their demographic or their financial situation changes, and hopefully they become upwardly mobile into one of your other brands. It’s almost like we’re cultivating an audience at a younger age.”
Other teachings that UK hoteliers can take from the international industry include a different approach to the basics of hospitality.
For example, the culture of service is entirely different in some international markets, such as the United States as well as several regions in the Far East, including Japan, Hong Kong, Shanghai and Bangkok, as compared to the UK – and there’s no doubt who does it better.
With the UK’s hospitality welcome being a major area identified for improvement, hoteliers here should be lapping up lessons from their international peers.
“They’ve excelled in service in so many ways in the US and in Asia. But in the UK service is regarded as being servile,” said Michael O’Dwyer of hotel concept development consultancy HGS Partnership.
“Whether you call it false or genuine, there is a concept of service over there that’s different – people just do things for you, and one of the motivating factors is financial. The customer pays for good service with phenomenal tips, and staff work harder at providing good service because they know they’ll be getting those tips.”
“But we’re still struggling over here and it’s partly because of the confusion surrounding tips and partly because of the low wages. The result is a huge turnover of staff, with service standards suffering.
“If that culture doesn’t enter the hotel business here, we’re not going to move on. We’re just going to keep turning over staff,” said O’Dwyer, who was the opening general manager of London’s Marriott County Hall and the opening managing director of The Grove resort near Watford.
Other hospitality basics that the hotel industry here still needs to get right include eliminating noise pollution from rooms – be this noise from the street or the internal humming of old buildings.
The issue, which is huge when it comes to offering five-star service, has already been nailed in international hotel markets – where hotels are often housed in more modern buildings, or where more advanced insulation technology has been used.
Last week, BigHospitality looked at what the UK’s restaurant industry can learn from abroad, while next week we’ll be examining pubs and bars. All articles in this feature can be accessed here.