A new day in hospitality has arrived, one where big league players such as Hilton, Hyatt and Marriott are using words such as “artisanal” to describe their offerings. That’s because beyond decent service and a clean bed, the millennial guest is driving the proliferation of a new hotel offering: the very experience of travel itself.
Blame the new sharing economies where Airbnb has taken a bite out of the traditional hotel business — or perhaps the rise of independent, boutique hotels that grant visitors an intimate look into trendy neighbourhoods or historic locations. It simply can’t be denied — the hospitality landscape is changing, with a creative turn towards showcasing urban neighbourhoods.
Lifestyle brands, in a sense, highlight the obvious: no two neighbourhoods are the same, therefore, why should any two hotels deliver the exact same menu, design and services? The value of lifestyle-oriented properties is derived from highlighting what’s unique about a destination.
“Hotel brands have been seeing success with one-of-a-kind boutique hotels evident in every market,” explains Brian Stanford, senior managing director at PKF Consulting Inc., a CBRE Company. “These are smaller properties that have dining and food-and-beverage as key features of their stay. They address that consumer desire for something different than the big-box branded hotel.”
Stanford notes that in an effort to meet this guest demand, larger brands have been creating their own franchised version of the boutique experience, though the growth of lifestyle-oriented properties is still in its infancy in Canada. According to PKF research, in 2014 the 12 self-identified lifestyle hotels in the Canadian market posted an average RevPAR of $86.92. Taking into consideration current market trends and an increase in the development of lifestyle-oriented properties, RevPAR is projected to reach $101.30 in 2016.
“Alt by Le Germain, from a physical product perspective, is the largest lifestyle brand in Canada and by next year, they will account for about seven properties, including one in Winnipeg, Montreal and downtown Ottawa,” says Stanford. “But when we measure it on scale with other segments, it’s undeniably small for the time being.”
Nevertheless, the core deliverables of this product are similar across the board, says Stanford, including “local integration on the menu of [food] grown in that particular region, art tied into the local art scene and experiences tied to the downtown cores of each urban environment.”
That’s certainly the case with Canopy by Hilton, which is slated to enter key urban sites within the next few years — starting with a unit in Toronto by Easton’s Group of Hotels. Corey Mitchell, senior director of Development, Collection and Lifestyle Brands at Hilton Worldwide explains the concept that will generate rates of $120 to $190 per night. “Canopy is really about tapping into key urban neighbourhoods and the new experiences — culinary, artistic and so on — that they have to offer.” They’re also maximizing the potential of the easiest, and cheapest, means to advertise these experiences through the ever-pervasive use of social media.
Most recently, Canopy opened its first hotel in Reykjavik and kicked off a social media campaign, #MeetTheNeighbors to draw attention to its surroundings. “It’s a curated program that showcases interviews with people who live or work within walking distance of the hotel,” says Mitchell.
Within Canada, Starwood’s Aloft brand is targeting a similar demographic. “This is a consumer that prizes access over ownership,” explains Brian McGuinness, global brand leader, Specialty Select Brands for Stamford, Conn.-based Starwood Hotels & Resorts, which is set to be acquired by Marriott. “[It’s] what we call a democratization of service and different experiences and it’s driving a change in the way we design and operate our hotels.”
Like Canopy, Aloft finds the pulse of the local culture and delivers that to the consumer, whether it’s a locally inspired cocktail or an acoustic performance by a local band in the lounge. “Because so many people travel alone, it’s also really important for us that the lobbies, lounges and other public spaces have a vibrancy to them, so guests and locals will feel as if they are part of a vibrant social scene, with a sense of familiarity. In short, we are catering to the lifestyle needs of our guests,” he adds.
Hotel brands are looking towards adding lifestyle properties to their stable, says Marriott International’s Toni Stoeckl, VP of Lifestyle Brands. “One option that bigger brands have is the ability to purchase an already-existing hotel; say, for example, one in an urban centre that already has a strong customer base,” he says. “So Marriott may purchase a hotel that has its own brand presence, which can be great. But it’s also a win-win for the customer, who can take advantage of Marriott’s rewards programs.”
Marriott’s Renaissance brand — soon to pop up inside a refurbished post office in Montreal — delivers on local experiences. “We have what we call ‘navigators’ or ‘lifestyle concierges,’ who connect guests to the cool part of the city,” explains Stoeckl. “These are people who will guide you to those restaurants, museums or bars you just wouldn’t find with a tour guide.”
Though many of their lifestyle properties are still in the development phase, there’s a significant number of projects coming down the pipeline. With the acquisition of AC Hotels, Marriott has imported the European brand to Chicago, Miami, Kansas City, and Washington D.C. with more on the way. There are 92 AC Hotels in development, including one slated for Montreal.
The emphasis on design will attract more snaps and posts on Instagram, Facebook and Twitter, translating to direct and free advertising for the hotel. “It’s no secret that we want to be part of that social media conversation where people are taking pictures of their food or their one-of-a-kind cocktail and are posting it on Instagram or Pinterest,” says Stoeckl. “But to be inspired to do that, there needs to be a cool story to tell.”
Meanwhile, a less expensive, but design-forward Marriott lifestyle brand being developed in tandem with AC is Moxy. Stoeckl says that this brand, while more affordable, features smaller rooms (just 183 square feet) outfitted in what he calls “industrial-chic design built for the young-at-heart guest who values access to everything but doesn’t necessarily think he or she needs to own it.”
Unlike AC’s more sophisticated decor, which takes its inspiration from Italian fashion houses, Moxy’s industrial feel will showcase raw finishes, concrete floors, exposed or reclaimed wood and brickwork. “This is Marriott’s attempt to target a consumer in his or her early career, who doesn’t want to sacrifice style just because they may have a lower budget,” he explains.
While lifestyle properties bring a fresh new take on travel, Stanford says the emerging category has its own set of challenges. “The truth is that when you look at Canada specifically, there just aren’t a lot of markets for this brand to expand into,” he notes. “Once you have covered downtown Toronto, Montreal, Vancouver, Ottawa and the other top eight or nine markets, there’s nowhere really to go. Would this make sense, for example, in downtown North Bay?”
While it’s a great product, the opportunities within Canada aren’t even close to those in the U.S. or Europe, in fact, for at least the next 100 years, he adds. “That’s really this product’s biggest constraint — the small number of dense, urban locations in Canada.” Of course, there is still the rural “lifestyle” segment to be explored.
Written By: Jennifer Febbraro
Volume 27, Number 8