Things are changing in the accommodation market.
The causes are likely linked to the effect of the sharing economy, and digital age access to information. Personalisation and the demand for a unique experience is at the heart of the traveller, and the hotel model is evolving to meet the changing demand.
- Cost of development & maintenance
- Labour cost & shortage of labour in hospitality
- Expanding and varied expectations of travellers
- Demand for personalised experiences
- Competition in the market
- Diversification of services and into new markets
- Reduction in asset ownership in favour of independent building ownership with operational rights let to hotel chains
- Creative operational efficiency strategies
- Dual branding
- Mixed use development
- Brand centred immersive diversification
What is dual branding?
Hotel groups constructing hotels with two different brands, entrances and room types under the same roof.
- Diversification: Providing multiple options to guests in one location
- Operation: Shared back of house
- Construction: Shared construction and maintenance costs
Who is dual branding?
InterContinental Hotels Group (IHG®) will open its first Australian dual-branded hotel by 2022 with Hotel Indigo Melbourne Little Collins and Holiday Inn Melbourne Bourke Street Mall. The property will front onto Bourke Street Mall on one side and Little Collins St on the other, allowing Holiday Inn to make the most of the pedestrianised retail haven and Hotel Indigo to bring the edgy laneway neighbourhood to life.
What is mixed-use development?
Hotel rooms within a building that also houses a combination of retail, office, residential or entertainment spaces that are separate businesses to the hotel company.
- Guest experience: Activities or services may be available for guests on site
- Asset & operational cost reduction: The hotel and businesses that are co-located are mutually supportive but not connected. Reduces services required to be managed inhouse.
- Flexibility: Ability to expand or contract the hotel space to allow maximum profitability, optimising floor level usage according to profitability and suitability for different uses
Who is using mixed-use development?
The new Sofitel in Adelaide features a 32-storey development, the top eight levels will feature 80 apartments, while the remaining floors will contain the hotel’s 250 rooms.
What is brand centred immersive diversification?
Hotels are evolving their services within strong branding to create unique guest experiences.
- Personalised and expanded experiences: Unique point of difference
- Operational costs: Catering to a specific target market to maximise the available market by extending on existing capabilities
- Diversification: Expanded offerings and services on site
Who is using brand centred immersive diversification?
Four Seasons Hotel Westlake Village, California Luxury hotels are expanding their wellness services in response to demand from guests to continue their healthy lifestyle while traveling. The Four Seasons is partnering with the California Health & Longevity Institute to create services like on site medical consultations, life coaching, fitness trainers and eating clean programs.
Get on board?
You need to know what will suit your brand, and what you can do to extend and evolve rather than re-invent what we know is a great business, just waiting to explode into attracting guests, greater profits and being unmissable.