PHILADELPHIA—Branded hotel development typically comes in clusters—region by region, city by city—to make efficient use of the personnel and infrastructure behind each box.
Or at least it used to. A number of nimble upstarts are hoping to buck the trend in favor of worldwide expansion in the global economy.
“Traditionally you build in a location or region you can handle,” explained Jason Brown, acquisitions and development director of Yotel. “Today you’re seeing a couple of crazy people that say, ‘I need to grow really fast worldwide, and I need to own what we think of as the new market pulp.’”
Yotel is executing on the latter strategy. With properties in London Heathrow Airport, (London) Gatwick Airport, Amsterdam Airport Schiphol as well as New York City, the company’s development team isn’t as concerned with concentration in one region as it is with representation in several, Brown said during a panel at the Independent Lodging Congress.
Atop the list are: North America (with a focus on the United States), Europe (the United Kingdom in particular) and Asia (Singapore in particular). Key gateway cities are the focus, as they’re more likely to welcome inbound Asian travelers from whom Yotel draws cultural cues in its design aesthetic, Brown said.
CitizenM’s development strategy mirrors that of Yotel in many ways, explained Edwin Hendriksen, senior VP of development and investments, North America, for CitizenM. Executives are targeting key gateways that see inbound and outbound international travel. That thousands of miles might separate each property is OK—at least in the early goings.
“We are trying to build this global brand so that when they are looking and say, ‘I want to go to Amsterdam and be there for a few days,’ we’re hopefully top on that list,” he said.
Both men spoke of “digital nomads,” or those who lack a home base and instead move from location to location. Brown envisions a future in which Yotel properties serve as their landing pads.
“As airfare decreases and the accessibility of these locations becomes so much easier than it even is today ... that’s the kind of customer that we want,” he said.
Hendriksen’s outlook was hampered by reality.
“We’d love for them to be a CitizenM customer that moves around, but realistically they’re probably going to mix it up” and stay at other hotels and brands. Such is the nature of the target customer base, he said.
Trendy public spaces are significant drivers as well, both executives agreed. Not only do they draw paying guests, but they also lure locals and guests at other hotels, too.
That’s marketing and buzz that would cause other hotel operators to drool, Brown said. It also drives Yotel’s relevance.
“Unless we’re in these cities and have a presence there, we will become irrelevant,” he said.
‘Micro’ but mighty
Well-designed publics spaces complement smaller room footprints for Yotel and CitizenM, which have emerged as hallmarks and targets for criticism from some naysayers, the panelists said.
Both are trying to shake the label of “micro” rooms.
“‘Micro’ doesn’t feel quite right to us,” Hendriksen said. “We like to refer to it as efficient type rooms.”
What they lack in size they make up for in value, he added. CitizenM touts luxury-level amenities, such as high-thread-count linens and duvets, and tech touch points integrated throughout.
“There’s a value proposition, and our guest ultimately is a guest that has a different definition of luxury,” Hendriksen said. “People are rethinking what is luxury and what is value. We try to deliver this experience that’s efficient that has value.”
That means stripping away most of the services and amenities that were once mainstays at most full-service brands, he said. Guests hardly use them, so it doesn’t make sense for owners to pay for them, he added.
Executives at Yotel, whose pod-style rooms originally were inspired by high-end airplane cabins, are trying to shift the marketing message from size to technology, Brown said.
“We’re going to move off of ‘we have small rooms’ and move more into where we think the industry is going into the digital space,” he said.
The pitch to investors, however, is staying the same, Brown said. A typically Yotel can fit 50% more keys than would the same footprint for a typical hotel chain brand. “From a real estate perspective, it works fantastic.”