Seat 2B By Joe Brancatelli
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Hotels Are Changing, Whether We Like It or Not
October 13, 2016 -- As I approached the long front desk of a hotel last Friday evening, a bearded gent approached me brandishing a customized iPad with a credit card reader. Damn, I thought to myself, another useless meander into the future of lodging.
I dropped my bags where I stood, which forced passersby to navigate around me. The bearded gent gave me a cheery welcome and gleefully announced, "I can check you in!"
I looked at him ruefully and said: "We're really going to do this? With the front desk right over there?"
"Absolutely," he said. "Newest thing from corporate."
I sighed and handed him my credit card and the card proving my top-level elite status in the chain's frequency plan.
"Oh! Okay," he said. Without uttering another word, he and his iPad beat a retreat to a check-in station behind the long front desk.
I picked up my bags and followed him to my side of the desk.
"Isn't this nice?" I said with a touch of sarcasm. "You have a surface. I have a surface. We're out of the way of people."
The bearded gent didn't answer because he was rifling through a stack of prepared check-in paperwork. He found mine, noted that I'd been upgraded to a suite, given breakfast coupons and parking passes — all perks of my status — and handed the packet over the counter along with my credit and frequent-stay cards.
What do we learn from this little tableau? Only that hoteliers are intent on changing, even if we don't need to change — and even if the change makes simple tasks more complex.
The keys to check in
As my weekend experience showed, hoteliers spend a disproportionate amount of time on the check-in process. That's because we business travelers hate the so-called "first 10" minutes in a hotel and want the welcome formalities to be over fast.
Traditional metal keys and handwritten guest cards long ago gave way to plastic keycards and computers. Even the front desk itself is being shrunk and, in some cases, eliminated. In years past, hotel chains have tested lobby signboards with grab-and-go keys. Some too-cool-for-school hotels continue to tinker with the roving-clerk approach and some swanky places ostentatiously do their check-in formalities in your room.
But it won't be long before check-in formalities will be handled electronically. Phone apps sponsored by hotel chains already allow you to check in remotely, choose your room and even order in-room amenities. Soon, our mobile device will be our room "key," just as you already can use your smartphone to display your airplane boarding pass. Several chains are now testing the concept.
Hope you like cozy
My suite upgrade last week was unnecessary and I told that to the bearded gent. I was only going to be in the hotel overnight for about a dozen hours and didn't need a two-bedroom/two-bathroom aerie with multiple sofas and a dining room. Generally, however, we want larger accommodations when we can get them. In fact, I've never heard someone tell me they prefer smaller guestrooms.
But that's what the hotel industry is going to give us. Really tiny rooms, in fact.
A few weeks back, a recently opened city-center property assigned me to an accommodation that measured 160 square feet, about half the size of the average U.S. hotel room. To make the room seem, well, roomy, designers created a closet with no door, a bathroom with no tub, a "desk" that was actually a 12-inch ledge and a desk "chair" that doubled as the ottoman for an armless love seat. The nightstands, lamps and even the mini-fridge were bolted to the wall and raised off the floor so guests could stash luggage underneath.
Why go to rooms the size of college dorms? Money, of course. Smaller rooms mean you can shoehorn more accommodations into a smaller real estate footprint. The new Moxy brand from Marriott, for example, promises developers that "less is more" and rooms measure just "183 square feet of coziness." The new Tru brand from Hilton promises "purposefully minimal" furniture and rooms as small as 231 square feet.
Live in the lobby
With guestrooms shrinking, hotels admit their accommodations won't be places where you'll want to spend much time. The solution? Scrap traditional lobbies and turn them into hang-out spaces.
You may or may not believe hotels when they claim millennials love and expect Starbucks-like lobbies where they can work, mingle, socialize and see and be seen. But one thing you should take to the bank is the hotels' desire to bank some cash from their new-wave lobbies. Sure, hotel lobbies at some chains now feature pool tables, communal tables with power receptacles and USB ports and comfy seating that make you feel like you're in Central Perk, the coffeehouse from "Friends." But the goal is to sell you stuff: drinks from the lobby bar, edibles from the kitchen or the grab-and-go market and, of course, all the overpriced coffee you can drink.
No room for room service
With a switch to more social lobbies peddling food and drink, hotels will finally phase out room service, always a money-losing operation. The switch is already underway and many properties that once offered 24/7 service have slashed hours.
The upside? Hotels seem to have adjusted to third-party delivery services such as Seamless and Grubhub. Most grudgingly accept that guests will call out for food and have it delivered to their guestroom. Or, as one hotel general manager told me recently: "Uber is getting into food service delivery. How could I stop that even if I wanted to?"
A blizzard of new brands
The Marriott-Starwood merger completed last month created a behemoth with 30 separate (and relatively) distinct brands. Some business travelers assume that the merged company will thin out and rationalize the brand portfolio. But that fundamentally misunderstands the economics of the lodging industry.
The big chains whose names you recognize — Marriott (NASDAQ: MAR), Hilton (NYSE: HLT), Hyatt (NYSE: H), InterContinental (NYSE: IHG) and more — don't build their businesses on real estate. They own few actual hotel buildings. In fact, they don't even manage many hotels anymore. They are, primarily, franchisers of brands.
Why keep inventing brands? To flood a zone — a state, a city, even just a neighborhood — with properties that will pay franchise fees. But you can't throw five or 10 or 30 hotels named Marriott into a zone. The franchisees have geographic exclusives on a particular brand name. But if you keep inventing new brand names, you can continue to franchise to multiple hotel owners in the same zone.
Bottom line? More hotels with more new brand names for years to come. The blizzard of brands may be confusing, but it'll help keep room rates down, too.