The room isn’t large, but the furnishings are stylish and the bed comfortable with good quality linens. The petite bathroom features a high-end shower and plush towels. The hotel lobby is compact, but offers comfortable seating where guests can gather for a drink or coffee.
‘Less is more’ could be select-service hotels’ mantra. There will always be guests who want luxury without compromise — turn-down service with chocolate on the pillow; dry cleaning; minibar; spa with massage; an elegant dining room. But, the ongoing global economic recovery has taken its toll on expense accounts and wallets, fuelling the growth of a new breed of hotels that offer fewer extras while simultaneously maintaining a high level of service and comfort.
“Several years ago, we noticed guests who weren’t seeking five-star luxury hotels or pricey boutiques had very limited options — and those that were available were bland, with no personality or ‘life’ to them,” says Paige Francis, vice-president, Starwood Global Brand Management for Specialty Select Brands, which includes Aloft, Element and Four Points. “So, we created design-forward [properties] with future-forward guest experiences at an affordable rate.”
Francis is describing the select-service hotel, where the price-point for guests is lower, but the quality and facilities remain well above the basic, economy hotel offering. While it is proving popular with guests, it is also cost-effective for the brands developing them. With fewer amenities such as foodservice, valet services, et cetera to maintain, operating margins tend to be higher.
“In recent years, more select-service hotels have been developed than full-service hotels,” says Tony Cohen, EVP and partner with Crescent Hotels & Resorts Canada, whose management portfolio includes a wide range of properties. “The cost to build and operate these [hotels], certainly in secondary and tertiary markets, is more economical. From an operational standpoint, the room is always the most profitable part of the business, so the less service and fewer moving parts, the better the financial model.”
Calgary-based Masterbuilt Hotels Ltd., a leader in the entrepreneurial development of select-service lodging, owns the master territorial development rights to the Microtel Inn & Suites by Wyndham brand in Canada. COO Eric Watson echoes Cohen’s view: “This is most profitable part of the hotel market and the least complicated to operate,” he says. “Labour costs are much lower — 15 to 20 people can run 80 to 90 rooms. We’re all about smart design. We have an almost maniacal focus on what the guest needs and what they are prepared to pay for. If the guest doesn’t value something, why put it in our building?”
But what does today’s guest need? The list of select-service essentials includes a room with high-quality bedding, free WiFi, free parking, breakfast, coffee and a comfortable lobby space with grab-and-go snacks. Nonetheless, what has become known as “amenity creep” — the trickle down of refinement from more expensive properties — has slowly added other extras.
High-speed Internet with strong bandwidth is a must so guests can stay and play without interruption. Most select-service hotels offer a fitness centre and some, even a pool. Other guests require a business centre. There’s also the hot breakfast and foodservice options. As the list grows, the lines between select-and full-service begin to blur. Achieving this balance takes ingenuity.
“The Marriott Courtyard in Calgary verges on full service,” says Watson, whose company manages the property. “There’s a restaurant, which we operate and a spa, which we lease to a tenant. With our Microtel brand, we’re quite strategic in putting them beside a full-service restaurant or even developing a restaurant.”
The newest Alt hotel by Le Germain in Ottawa features a lobby bar/café, which offers both refreshing, as well as alcoholic, beverages and hot meals throughout the day. “We partnered with Epicuria, a local caterer, to do something a little more elaborate than the usual grab-and-go snacks and the response has been great,” says Julie Brisebois, general manager of Alt Ottawa. “Guests returning in the evening may not feel they want to go out for a meal. They can eat in the lobby and grab a glass of wine or sample a local beer.”
Catering to customers to this degree has traditionally been the purview of full-service hotels. But, designing an internal economy around those needs has proven successful for major chain hotels. “People have loyalty to brands — maybe they collect points,” explains Cohen. “Under the brand umbrella, the select-service hotel can cater to a specific market and a specific demographic.”
Starwood’s three select-service brands each have their own distinct passion points. Element, for instance, is Starwood’s eco-innovation lab, says Francis, “We have completely re-imagined the extended-stay experience, focusing on healthy food offerings, distinct eco-design and bike share programs, so guests can stay fit.”
Its Aloft brand offers a different, yet refreshing vibe, showcased by the Live at Aloft Hotels series. This global music series features emerging artists. Acts such as Ed Sheeran and Better Than Ezra took part before they became famous.
At Four Points, a Best Brews and BBQ program offers guests the chance to sample local craft beers in their hotel pubs across the brand’s 200+ worldwide property portfolio. Along with their brews, guests are invited to indulge in seasonal, complimentary barbecue-style appetizers.
With smaller room sizes, creating social centres — such as a pub or lobby — is strategic,” says Alt’s Brisebois. “People, especially those travelling alone, need social interaction. They really live in our lobby. I work there myself with my laptop so I can get to know our guests. Morning, noon and night, it’s buzzing.”
According to Cohen, the proliferation of boutique hotels throughout the past 20 years forced brands to approach design and functionality in a meaningful way. “Can I still get a design-based, functional experience for a fraction of the cost?” he asks. “All the brands have put a lot of energy into creating a really great guest experience that’s cost effective. That’s why there’s been such a significant uptick in this market.”
In the rooms, Brisebois adds, the beds are the same superior quality as those in all Le Germain properties. Rooms are chic, comfortable and quiet. “What’s essential is comfort, but style is important, too,” she says. “Here, you don’t feel you’re in a generic place. Our guests are pleasantly surprised when they see what they’re getting for their money.”
Meeting and exceeding customer expectation is key, says Watson. “Microtel wins awards because we offer comfort and unparalleled consistency. But these are not cookie cutter; each property has some local authenticity.”
For the operator, the cost of land in major cities is a driving factor for the development of hotels with smaller footprints. Most major brands are represented by very successful select-service hotels in major cities such as Vancouver, Toronto and Montreal. However, traditionally, select-service hotels have been concentrated in smaller markets — inlcuding Saskatoon, Sask. and St. John’s, Nfld. Alt by Le Germain currently has properties under development in both cities.
Microtel expanded rapidly to smaller Ontario towns such as Kirkland Lake and Timmins and recently added locations in Kitimat and Fort St. John, B.C. Watson says the company’s 13 locations will expand to 50 by 2021.
While Four Points has more than 30 hotels in Canada, with more scheduled to open in the coming months, Aloft and Element only have a handful of hotels here. Both are in Vaughan, Ont., a rapidly growing community north of Toronto. While the properties are not side-by-side, “demand is on the rise for dual-branded hotel developments featuring Starwood’s Aloft and Element brands in key metropolitan markets,” says Francis.
According to Tony Pollard, president of the Hotel Association of Canada, two major changes have taken place in the hotel industry throughout the past 25 years. “The first is changes to technology,” he says. “The second is the widespread growth of multiple brands, which includes select-service hotels. These serve a very important role and meet a significant demand in Canada.”
Volume 28, Number 5
Written By Liz Campbell