Why Are Hotels Embracing Local Culture?
Experimenting has always been an important part of the human experience.
The world's best chefs are constantly inventing new fusions, trying things in new combinations. Bartenders are always playing around with new types of alcohol to see what works well together; and in employment, there's a high value on flexibility and location independence as millennials seek to blend work and play. In hospitality, the ability to experience local cultures adds a new spin on travel and if you stay with a local, what better way to do that?
But as we've pointed out previously on this blog, AirBnb has (in some ways) already started to blend with a more traditional hospitality model. Several sources, including this article by Business Insider, show that AirBnb bookings are already more expensive than hotels in some cities. Many supposed "local" hosts on AirBnB are in fact part of professional management companies that let houses on behalf of the owners. As the model has gone mainstream, so have the opportunities for profit.
Hotels have responded by asking how they can blend their strong points — quality and consistency — with the growing demand for localism. Brands as respected as Ritz Carlton are experimenting with local food trucks on their premises, while New York's Roger Smith Hotel has brought local shopping directly to guests by maintaining a dedicated space for pop-up shops. Sheraton's recent 10 point plan to refresh itself by the year 2020 puts the focus on local F & B and design—in addition to a "maniacal" focus on service—to stay relevant.
There's also a movement toward local art and decor. Here in Melbourne, the boutique Tolarno Hotel is a former art gallery that remains decorated with works by local talent. QT Hotels have given meaning to local quirk and the new Radisson Red brand, with locations in Brussels, Spain and Minneapolis, has walls splashed with local artwork and themes.
What this means for hotels
As a professional with real decisions to make, you could frame the question this way: Is it more important for guests to connect with my hotel brand, or with the local culture in which my hotel is situated? To what extent are these two connections equal?
Of course part of the answer to this depends on whether your property is a destination in itself or whether it is merely a base from which guests will explore the local environment. If guests want an experience that feels local, offering that experience will connect them to your brand. On the other hand, it's important to build and maintain a dependable, comfortable brand experience that stands firm amongst market disruptions. Kemmons Wilson for example opened his first Holiday Inn in 1952 and within 12 years had 500 – all based on a promise of consistency and service no matter where you stayed. (See here for an interesting read on his approach.)
For the vast majority of hotels, the sweet spot is somewhere in between. Ignoring the movements of the industry isn't much of an option, yet changing directions too often and too drastically can damage a hotel's identity beyond repair.
That's why the rise of localism in hospitality is a thing to be carefully studied and considered by every hotel manager, owner and investor — at least before any major decisions are made. Bringing F & B into this century, with healthy and locally sourced options at fair prices, is arguably a bulletproof strategy. Other considerations such as local artwork, multi-functional furniture and dynamic public spaces have a good deal of momentum and research behind them.
At the same time, maintaining a consistent brand direction—an experience guests can rely on—is important. AirBnb is a brand whose franchisees have total creative freedom, yet they play by the same rules. Properties that meet or exceed expectations are rewarded with good reviews and more bookings, while even a change in the configuration of furniture can cost valuable review points, especially if the photography isn't updated.
The basic moral here is very simple: It isn't just hotels looking to the share economy for inspiration and local flavor. It's also the share economy looking to hotels for inspiration on service and brand consistency. This feedback loop will affect the majority of hotel operations worldwide, if it hasn't already. The question is: What's the right blend to see you into the future?
Dean Minett
Director - Minett Consulting
Minett Consulting
