Is the Traditional Hotel Chain Dead?
Oh, how the world of travel has changed. If you remember the 1990s, you recall that booking a hotel was once a vastly different affair than it is today. Nearly every accommodation looked like the next—it hardly mattered whether you were in New York or New Delhi. There was room service and a restaurant (likely of the buffet variety), and a concierge whose limited services were in many cases travelers’ only connection to the destination just beyond the hotel doors.
Fast forward to 2018 and the travel industry hasn’t just changed—it has expanded to greater territory than we ever thought possible. There’s an app for virtually every traveler’s need, whether you want a penthouse tonight or a reservation at the hottest new restaurant in town. And the demand for authenticity—not just the canned guide-book-style suggestions of days gone—is at an all-time high. So where does that leave the traditional hotel? And how can it remain relevant in a world where digital disruption is redefining entire industries?
Hospitality legend Ian Schrager—whose cutting-edge hotels are often social hubs for tourists and locals alike—believes that adaptation is essential. “Everything changes,” he explains. “Cars change, fashion changes, kitchen appliances change—and hotels have to change and keep up the pace.”
Modern accommodation options such as Airbnb are an obvious threat to the industry, but Schrager is quick to point out that hotels can offer what these services cannot: an experience. “The only way that hotels can compete is by offering the socialization and communal aspect that Airbnb cannot,” he explains. “This along with the level of service.”
Schrager is widely credited for introducing the boutique hotel concept (which received a lot of skepticism at its inception during the early 1980s) and his latest venture, Public, was developed with equally revolutionary ambitions, as a response to the threat of online booking services.
Public’s ethos is one focused on the democratization of luxury, making it more accessible and attuned to evolving consumer preferences. “New hotels need to respond to how people are today,” Schrager says. “Luxury now doesn’t have to be expensive. It’s not just for the rich—it’s a state of being.”
At Public, there are no superfluous five-star fixtures; you won’t find bone china, Egyptian cotton sheets, or suited-up bellboys rolling your bags for a tip. It’s all about providing service, style, and spirit for a reasonable price. And if you’re guaranteed a great experience for a similar cost, there’s really no incentive to roll the dice and stay in someone’s home instead.
Philippe Gombert—president of the Relais & Châteaux collection of restaurants, boutique hotels, and resorts—believes that providing an effortless experience is the key to 21st-century hotel success. “When you rent an apartment, you have to weigh up the pros and the cons. Do I want to clean during my holiday? Do I want to cook? Where can I find a good spa if I want to relax? Where can I swim? [As a hotel], you need to simplify your client’s life and guarantee them the level of quality that they expect.”
Though Relais & Châteaux is more than 50 years old, its concept—a network of unique one-off hotels around the world—captures the prestige and sense of place that modern travelers demand. “We strive to share our passion for a place, its particular culture and cuisine,” says Gombert. “Relais & Châteaux can offer rare, authentic life experiences that are genuinely indulgent.”
Way up in the heavens of the luxury hotel game is Aman, the innovative chain that has been setting a new tone in travel since its first property opened in Thailand in 1988. The brand’s die-hard fans follow it around the globe, from Cambodia to the Caribbean, embracing each new property for its deep connection to the destination in which it resides—something, Aman’s chairman and CEO Vladislav Doronin says cannot be captured at an Airbnb.
“Airbnb is not our competitor,” Doronin explains. “ We pay attention to details—we don’t just sell accommodations. We are known for offering adventurers the chance to experience intimate hideaways closely linked to areas of outstanding natural beauty or UNESCO World Heritage Sites.”
It’s safe to say that the brands at the top of the food chain—including other favorites like Belmond and Dorchester—are generally unaffected by the competition of online booking services. It’s the same case with refined boutique brands, such as Gurney’s (which has been the only luxury beachfront hotel in the Hamptons for decades) and the Goring (a London legend with a longstanding royal pedigree). But, in this current global climate of shared economies, it is the standardized hotel chains that are most at risk.
Traditional big-box hotels are no doubt fighting to remain relevant at a time when authenticitiy and innovation outweighs obsolete measures of luxury: Guests are no longer impressed by quantitative perks like thread count and square footage. Rather, the new generation of discerning travelers are in search of inspiration and escapism—the very qualities that ensure a hotel in Shanghai looks nothing like its counterpart in Chicago.
Philippe Gombert has some sage advice for improving the traditional models. “To remain competitive, hoteliers have to keep investing in the amenities of their properties to satisfy the most discerning clients, along with investing in the development of experiences.”
Ian Schrager, meanwhile, believes that catering to increasingly informed and sophisticated travelers is vital. “If you create novel, elevated experiences—a really special place—people will have a special time.” And if guests have memorable experiences at hotels, the industry will continue to attract business, regardless of the rise of new competition.
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