Top Ten Future Boutique HotelsTrends for 2015

Top 10 future boutique hotel trends for 2015 by Piers Brown 

It's hard to believe how quickly our 2014 boutique and lifestyle hotel trends are closing out, and how some predictions still remain as relevant today as 12 months ago - who says we usually have a particularly shiny crystal ball? So, with the turn of the year just around the corner we're again gazing into the future to predict our top 10 'hot' trends in the boutique and lifestyle hotel sector for 2015.

Mobile payments - turn the moment of payment into a moment of delight
Those hoteliers planning to simply accept mobile payments in 2015 will fall behind the curve. Be first to embrace m-payments to facilitate new ways to share and split costs, increase competitive advantage and add a new dimension for hotel guests in the process.

2015 will be the year when mobile payment platforms and tokenisation become commonplace. in the US. Apple Pay saw 1 million cards registered in its first three days after launch in the US and Starbucks now processes 7 million mobile payments a week. In addition, there are forecast to be 450 million mobile payment users by 2017, up from 245 million at the end of 2013.

Bill splitting, and the use of new forms of real-time tools and data to help consumers seamlessly share costs will be the millennial traveller norm. A recent JWT study found that 45% of millennials in the US & UK would like to use their mobiles to split bills with friends and not just for products, but services and experiences too.

Chameleon socialites
There has been a lot of research conducted to gain insights on consumers' social media behaviour patterns and changes in consumers' behaviour are happening continuously. Consumers around the world are constructing their own identities more freely than ever - some adopting different personalities based on the type of device and social network they're engaging with. They perceive the use of different channels as an integral part of their daily lives. Research into social media behaviour reveals that Twitter and Facebook users fall into 12 different social media personality types.

As a result, consumption patterns are no longer defined by 'traditional' demographic segments such as age, gender, location, income, family status and more. It's time to disregard the traditional (and tired) demographic models of behaviour. Yes, younger, affluent hotel guests are still (usually) the earliest adopters of innovations and change - take a look around a 'poshtel' or 'budget chic' hotel lobby and you'll see those guests in droves. But now successful boutique and lifestyle hotels and brands will transcend their initial demographics almost instantaneously with more personalised offerings. It will be interesting to see how recently launched brands looking to penetrate the sector like Vib by Best Western will engage their guests.

Sympathetic pricing
We've seen that hotel guests will embrace spontaneous generosity and rewards for good behaviour, and how hotel brands can step in and provide essential public services. Sympathetic pricing is one more totally practical way to show that hoteliers are in tune and are willing to put their money where their mouth is to engage and drive greater long term loyalty. We're being contentious here, and hotel finance directors please turn your gaze now, but get ready for a wave of imaginative and dare we say it, compassionate hotel discounts that support a shared cause and relieve lifestyle pain points.

Only 30% of global consumers think brands make a sincere commitment towards their customers say Edelman, October 2014. Booking.com's moneyback guarantee and Premier Inn's good night guarantees aren't the most sincere but it's a start - show you care and address an eternal guest concern (price) and link this to a personal or meaningful cause.

Hub community connections
Guests and boutique and lifestyle hoteliers will increasingly feel the need to connect with humanity and the hotel's local environment as we become tired of the incessant bombardment of virtual stimuli - which is distracting in itself, and the pervasive mobile connectedness taking over our lives. Look for accommodations acting like community portals - think post offices; community centres; libraries; pubs, clubs and more host (or hosting groups) variations, introducing guests to popular local experiences that could become part of the hotel's approach to content marketing and story-telling.

Guest-Laning
Expect time-starved guests to demand accelerated physical service options, especially from hotel brands they extend their loyalty towards.

After a year where on-demand startups embracing the power of mobile found favour with guests around the world, where will demands around customer service head next?

More boutique and lifestyle hotel guests - accustomed to total empowerment, will expect those hoteliers that they give a lot of money to, and therefore often spend a lot of time with, to provide an optional fast lane through on-site wait times. And we're not just talking check-in, think the queue at the bar, food and beverage orders, premium dining areas and more, not forgetting how to make profits from these services. Take a look at the Disney experience and how theme parks manage 'guest expectations' to maximise profits and the feel good factor.

Selectively tiered service provision is perhaps more suitable for lifestyle hotels with more space than boutique hotels. Of course it can upset paying customers if handled poorly (paid guest lanes will just draw attention to sub-standard normal guest service). But winning hotel brands will design guest-laning solutions that benefit all customers, even if that's in part by removing the most time-sensitive customers from the 'slow' lanes.

2014 saw Hyatt, Hilton and Starwood hotel chains all test initiatives allowing loyalty program members to check in via their apps and use their mobiles as room keys, in order to avoid queues at the front desk.

Distribution, distribution everywhere and the rise of SoMo
Boutique hoteliers will focus on driving more profitable business from the ever growing selection of distribution channels available. Wary of increases in operating and distribution costs,  look for currently unknown disruptive distribution upstarts and more boutique hoteliers negotiating reduced OTA commissions. Keep an eye on the large behemoths likeAmazon and Apple to disrupt the status quo. Imagine the knowledge and personalisation capabilities these companies now possess. Watch for a heavy social push with Twitter's 'Buy Button' (currently being tested in the U.S). Think of a boutique and lifestyle hotelier's full booking and promotions process on Twitter including payment for a small transaction fee! Facebook looks like it's on the path to becoming a "social search engine" too - who does one rather trust when looking for a boutique hotel for the next trip? The search results we get from Google, the results on TripAdvisor or the comments and check-ins from our Facebook friends at hotels in New York?

Peer2Peer dining
The hosted vacation rental model (think Airbnb and HomeStay - renting unique places to stay from local hosts) has made the natural transition to hosts' kitchens and dining rooms and traveller's unique dining experiences. A number of Peer2Peer dining websites, such asmealtango and eatwith have launched, prompting corporate level companies like Trip Advisor, to jump on the bandwagon. Much like Poshtels, Peer2Peer dining offers tourists a unique and authentic experience, within a budget; with user reviews (for both guests and hosts) and foodie pics providing welcome feedback through the experience.

Hotel brand stands
The democratisation of fairness threatens traditional hotel brands that expect millennial travellers to pay a premium for services elsewhere. With the rise and speed of information and news ubiquity, cutting edge boutique and lifestyle hotel brands will start contentious, painful and necessary conversations, because they know engaging customers is a primary goal as emotionally engaged guests provide a financial premium, regardless of market segment.

Watch hotels and brands closely, and you'd be forgiven for thinking how straight laced they are. There is the odd exception but here's two reasons why in 2015, that strategy couldn't be more misguided.

First, when potential guests are surrounded by a plethora of branded content and conversation, constantly occupying neutral ground means a slow drift into obscurity. Second, many consumers believe hotel brands should speak out.

C'mon boutique and lifestyle hoteliers,  relax those rigid brand standards and focus on something that matters for guests. Here's some inspiration on how some daring brands are already making real, tangible brand sacrifices for people, society and the planet.

Blurring of business and leisure
Bleisurites: They're smart, not trendy and focus on both business and leisure activities while on the same trip. As the lines between business and leisure travellers blur, and the speed of communications and technology improves unabated it's easier and quicker to get things done, and working on the move with mobile is now commonplace. With companies offering a more flexible approach to employee productivity it presents fresh opportunities for hotels to incorporate bleisurites into one's hotel visual story. Consider changing room configurations and amenities that would resonate with them most - how technologically advanced is your hotel to capture this type of traveller for instance?

Robohotel
Don't worry about the odd Terminator nightmare, Robert and Frank, and/or the sci-fi fantasies: many guests will have their first face-to-face encounters with robots in 2015.

Jeff Bezos recently told shareholders that Amazon would have 10,000 Kiva robots by the end of 2014 (from just 1,400 in 2013), and that this could cut fulfillment costs for an average order by 20-40% (Boston Consulting Group, August 2014).

And while lower costs will be the justification for robot proposals told in hotel boardrooms during 2015, smart hotel business will be planning not just how robots might decrease their costs, but how they can also increase guest satisfaction, too.

Draw inspiration from Aloft's hotel robotic butler as an early adopter, and how to use robots to initiate better more reliable, personal and convenient guest services. Remember, this isn't about man v machine. Robolove will free hotels' (human) in-house team from the most repetitive parts of their roles to focus on the more engaging, valuable tasks (that will further increase their satisfaction, and so ultimately that of hotel guests too).

Each opportunity above highlights a key innovation that could see the boutique and lifestyle hotelier delight, surprise and build stronger loyalty with one's guests. Thanks to Trendwatching.com for some inspiration whilst writing.

High-end brands compete for young travelers

High-end hotel brands compete for young travelers

By Danny King

Some of the old-guard "workhorses" of the hotel industry spent much of March trying to get their guests to play around a little more.

At the nearly 200 hotels under Starwood Hotels & Resorts' Westin brand, guests were treated to open-house events stemming from the brand's new "Well-Being Movement" campaign, which included activities such as guided 5-kilometer runs, appointments at the hotels' Heavenly Spas and group yoga sessions.

Meanwhile, Marriott International's Renaissance brand was getting ready to produce live-music shows such as a concert with alt-rock ensemble Grouplove at the Renaissance New York Times Square and a co-produced event with Universal Music Group at the South by Southwest festival in Austin, Texas.

Indeed, some of the most established upper-upscale brands are no longer just about great location, reliable service standards and big meetings spaces. Today, events best reflect how some of the most entrenched top-tier brands are sharpening their marketing focus to win over the youth and lifestyle markets.

The trend toward lifestyle attributes such as local entertainment and wellness benefit from increased business-travel spending, while at the same time enabling upper-upscale brands to compete against smaller, boutique hotels whose natural constituency is the more individualistic type of traveler.

Renaissance, whose 155 hotels are split about evenly between domestic and international, said in early March that it would start featuring local live acts in its lounges, poolside areas and public spaces while punctuating its campaign with occasional shows from nationally known bands at its hotels.

In addition to the Renaissance Times Square concert and South by Southwest event, Renaissance has reached an agreement with AEG, a promoter with a live-events website, to set aside tickets to some of AEG's shows specifically for Renaissance guests. AEG operates facilities such as Brooklyn's Barclays Center, the Staples Center in Los Angeles and Seattle's KeyArena.

"We are well positioned in between traditional business hotel brands, the boutiques and the independents," said Dan Vinh, vice president of global marketing for Renaissance.

"We want to give business travelers some of the stepped-up experience they would find in the boutique and independent space," he said, but with "a more comfortable vibe where [business travelers] know they can get their work done, so that they can truly enjoy the other side of it."

Westin, which had 122 hotels in North America as of the end of 2013 and another 76 overseas, last month debuted its $15 million Westin Well-Being Movement campaign, complete with the open-house events. Two of that campaign's components arise from partnerships: the first with the meditation consultant Headspace to provide audio and video meditation exercises on Westin's website and through mobile apps, the second with SuperFoodsRx to supply guests with nutritional juices and foods.

"The Westin Well-Being Movement is not an effort to rebrand, but rather to build on Westin's existing wellness platform," said Brian Povinelli, global brand leader at Westin. Povinelli added that additional wellness-related partnerships will be announced throughout the year.

Such brands are looking to hitch a ride on the tailwind that has been driving development across the rest of the hospitality industry during the past few years. The upper-upscale brands, which account for about one in nine U.S. hotel rooms, tend to be larger than typical hotels and often located in urban locations with more valuable real estate. For that reason, the upper-upscale sector's U.S. room supply of about 560,000 rooms has remained just about unchanged during the past three years while the rest of the hotel market grew.

"There's a sense that some of the big brands are either getting tired or muddled in the perception of the consumers," said Mark Eble, Chicago-based regional vice president at consultant PKF Hospitality.

Eble likened these flags' skew-younger branding efforts to CBS's strategy of replacing longtime late-night TV host David Letterman with Comedy Central's Stephen Colbert, adding, "It's confusing for people who study the industry to figure out the distinctions [between upper-upscale brands]. And if it's confusing for industry people, it has to be confusing for consumers."

Meanwhile, the return of the upscale leisure traveler, combined with the slow-but-steady increase in business spending, has fueled upper-upscale demand growth that is outpacing lower-end sectors.

Last year, revenue per available room (RevPAR) within the upper-upscale sector rose 5.8%, outpacing the overall industry's 5.4% RevPAR growth rate, according to STR. Specifically, average upper-upscale room rates were up 4.3%, to $161.01 a night, almost 50% higher than the industry average, while occupancy last year rose 1 percentage point, to about 72%, almost 9 percentage points ahead of the overall industry.

"These are the workhorses of the industry," said Jan Freitag, STR's senior vice president of strategic development. "If you're selling seven out of 10 rooms every night, that means you're pretty much full for the room nights that matter."

Still, Starwood and Marriott International in particular are looking to spur further business to brands that have in some ways been in the shadow of their respective flagship Sheraton and Marriott hotels, both of which also compete in the upper-upscale sector. Last year, Renaissance hotels' RevPAR in North America rose 4.2%, trailing the 5.4% growth rate of Marriott's flagship brand.

And while Westin last year essentially kept pace with Starwood's 4.3% RevPAR increase and trumped Sheraton's 2.4% RevPAR growth, higher-end Starwood brands such as St. Regis and W outpaced Westin in terms of 2013 room-demand growth.

With the upper-upscale sector including all of the largest U.S. hoteliers' flagship brands -- Marriott, Hyatt, Hilton or Sheraton -- Renaissance and Westin aren't the only two in the sector to recently start a marketing push designed to break them out from the pack and alter their brand image among younger prospective travelers.

Last summer, privately held Omni Hotels & Resorts, which has long pushed its hotels as the ultimate in business meetings and events destinations, undertook to bolster its techie credentials by starting a print advertising campaign with an augmented-reality component.

Using an Omni app, users could access videos such as virtual tours and other exclusive content by pointing a smartphone at the print ad. With such a millennial-friendly approach, Omni appeared to be looking to skew younger to attract more business to both its larger urban properties, like the recently opened 800-room Omni Nashville, and to recently acquired resorts like Southern California's La Costa Resort and Spa and Texas' Barton Creek Resort & Spa (now the Omni La Costa and Omni Barton Creek, respectively).

Marriott itself attempted to skew younger with its namesake brand last June by launching its "Travel Brilliantly" rebranding effort, which emphasized experiential travel and included a new logo and a new website. It also entered into cross-promotion partnerships with Fast Company, Mashable and Wired as a way to further the brand's presence with younger businesspeople.

Still, Westin and Renaissance show that differentiating such brands, especially from their larger sister brands, might be taking on a greater sense of urgency as millennials account for a growing percentage of business travelers by narrowing their branding approach even further.

Starwood, for example, has more than twice as many Sheratons as it does Westins, while Marriott-branded hotels outnumber Renaissances by more than 4-to-1. The shifting emphasis is driven to a large extent by a growing youth market. Boston Consulting Group estimated last year that employees in the 16- to 34-year-old range could account for as much as half of all business-travel spending by the end of the decade.

"The whole industry is recognizing that the next-generation business traveler will be the majority within the next few years, and they're expecting stepped-up design and stepped-up experiences," Vinh said. "They want to see and do more, and they don't have a lot of time to do some of that, so we want to do the heavy lifting for them."

Granted, the campaign by Westin, a brand that dates from 1930 and was acquired by Starwood in 1998, further emphasizes a "wellness" bent that was apparent as far back as 1999 when Westin introduced its trademark "Heavenly Bed," complete with pillow-top mattresses, to the travel world.

And while Westin's wellness focus has sharpened, the company is not alone in using the concept as a buzzword to push its brand.

InterContinental Hotels Group in 2012 notably announced its Even select-service brand, saying at the time that it would take on upscale select-service brands such as Courtyard by Marriott and Hyatt Place by targeting customers looking for wellness-related products and healthy travel experiences. The first hotels under the new brand are slated to open this year in Connecticut and Maryland.

"Wellness is not a trend," Freitag said. "It's here to stay, especially on the road, when it's a little harder to maintain that [health] regimen."

With Renaissance, though, the most recent campaign appears far more of a departure from a company that was founded in 1982 as an upscale division of Ramada and was acquired by Marriott in 1997. Far from hip and edgy, Renaissance was a classic "conversion brand" regarded as a way for Marriott to gain optimal urban locations with hotels that didn't necessarily meet Marriott-branded standards.

In fact, Renaissance's live-performance calendar and local-artist emphasis appear to be a nod to both independent boutique hoteliers, such as Ace Hotel, and to Hyatt's Andaz luxury-boutique badge.

Ace, whose on-property touches include in-room turntables (guests can check out vinyl albums from the front desk), earlier this year opened a Los Angeles property that includes a 1,600-seat live-music venue.

Andaz includes a West Hollywood, Calif., property that was originally a Hyatt House and was nicknamed "the Riot House" for the number and pedigree of rock bands that stayed there in the 1960s and 1970s. Andaz in 2011 also introduced its Andaz Salon series, in which the hotels began scheduling on-site events ranging from music and dance performances to art exhibits to wine and cheese tastings.

The difference, of course, is that while Andaz has a dozen properties worldwide and Ace Hotel has just seven (a Pittsburgh property is slated to open next year), Renaissance is looking to add 15 properties this year alone, bringing its total to about 170.

To be sure, there is far more to these hoteliers' branding and marketing efforts than targeting the youth market. Much of what drives business to upper-upscale hotels like Renaissance, Westin and Omni remain tried-and-true factors such as loyalty points, well-established brand standards and, of course, location, location, location.

In fact, PKF's Eble points out that companies like Marriott, Starwood and Omni have the opportunity to gain business through a more targeted strategy because, aside from cities such as New York and San Francisco, most urban areas in the U.S. have few boutique hotels competing with such upper-upscale brands for younger business travelers.

"Those properties are chosen for location, and then everything else follows," STR's Freitag said. "The brands might dispute that, but the reality is that you want to be close to your meeting."

Still, both Starwood's Povinelli and Marriott's Vinh reported that last month's events were well-received, with Vinh noting, for example, that guests have been "pleasantly surprised that they could stumble into an experience" like a live performance at their hotel.

All of which, Eble said, could better stave off the pull of the independents that do move into more urban centers in the future.

The boutique hotels, he said, "are like dogs barking at the ankles" of the larger brands. "Having a local flavor is certainly a move away from the beige."