01 Dec 2020 • Hospitality
Hotels have been hit hard by the pandemic. How can they fight back?
Frame’s editor at large sits down with Youri Sawerschel, founder of brand strategy and design agency Creative Supply, to talk about the future of hotels, post-pandemic.
The hotel sector is among the hardest hit by the impact of the coronavirus pandemic. In Frame’s home base of the Netherlands, average occupancy has fallen to less than 10 per cent, reports CBRE. Against this backdrop, Frame’s editor at large Tracey Ingram discusses the future of hotels with Youri Sawerschel. One of Sawerschel’s roles as founder of brand strategy and design agency Creative Supply is to help hotels navigate changes in technology, consumer behaviours and regulations. The pair consider how hotels can rethink their rooms, diversify their offering while staying on-brand, and extend their position to online.
TRACEY INGRAM: Let’s start with the pre-COVID-19 situation. There was a move towards local, with new hotels becoming more embedded in their environments. More social spaces, where visitors felt like they were getting an ‘authentic’ experience rather than being in a bubble with other tourists. Because of that – and presumably also due to the lack of space in city centres – hotels were beginning to pop up in suburban residential areas.
YOURI SAWERSCHEL: Before COVID hit, we were in the midst of a global tourism boom. It was all about new experiences, and people were shifting away from big hotel chains in favour of something different. Lines were blurring between retail and hospitality. And yes, more social places – which is quite ironic now. I do think this whole ‘living with locals’ idea was more a marketing tagline than a reality. If you go to The Hoxton, The Standard, Ace – a few of the hotels making this kind of claim – you might see locals, but you probably won’t meet them.
A spin-off of Ace Hotel, Sister City in New York City (cover and above) is designed to keep contact time between guests and staff to a minimum. Photos: Adrian Gaut
Sister City’s low-contact concept feels even more relevant post-pandemic. Amenities such as room service are ordered via your online profile – there are no hotel room phones – and extra supplies such as fresh towels are located in stations along each corridor. Photo: Adrian Gaut
TI: True, but it’s more that there’s a chance for interaction, which I think is interpreted as more authentic. And these types of hotels often have calendars of events attended by both locals and hotel guests. In smaller workshop formats, there’s a much better chance of interaction than by passing someone in the lobby.
What’s also interesting in retrospect is the growing distinction between disconnection and connection. Do you want to retreat or have social contact? Hotels weren’t necessarily offering visitors the choice within the same space just yet, but they were distinguishing themselves as one or the other. I have to think of the recently opened Sister City in New York, with its more hands-off approach to service.
And then, of course, the pandemic hit. Concepts like Sister City seem even more relevant with the low-contact necessities of COVID. Since socially focused hotels were going the same way as co-living – rooms and private spaces were getting smaller to allow for bigger communal areas – suddenly that was an issue. And obviously in general there was less tourism, fewer guests.
YS: The co-industry took a big hit. People are travelling much closer to home – if they’re able to travel at all. The hotels that want to survive have to rethink what a hotel is. If they stick to the definition of a hotel being a place where people from abroad come to sleep, they’re going to be in trouble. Things won’t return to ‘normal’ before 2021 at least, and lockdowns might be on and off for a while. Hotels are then left only with locals. Even those hotels that play the local card earn most of their revenue from rooms. They need to question whether they need that many rooms, or if they can focus more on localized services. Hotels have space. What if a bar was replaced by a gourmet grocery shop, bakery or butcher? What if hotels were also places to pick up dry-cleaning? For exercising in the morning? Being able to live without tourists because you’re so locally connected – that’s an interesting idea. But there’s not one solution that will work for all hotels; it’s so location dependent.
TI: You mention questioning whether they need that many rooms. I can also imagine that in the meantime, they’re questioning how they use their rooms. Hotel rooms are private, intimate spaces with their own bathrooms and often a nice view. Some could be repackaged for shorter private experiences. Room service dinner for two, for example, if you’re a hotel that has a great reputation for food. A number of hotels already pivoted during lockdown. In Amsterdam, Zoku and Hotel V both advertised rooms as workspaces – a smart solution for a city where people reside in close quarters and were suddenly forced to live, work and homeschool all under one roof. Do you see a future for co-working in hotels?
YS: It’s easier to pivot to whatever you want to do if you already had part of that offering embedded in your image. But if your average ‘Hotel de la Gare’ or ‘Hotel Europa’ suddenly wants to become a co-working space when it hasn’t done anything remotely like that in the last 40 years, it looks like a last-ditch effort. It doesn’t match who they are.
A number of hotels pivoted during lockdown. In Amsterdam, Hotel V (top) and Zoku (bottom) both advertised rooms as workspaces – a smart solution for a city where people reside in close quarters and were suddenly forced to live, work and homeschool all under one roof. Photos: courtesy of Hotel V and Zoku
Shifting the focus to food has proved successful for some. The New World Wuhan Hotel, for example, started to sell takeaway steamed buns during COVID. They became so popular that this is now a big source of revenue. Chefs from five-star hotels in Paris have opened bakeries and pastry shops that have been so successful they’re here to stay. Instead of trying to sell their rooms for people who probably weren’t coming, they decided to do something else to create value.
This being said, however, it’s easy for us to comment when we don’t have the pressure linked to paying off an asset. Also, the people who are technically the owners of hotels are not necessarily the ones operating it. The stress of the pandemic can be paralysing for trying to start something new and different. Your ship is sinking and you’re meant to simultaneously invent a plane. It needs a bit of dual thinking I guess.
TI: True. And then there are band-aid solutions versus long-term strategies. A lot of early moves fitted into the former category, so where do you think we’re headed in the long term?
In the long term, leisure might become a stronger segment than business
YS: In the long term, leisure might become a stronger segment than business. Hotels in the outskirts with privacy and nature, or even glamping concepts: the good ones will be the big winners.
On another note, lots of people in the industry are hoping that acquisition will become more frequent in Europe, because it’s actually a very stuck market. Big European cities are full of family-run hotels that are ideal targets for acquisition.
It’s also important that hotel brands start to extend their position to online. As a concrete example, let’s say you have a mountain bike hotel in the Swiss Alps. You could sell bikes to people in your database, offer advice, have a forum for discussions. Re-create a sense of community. This type of thing is easier for smaller hotels with a strong niche position. Even if it doesn’t drive so much revenue, it’s a key way to stay in touch with your audience.
This leads me to digitization, something that was beginning pre-pandemic and will become stronger than ever. Netflix on your phone replacing in-room entertainment, Deliveroo as an alternative to room service, taking an online class instead of going to the gym. With these digital services you can assemble a five-star hotel experience, even if you’re not staying in one. When people do stay in hotels in the future, they’ll enjoy the freedom to not have to purchase the whole package, but to be able to have the things they want, when they want them.
We also need to talk about sustainability. In a number of years you won’t be able to visit certain places due to unbearable temperatures or drastic tourism regulations. Hotels need to urgently consider their entire value chain – where their food comes from, their energy practices and so on. Sustainability is falling into the shadow of COVID, but the difference is that COVID will leave, climate change won’t. If I were to open a hotel now, I’d make sure it’s a flagship of sustainability, but I wouldn’t brand it that way because sustainability isn’t sexy unfortunately.
Sustainability should be built-in. There’s an incredible amount of waste in hotels
TI: I think it’s more that sustainability should be built-in – not something you market, not a layer on top of what you’re doing. There’s an incredible amount of waste in hotels. I had an interesting conversation a few years back with someone who was trying to rethink the whole hotel supply structure because so many resources are thrown away. What if the leftover fat from the deep fryer became the soap in the hotel’s bathrooms? What if guests could witness the lifecycle of certain things in a hotel, actively reducing waste instead of contributing to it?
YS: Indeed, there’s a lot of waste in hotels – just look at the buffet as an example. But the biggest barrier to progress is the mindset of hoteliers themselves, who just don’t want things to change. We speak a lot about new concepts – Moxy, Ace, W – but they represent just a drop in the overall hotel market. We trade people have the feeling that the industry is moving towards having cooler bar check-ins with hammocks in the rooms, but the reality is that 99 per cent of hotels are just the same damn old thing.
TI: But maybe now they’ll be forced to change.
YS: Yes exactly – this might be the nudge they need to actually act. Although making decisions about investing for the future is almost unthinkable at the moment. For now, you need to be creative and agile. Don’t spend too much money, and find a way to stay relevant.