In association with
Ben Reed Hansgrohe / Volker Pflueger Forpeople / Phillip Miller Denton Corker Marshall / Stephen Shakeshaft Woods Bagot / Kristian Piolet Hansgrohe / Robert Allen The Commercial Company / Richard Fogarty Bruce Shaw
Few would have predicted the current state of the London hotel market – and those that did are no doubt involved with the good news stories of this sector. So what will the next 10 or so years bring?
In comparison with the general regional market, the London market remains resilient, protected by its unique attributes and to some extent by a weak pound. However, things can change – as we have witnessed in Paris, as this leading tourist destination has dropped dramatically through a mix of terrorism, floods and French strikes.
The ‘Value for money’ sector has seen a dramatic expansion across the UK, including London. The German Motel One chain, for example, appears to have balanced quality with price – and now boasts over 50 hotels. Motel One has become a popular choice for business and leisure, with the only compromise being the size of the room. The question remains, have all the new brands achieved the same success? Is staying in a room without windows for two nights really worth the reduced cost?
The bigger international hotel names are effectively focused on building and maintaining their brand as franchised or managed assets. The challenge for the London hotel market is not only to understand the needs of their diverse customer base but also to stay ahead of the ever-changing trends – not something this sector has always got right.
The London Hotel market remains a very attractive investment, partly due to the high performance and general resilience. So what’s next? How will technology impact upon the hotel market?
David:We’re already starting to see how the guest experience is changing. Guests will now check in and unlock their room from an App on their phone. Pre-loaded registration will tell them when their room is ready and when they’re finished they can just walk out.
Robert: We’ve recently installed that kind of system at the Park Plaza. A lot of people book through their phones, so the hotel will keep in contact with you through the phone and they will then confirm the booking – and you don’t need to go through reception, you can go straight to your room. The advantage of that system to the hotel is that they have now got the guests’ details – and often the booking agents keep those details back. The hotel wants those details so they can get repeat business. Also, the hotel can then text special offers to guests for the bar or the restaurant. The Park Plaza has tablets that control the heating, the lighting etc – and this could also be done through your phone.
“Some hotels don’t make very much money from food and beverage so there looking at alternatives. Should they get a celebrity chef in? Should they get a key designer in to redesign the restaurant? There’s a little bit of that going on right now. It’s about taking a hotel that’s perhaps not performing brilliantly and looking at how you can improve that performance – how it can be turned into a destination.”
Volker: All these things are extremely helpful and can produce a better guest experience. At the same time there are counter developments for people who travel for leisure which are completely technology-free facilities. For some people it’s really nice to get away and to completely let go from technology – to go in the opposite direction, head to a remote place and have a very analogue experience. If we talk about technology, we have to start talking about using VR tools as space becomes more and more pressured.
Robert: We’re already starting to do that – people can stay in the hotel but can go anywhere in the world using the virtual experience. So does this all mean that in 10 years’ time we’ll walk into hotels without ever having to go to reception and check in through those time-consuming traditional systems?
Kristian: I hope so – that’s certainly where I’d like it to go. There’s nothing more frustrating than, at the start of your stay, waiting around for half an hour to get checked in – and then waiting around again when you need to leave. This is a real bugbear of mine.
David: I’d like to reiterate Robert’s earlier comment. I think there are certain hotel brands that can leverage off the IT and then there are other hotels who don’t want any part of it – they want an old-school, analogue experience because people are paying £500 a night and they are delivering a very different lifestyle experience. We’re all fairly tech-savvy – and we’re mostly around the age of 40 – and then you have the Millennials, who are not getting any younger. You wonder whether all this will go full-circle because we’re constantly looking back even though technology is moving forward. I’m always quite disappointed by how retro everything is! You can bet your bottom dollar that in 20 years’ time we’ll have all this technology and everyone will be pining for a bell push!
We move on to talk about the experience and the spaces beyond reception.
Robert: Public areas, the use of interactive screens – these will continue to be extremely important.
Phillip: We’ve had clients and brands whose whole driver for some of their public areas and communal spaces is what they call the ‘Instagram moment’. So, someone sees something and they instantly take a photograph of themselves, posing in the space. You can have a lift lobby where you have a medieval backdrop and a helmet you can put on – and this then becomes instant marketing for the hotel.
David: It’s important to remember though that we already have people going to hotels as part of leisure stays wanting to digitally detox – they’ve got digital burnout already! People will still want a certain amount of digital experience when they’re staying for business – or if they’re under 30 – but for a lot of people staying for leisure, they’ll want less of that.
Stephen: There is a bit of a backlash towards technological solutions – because they don’t always work. A lot of the systems out there aren’t anything like as good as, say, an Apple.
“Looking at London, we’re talking about mass urbanisation – how we’re going to get 50% more people in London by 2050. Just think how many people that means will be in this tight environment. You’ve then got hotels that are purpose-built to act as a hub. If you think about how Asia uses its hotels – and Singapore especially – it’s become part of the family thing. You all go out on a Sunday to the hotel restaurant. If you think about how the workplace is going – how we’re using offices less and less – and we’re using hubs instead, you can start thinking about the hotels as hubs. You can look at the meeting room facilities on offer – like the Hoxton is doing really well”
Ben: We certainly see that in terms of the supplier market. You have a lot of hotel brands working with younger brands. We try to provide a differentiation between products to suit the designs – but we also have a common theme running throughout. The challenge for us is to try to meet the different briefs – either keeping it simple or giving a little more of an experience.
Volker: You want technology that makes things easier – not more complicated. It is so annoying when technology makes your stay more complicated – light switches are a classic example of this, as are bathroom products, of course.
Robert: Another big issue, especially in London, is security. You have card readers in the lifts to stop the wrong people getting up to upper floors, for example.
All this costs, of course. We ask how – or indeed if – budgets have changed dramatically over the past few years.
Richard: I think this very much depends upon the client – the owner. A lot of hotels are landmark buildings and their owners are often willing to spend a lot of money just getting a hotel up to a certain standard. Sometimes the budgets can be quite large. Owners want to make a statement. We’re working with hotels right now where the finishes are extraordinary. You have to sit down with the purchasing people, the architect and the interior designer – and getting the link between the architect and the interior designer is important. You’ve got to generate the budget and you need to develop the brief properly – you have to cost everything as early as you can. That can be frustrating for a client because they want to know the costs even earlier. You’ve often got to try to curtail their enthusiasm. Like I said, we’ve got clients who really want to push boundaries and make a statement.
Phillip: We had an experience where our client was a city council and we were trying to come up with a concept, but we were extremely mindful of the budget, which was 3-star – but the brand was 4-star. So there was this constant battle. The hotel brand weren’t prepared to bring money in – but the council needed the brand for their business plan. It was a strange experience and a bumpy road for a while!
David: There’s still a huge disparity between where brands spend their money – and it’s not just driven by whether one is 3-star and another is 5-star. It’s driven by whether they are service focused or food and beverage focused – or indeed focused on the quality of the mattress or the bathroom fittings. This is a big deal