Is the Future of Hotel Brands Non-Hotel Brands?
Hospitality Markets are Changing
When a disruptor brand enters a market, the traditional operators are forced to take stock and respond. By their very nature, a disruptor product has re-written the customer experience in such a way that it appeals to the frustrated and disillusioned consumer pretty much instantly. And if the experience stands up, the consumers can quickly become advocates.
This seems to be happening in hospitality, particularly within the hotel experience. We are currently seeing non-hotel brands setting up hotels as an extension of their main customer experience. Versace, Bulgari and Armani have been leading the way in the luxury sector, and we've also seen music giants U2 and the Libertines dabble too. Sports stars have also dipped their toes with Ryan Giggs and Andy Murray launching their own hotels.
Now, it will be tempting for traditional hoteliers to write off these infiltrations as cowboy and 'one-off' fads. And this may be the case for some of the disruptors, but not all. Take Muji for example, a Japanese retailer that stands out in its market for quality, minimalist homeware products. Now with two brand new impressive hotels on the go, this 'extension' effort to their main brand doesn't seem too out of place. In reality, it may serve to become an 'evolution' to the brand rather than simply an 'extension'.
Which hotels need to be worried?
This is where the biggest threat for the traditional hotelier will come from - brands that already have the shared values and tools to run a stand-out hotel. There is no doubting the jarring aspect of a retired footballer launching a hotel that has nothing in common with their career apart from the framed photos on the walls and trophies in the lobby. I mean, it's just a famous name on a building. In sharp contrast then, are the brands that already deliver a hospitable, clean and simple customer experience. If Apple, Google, Sony or Starbucks began to delve into the hotel market, they would have a genuine opportunity to unsettle some household names.
And why not shake up the standard hotel guest experience? After all, the basics of hospitality are still being ignored with customer rants and complaints continuing to boom across the mid-market hotel business. And it will be the mid-market that needs to keep an eye on this the most. People who want budget stays will usually stick to the price-range they're used to. Those looking for topline may be tempted by a luxury stand-alone disruptor, but it will take some tempting. But those shopping around the mid-market could quite easily be led to a differentiated experience if the price is similar to what they're currently paying.
Is this the start of a revolution in branded customer experience - a blurring of market sectors, so that no longer you’re just experiencing a Muji store, but Muji the brand, and all that it stands for? Maybe it is. Whatever happens it'll be interesting to see how the traditional hotel brands respond.