Brands Take Charge
Hotel brand companies were quick to realize the potential of the burgeoning Gen X travel market, and several of them have introduced new products aimed, at least in part, at this growing demographic. Hyatt, Starwood, Choice Hotels and InterContinental have introduced new or re-positioned brands in the past two years they hope will replace Courtyard by Marriott and Hilton Garden Inn as flags of choice for this new class of business and leisure travelers.
NYLO Hotels, an additional offering not connected to a major hotel company, also hopes to compete with the big chains in penetrating the Gen X market. Several of the largest brand companies — Hilton, Marriott, Cendant and Carlson, for example — have yet to address the topic through the introduction of new brands.
All of the new Gen X-oriented flags share several common themes in terms of design, public spaces, use of technology and food and beverage offerings. However, each new brand approaches the question of how to serve Gex Xers in a different way. And all of them insist the new products will appeal to a wide range of travelers, including the still-dominant Baby Boomers.
Starwood Hotels & Resorts made the biggest splash with the introduction last September of aloft, a brand management likes to say carries the DNA of its highly successful W Hotels chain. While aloft skews a little younger in its demographic appeal, it is also a product more suited for suburban and second-tier urban development than W.
Starwood did a lot of customer- and developer-based research to devise the aloft concept. A 25-member developers board of advisors helped Starwood create the chain, including many of the structural elements. More importantly, the group advised on ways to keep the product cost-effective. Starwood says aloft can be built for around $95,000 a key, plus land, yet command ADRs of $125 or higher.
The focus of aloft is both the guest units and the public spaces. As the name implies, guestrooms have the look and feel of an urban residential loft: nine-foot-high ceilings to maximize natural light, the bed facing the window instead of a wall, oversized showers and a large workspace.
It's the public spaces where aloft gets its personality and appeal for the highly social Generation X. relax and w xyz are the lobby and bar areas that will be central gathering spots for guests, while re:fuel is a grab-and-go food and beverage area designed by celebrity chef Jean-Georges Vongerichten. Through lighting, music and aromas, the ambience of the public areas will change from day to night.
Starwood executives report strong interest in the brand. Paul Sacco, vice president of development for North America, says 12 to 15 franchise applications are pending and more than 100 deals are in the pipeline. The company has set a very aggressive goal of 500 properties open by 2012.
“Interest so far has been in urban markets, some high-volume suburban locations and high-visibility airport sites,” says Sacco. “And it's not just traditional hotel owners. We've had a lot of interest in the product from lifestyle mall and retail developers.”
A number of high-profile developers have jumped on the bandwagon. Gatebridge Hospitality says it will build five alofts in the Dallas/Ft. Worth area, while Noble Investment Group plans a 176-unit aloft as part of a mixed-use entertainment and retail complex in Charlotte. Other projects are in the works in Boston, Baltimore, Phoenix and Lincolnshire, IL. Starwood is also developing five company-owned properties.
Global Hyatt carries a big advantage into the race for supremacy among new hotel products aimed at Gen Xers. While most of the other brands will rely on new construction, Hyatt has 140-plus AmeriSuites properties it plans to convert to Hyatt Place, its new lifestyle brand. Conversions have begun on some of the 62 properties Hyatt owns, and franchisees will follow suit shortly. The company will also build additional units and selectively franchise the concept.
According to Hyatt Senior VP Jim Abrahamson, Hyatt Place will appeal to both business travelers and leisure guests in the Gen X demographic. “Some Gen Xers are turning 40, and many of them have started families, and that means vacations and getaways,” he says. “We've built this product to appeal to guests on a seven-day-a-week basis.”
The Hyatt Place concept aims to create a distinction in five areas of the hotel — arrival/departure, bedroom, bathroon, f&b and the gathering area. The suite-like guest units are 25 percent larger than typical hotel rooms. Features include upgraded bedding, granite countertops, wet bar and walk-in showers in a design package that is cool and relaxing. An in-room media center has a 42-inch plasma TV and easy connections for electronics that guests bring along.
The gathering area, Hyatt's name for the lobby, is a combination living room, dining area and check-in and -out space. F&b offerings include a complimentary breakfast buffet, coffee and wine bar and a 24-hour food outlet that sells additional breakfast items, sandwiches, salads and snacks.
“If Crate and Barrel built a hotel, Hyatt Place is what it would look like,” says Abrahamson in describing the brand's look and atmosphere. “It's a lifestyle brand that we want to be as relaxing as possible, so we spent a lot of time on what the product feels like more than what it looks like.”
Abrahamson says the company will offer incentives and a financing program to help franchisees convert to Hyatt Place. The company is also working with three partners to develop new Hyatt Places in strategic locations, such as urban areas and markets that are more difficult to penetrate.
Next up for Hyatt is the repositioning of Hyatt Summer-field Suites, the extended-stay brand it bought last year. A prototype of the new product, which will carry many of the same themes as Hyatt Place, will be unveiled in June.
Later this year in Boise, ID, Choice Hotels will open its first Cambria Suites, the lifestyle brand it has been developing and nurturing for the past two years. Through mid-March, Choice had signed 18 franchise agreements for the product.
Choice used an interesting focus group — its entire franchise community — to test the Cambria design and concept. At its annual convention two years ago, 5,000 licensees walked through a Cambria model room and were asked to make comments and suggestions, resulting in several significant changes to the design. A design-oriented, rectangular sink looked good but with a depth of just two inches, it was impractical. Franchisees also suggested the guest units be equipped with flat-panel TVs instead of traditional sets. Licensees again got to voice their opinion on the updated design at last year's convention.
The select-service, all-suite Cambria has a number of innovations, both in the guest units and in public spaces. The suites are 25 percent larger than a standard upscale room and include distinct living and sleeping areas, each with a flat-panel TV. Other features are a pullout sleeper sofa, lounge chair, microwave, refrigerator and a movable desk. Technology goodies include mp3 jacks and free wired and wireless Internet access throughout the hotel.
The Cambria Suites two-story lobby is a series of zones separated by different types of flooring instead of walls. In addition to a front desk, the lobby has a media wall with a 60-inch plasma TV and a convenience store called Refill. The lobby lounge, Reflect, is perfect for multi-taskers of all generations: guests can get a snack or drink, access a wireless hot spot, meet with others or just relax. Revive, the property's fitness center and swimming pool, completes the public space.
Following Boise, the next Cambrias to open will be in Green Bay, WI and Savannah, GA. Others in the active pipeline are in Madison, WI; Ft. Myers, FL; Akron/Canton, OH; Phoenix; Charlotte; Columbus, OH; the Denver Airport; and elsewhere. In all, Choice expects more than 50 Cambria Suites properties will open in the next two years, primarily in airport, suburban and some center-city locations.
Choice also signed agreements with two companies for multi-property projects. Illinois-based Swift Hospitality intends to build five Cambrias in and around the Chicago area, while Badger Midwest Holdings signed a deal to develop 10 properties in Wisconsin, Florida and Minnesota.
Fledgling lifestyle brand NYLO got a big boost last month when Lehman Brothers agreed to be an equity investor and strategic partner in the company. Industry veteran and NYLO CEO John Russell says the relationship will help the flag accelerate its growth plans.
“Initially, Lehman will be an equity partner with us on our first five to seven properties,” says Russell. “The relationship will also help us fund our operating company and our franchising efforts. With a partner like Lehman, we're confident we can reach our goal of 50 properties by 2010.”
NYLO may be the most radical of the new products aimed at Gen Xers. Like its name (New York + loft), the design borrows heavily from the residential loft aesthetic. Guestrooms will seem larger than their 300 square feet due to 11-foot-high ceilings and six- by five-foot windows. Heart of the room will be combination office and entertainment center with flat-screen TV, CD and DVD player and free high-speed Internet connections.
Designer Stephane Du-poux, whose projects include a number of upscale restaurants and nightclubs around the world, created the furniture and lighting package, which includes a semi-platform king bed, sofa and an oversized movable desk. Original artwork, often from local artists, will be used in both guest and public areas.
The Loft is NYLO's version of the all-purpose f&b and gathering place. The multi-purpose space will be part lobby, part coffee bar and part lounge that will change in atmosphere from day to night. Components will include a 24-hour restaurant, bar, business center, wireless Internet hot spot, library, game room and sundries shop. Each property will also have a fitness facility with showers and steam rooms.
Russell says the product's design — which incorporates lots of exposed surfaces and little use of crown moldings, drywall and floor coverings and wallcoverings — will enable it to be built for about $90,000 a key, plus land. Expected room rates are $115 to $135. Several prototypes of the product are available, but Russell says they will all share the same interior footprint. Typical NYLO will have 135 to 185 rooms in three to five stories.
Groundbreaking for the first NYLO will be in May. The property in Warwick, RI is along the Pawtuxet River and is part of a residential, retail and restaurant development in a redeveloped textile mill. The property should open in mid 2007.
Russell says the company will soon unveil a model room at its Atlanta headquarters, which it will use to get feedback from consumers and developers. The company hopes to begin franchising the product within six months.
InterContinental Hotels Group
One new product and one repositioned brand mark IHG's thrust into lifestyle lodging. The biggest hype has been for Hotel Indigo, a two-year-old boutique brand that IHG management says is not just aimed at one demographic.
“While Hotel Indigo has a storyline that will intrigue them, we're not marketing the product just to Gen X travelers,” says Jim Anhut, senior vice president-development for IHG. “Each property is interpreted for its own marketplace and range of customers.”
Indigo is probably the most fully formed of the new brand concepts. In developing the product, IHG borrowed from retail design and marketing as well as ancient philosophies that stress balance and nature. The retail inspiration means certain elements of each Indigo property — artwork, area rugs, bed linens, music and flowers — will change periodically, just as retail stores change their windows.
So far, Indigo has been a conversion brand. Three are open, with six to 10 more slated to debut this year. Last fall, the chain unveiled a new-build design concept. It also launched Interpret Indigo, a development philosophy that allows developers and designers to fashion their properties around regional tastes and expectations. Each property will have six or seven hallmark design elements, but as Anhut says, “guests will be able to have different experiences in each Indigo they visit.”
IHG is also experimenting with its Holiday Inn Select brand as a vehicle to directly address the Gen X market. Chain management is still working on a prototype, but the recast flag will focus on a few elements favored by Gen Xers — technology, fitness, food and brand names.
Guestrooms will feature Internet access (probably wireless), a combination mp3 player and clock radio and branded coffee service from Wolfgang Puck. The properties will have fitness facilities and a Sporting News Grill sports bar with plasma TVs. Other branded items in the hotel will include amenities and a business center.
IHG hopes to finalize the prototype soon and begin conversions of existing Selects and building new ones. The chain now has 90-plus properties.
Visit www.LHonline for more information and related articles.
THE BIG IDEAS
Each of the new lifestyle brands approaches the changing demographics of frequent travelers in a different way. Yet, all of the new brands share some commonalities in amenities, design and development profile:
Some refer to it as a living room; for others it's still a lobby. Hyatt Place calls its public gathering area “a third place.” Whatever, it is a multi-function space in which guests can eat, drink, meet, work, relax or be entertained in any combination. The emphasis is on one space that transforms from daytime (check-in and -out, breakfast, short meetings) to nighttime use (dinner or snacks, drinks, working solo or in tandem, socializing).
Technology is the linchpin for guestrooms in all lifestyle brands. Musts include flat-panel TVs, Internet access and multi-function sound systems for CDs, radio and mp3s.
Food and beverage offerings tend to be grab & go or mix-and-match snack items. Upscale coffee and perhaps wine and beer service are standard.
High-traffic suburban and airport sites will be the first locations for most lifestyle products. Most are all new construction. Eventually, major-market urban locations will be developed, probably through conversions. Development costs tend to hover just below $100,000 per unit, plus land. Most brands expect to command room rates around $125.
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