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StrategyFeature

Can a hotel without a concept survive the crisis?

The Covid crisis has meant a decline in the number of international tourists by 20% to 30%, and could affect more than 50 million jobs worldwide. It seems clear that in this market, only the hotels with an innovative, competitive edge will survive. But how do you tell if a hotel’s concept is just marketing window dressing or a real business advantage?

Cristina D'Agostino

By Cristina D'Agostino17 août 2020

Youri Sawerschel, founder of the consulting firm Creative Supply in Zurich and author of the “Hotel Concept Handbook” published in collaboration with the Ecole Hôtelière de Lausanne, is clear: a night in a hotel with a nice view, a comfortable bed and a satisfying breakfast is no longer enough – in fact, it hasn’t been for quite a while. “The Covid crisis has given hotels the opportunity to rethink their role beyond merely providing accommodation, and to define a new hotel concept that is more locally rooted, one that offers meaningful content and that potentially even ventures into new fields like multimedia, e-commerce and education.” Florent Giradin, professor of brand management at the Ecole Hôtelière de Lausanne, agrees, and has similarly observed that the hotel industry has not seen the innovation that has swept through other luxury sectors. “The hotel sector has realized that they can no longer continue to work as they did 40 years ago; using services to differentiate themselves is no longer enough.”

Youri Sawerschel, founder of the Zurich-based consulting firm Creative Supply and author of the "Concept Hotel Handbook" (DR)

The pandemic currently shaking the world will widen the gap even further, Sawerschel says. “Thinking in terms of hotel concept is key to weathering the crisis. Ten years ago, hotels were still wondering whether they should invest in Wi-Fi in the rooms and whether to charge guests for this service. Today, the hotel business is in a state of upheaval and has to rethink its role based on new expectations surrounding guest experience, design and the use of space. The first question hotel managers should be asking themselves right now is what services can the establishment provide that digitalization does not offer. The starting point for reflection is how to appeal to the customer, what is the experience that will earn the customer’s loyalty.”

A Transformative Experience

The first question hotel managers should be asking themselves right now is what services can the establishment provide that digitalization does not offer

Youri Sawerschel, author of "Concept Hôtel handbook"

The “Hotel Concept Handbook” is a learning guide that gives the reader a quick understanding of the seven pillars that form the basis of the hotel concept. For Sawerschel, the history of the hotel is the foundation of the concept, on which you build the hotel’s identity (visual, verbal, olfactory and sound), spaces, services, ecosystem (customers, employees, suppliers), distribution channels (distribution, activities, events) and content (the message). Rather than dwelling on new marketing strategies, the handbook offers step-by-step guidance, including in the form of concrete examples for hotels seeking to emerge stronger from the crisis. According to Sawerschel, a clear distinction must be made between a hotel concept (which is based on the history of the establishment and its geographical location, both of which are unique) and a theme hotel, which is something chasing a trend. “Hotels that blindly follow social network trends make themselves obsolete very quickly.”

The transformative experience has to allow them to learn something from their stay, to trigger an awareness and enable them to see their life transformed

Florent Giradin, professor of brand management at the Ecole Hôtelière de Lausanne

Girardin actually believes that the hotel business must go even further. “Everything has become a service commodity in the hotel business. Consumers need more. When all hotels are offering experiences, the next step will be to offer transformative experiences. Experiences that make sense to the guests. But to do this, you need to know who the guests are and identify their needs, because the transformative experience has to allow them to learn something from their stay, to trigger an awareness and enable them to see their life transformed. This is called ‘upskilling’. But even watching a sunrise from the top of a mountain can be a transformative experience. Consumers are interested in connections, based on shared interests or belonging to a community. And hotel concepts must target these communities. Some want to reconnect to nature, others to silence, to their bodies,” Florent Girardin continues. “This is a strong trend today, rising to fill the void left by traditional sources of meaning such as religion, nation, family, which are in decline.”

The transformative experience changes the traveller's perception, becomes a quest for meaning. Here, the discovery of Antarctica (Vista Jet safe Haven Antarctica)

New professions for the hotel business

The notion of hotel concept also requires new professions. Today, we are seeing hotels getting involved in the manufacture and sale of objects, clothing and furniture, and sometimes even joining forces with major retail chains. The Muji Hotel in Ginza is just one example. As the Hotel Concept Handbook relates, other concepts specific to the art world, like an art gallery or a recording studio (as in the French Theory Hotel in Paris) can readily lend themselves to integration into a hotel concept.

The Muji Hotel in Ginza, Japan (DR)

But is venturing into totally different fields a good idea for the hotel business? For Sawerschel, new skills add value and are a clear plus if they reflect the identity of the hotel and the authentic history of the place. Girardin sounds a more cautious note. “It's all about who you pick. You have to build solid partnerships. I would see this as a threat if the opposite were to happen, for example if Ikea started to go into the hotel business. They could very well consider this option and start selling their furniture in the hotel. It's in the hotels’ best interest to build partnerships and work with retail brands.”

The hotel concept of the Parisian hotel French Theory is based on the musical theme. Here, a recording studio is at the disposal of the guests (French Theory).

The hotel concept also has its place in the very high-end segment. Quentin Desurmont, president of Traveller Made, says, “The high fashion hotel business does not yet exist. That's why we are in the process of defining the specifics of what we call ‘haute villégiature’, just as there is haute couture. The idea is to present a concept of high-level resort collections. But selling a suite for 50,000 euros is not haute villégiature, you need innovation. Innovation is the key to survival. And this will not change as Covid subsides. There are already a few examples, like Peninsula with its concept of artists in residence; it's innovative and it's done in a structured and intelligent way.”

The hotel concept, a source of profit?

The hotel concept is a very nice ‘package’ that serves above all to attract an investor, whether in the creation or resale of a hotel

Eric Fassbind, owner of the Swiss hotel group By Fassbind

So what’s the bottom line: can the hotel concept increase profitability for hotels? Eric Fassbind, owner of the Swiss hotel group By Fassbind, gave us his answer to this question. “Of course, hotel concepts are interesting and bring innovative ideas to the forefront of hospitality. But it is clear that they are mainly developed by hotel management to appeal to real estate investors, whose main concern is profitability. A hotel chain, which does not own the walls, must be accountable both to investors upstream and to the guests downstream. The hotel concept is a very nice ‘package’ that serves above all to attract an investor, whether in the creation or resale of a hotel. But lifestyle is not necessarily a source of profitability in itself.”
“Owner-managers have only their guests to answer to,” he continues. “And they expect a fulfilling business approach: an excellent night’s sleep, efficient service, enough space and easy accessibility. Of course, this is especially true for mid-range hotels up to 4 stars. When I renovate or buy a hotel, I obviously think about the style and vibe I'm going to give it, but I don't want it to be too pigeonholed for the customers. My profitability will not come from a lifestyle concept, but from the way I manage my hotels, according to the same aggressive pricing policy.”

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