In Newsletter #42: The history of boutique hotels | Tech's big players converge on travel | Hotel brand as platform play.
So, not only are big tech companies entering our beloved hotel space with the likes of Facebook and Uber turning their attention more and more to travel (#2 below) but I love the recent moves by West Elm and Restoration Hardware to build their own hotels (#3 below). It prompted a very funny thought exercise with our team trying to identify which other household names would be next. If Restoration Hardware can leverage hotels to help them sell more furniture then why can’t Whole Foods (food), Samsung (electronics), Casper (bed mattresses), and Ikea (kitchens and cabinets) follow suit? If you read #3 below, please respond with your best (and worst) ideas!
60,000 words on the history of Boutique is the incredible feat Skift just pulled off and we are very proud to sponsor this effort, led by Deanna Ting (#1 Below). Boutique is such a special segment of our industry that everyone can learn from and what better way to understand it than to dive into the history of how Boutique came about in the words of those who pioneered it?
Lastly, I will be heading home to London next week and stopping by HITEC in Europe on Wednesday, so reach out if you’d like to connect.
HIGHLIGHTS FROM THE WEEK'S NEWS...
What makes boutique boutique?
Why it matters:
Since our first newsletter (almost two years ago!), we’ve been commenting on the industry’s seeming-obsession with the boutique movement. Indeed, many of the newsworthy industry events of the past two years have in some way revolved around this widely held belief that “boutique is better” (a sentiment borne out by the numbers). From IHG’s purchase of Kimpton, to Accor’s acquisition of FRHI Holdings Ltd. (the parent company to the Fairmont, Raffles, and Swissôtel brands), to the Marriott-Starwood merger (the Starwood hotel group includes many strong players in the lifestyle brand category, such as W Hotels and Aloft), to the rise of Airbnb (whose popularity many say is based on the authenticity and personalization of experiences it provides - a hallmark of boutique) - it’s clear boutique is having a moment.
But boutique has always been special, as Skift details in their 60,000 word deep dive on the history of the boutique hotels movement in the United States. For the Complete Oral History of Boutique Hotels, journalist Deanna Ting interviewed more than two dozen founders and key players (including Ian Schrager, Barry Sternlicht, Chip Conley, Niki Leondakis, and Wade Wiegel) to tell the rich 40-year history of the movement that transformed how we travel.
What makes a boutique a boutique? Design-centric, intimately sized, and impeccable service are all imprints of boutique, but there’s also a more intangible quality to a good boutique - the way it makes you feel. And it’s the latter characteristic that’s increasingly becoming the real differentiator, as the boutique moniker becomes so pervasive to lose much of its meaning (a point Leondakis made herself at the Skift Global Forum in October of last year) and which we covered in Newsletter 33).
What does boutique mean to you? Read the report, and let us know what you think - we’d love to hear from you.
Tech’s big players converge on travel
Why it matters:
Travel continues to be a fertile area for tech innovation and a priority for tech’s big players. News broke earlier this month that both Uber and Facebook are introducing new features to their apps that aim to improve the travel experience (in the case of Uber) and take advantage of our travel predilections (in the case of Facebook).
Uber is planning an early April launch for their redesigned “Trip Experiences,” which aims to turn the Uber app into a “content marketplace.” The app will serve riders a feed of entertainment as well as contextual information, all in partnership with third-party content providers and apps. (Contextual information might include Instagram searches of the destination they are headed to, or, in the case of Uber Pool rides, mutual Facebook friends with other passengers). The goal is to grow engagement in the Uber app itself (which they might monetize in the future) as well as attract and retain users at a time when Uber is suffering from a highly-publicized consumer backlash and company turmoil (Uber’s President resigned only last Sunday, citing differences over “beliefs and approach to leadership.”)
Facebook’s City Guides feature, meanwhile, positions the company in direct competition to the OTAs. The update, which was quietly unrolled at the beginning of the month, enables users to book hotels and restaurants, and message or tap to call other hotels, restaurants, and tours and attractions. Many of these features already existed on the Facebook platform in some form, but this is a concerted effort to “centralize [them] in a way that is more personalized and relevant.” In addition to brushing up against the OTAs with this move, Facebook is also challenging Google, which launched its Google Trips app in September (we previewed the Trips app in Newsletter 25). (Google, however, doesn’t yet facilitate booking on their platform.) Google itself followed other major tech companies, like Foursquare and TripAdvisor into the travel planning space.
While these feature updates from Uber and Facebook don’t have direct implications for hotels, their use of user data to personalize and improve these travel experiences should be of interest to hotels. At the very minimum, hotels should look at being involved as content partners (in the case of Uber) and as advertising partners (in the case of Facebook). But beyond simple partnership opportunities these moves are a reminder the user experience in travel is constantly improving because of the rich amounts of data these companies have on their users (rich troves of travel data, in the case of Uber, and even richer troves of social and behavioral data, in the case of Facebook). How can hotels be similarly innovative (and possibly leverage their own troves of guest data) when it comes to the guest experience?
Household Names Turning Into Hotels
Travel & Leisure | Why Popular Brands Like West Elm and Equinox Are Opening Hotels
Why it matters:
Every few months, it seems, another popular household name is opening a hotel. Is this trend here to stay? And what’s behind it all?
We’ve talked before about the boundaries of “hospitality” expanding, but in those cases it was industry-adjacent businesses like residential apartments, and even Airbnb, looking to learn from hotels to improve their own service offering. This is a different case.
West Elm and Restoration Hardware’s entrance into the hotel space is incredibly interesting. For one, it’s aligning those companies’ business models to the platform approach, something we’ve written a lot about about. But while we talk about the platform approach with regards to uniting departments, these two retail giants are creating a platform by finding synergies between two entirely different businesses. The cost savings here are clear -- supplying their own furniture to new hotels will really cut down on hotel opening costs. The question is whether their vision of guests loving the furniture and taking it home with them (or buying it for their own apartments in the future) will work. We think it’s definitely worth the try, and a brilliant way to expand a business and brand.
It’s worth noting West Elm and Restoration Hardware are not the first or the last to do this. WeWork opened its co-living apartments WeLive last year. Equinox is breaking ground on their first hotel in 2019 and will surely offer an unparalleled fitness lifestyle experience, not just by having the best gyms in their hotels, but also because of all the interesting things they can potentially do with your health and training data. Going further back, you also have Virgin Hotels, which drew inspiration from Branson’s existing travel and media empire, and Nobu Hotels, a luxurious marriage of sushi and sleeping.
So, with all these businesses crossing into hospitality, which will be the next to join us in this wonderful world of hotels? We’d welcome some serious and some ridiculous ideas from you please. Like Samsung opening hotels with the best entertainment technology (serious) or Toto offering the best in hotel toilets (ridiculous).
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