Finance & DevelopmentDevelopmentHotels and the Evolution of Living Communities

Hotels and the Evolution of Living Communities

Chip Conley keynoted the summer 2021 meeting of the HospitalityVIEW working group with reflections on his time as founder of Joie de Vivre hotels, as an early strategic advisor to the Airbnb founders, and now as creator of Modern Elder Academy, a network of new higher education, retirement, and resort industry communities.

Attended by more than fifteen leaders from hotel ownership, investment, and technology, the HospitalityVIEW conversation yielded insights on the future of alternative lodging in the context of shifting lifestyle, workplace, and financial/operating trends.

New Lodging Alternatives and a Sense of Community

Conley began by recounting his experiences as a young founder of Joie de Vivre and as an advisor to Airbnb. “When I founded Joie de Vivre in the 1980s and started talking about ‘you are where you sleep,’ people were confused. People want something consistent, but hotels then thought people didn’t want any surprises. In the 1990s, Marriott conducted a survey that found a third of their guests were ‘experience travelers.’ This is compared to ‘performance’ travelers, who didn’t care as much about the experience as long as the function was good.”

According to Conley, some travelers are shifting toward experiential accommodations, and in doing so, have opened creativity for owners, operators, and alternative lodging providers, as well as challenges. Airbnb is an example, and the “digital nomad” travelers—as Conley noted—created by the pandemic has intensified experiential travel. Conley indicated that some hotels might not have anticipated the needs of this new traveler segment and continue to focus on their already in-place formulas for anticipating guests’ lodging needs.

“The trend used to be about ‘bleisure,’ but bleisure has changed. Guests used to arrive early, stay late. It’s a whole different thing today. The digital nomad has gone mainstream, and one of the things I would ask all of you in the hotel business is, how can you design hotels that are not too expensive with good, flexible spaces? Not just lobbies with co-working space—how can you turn a hotel room into more than a suite with an attached door?”

Conley has developed similar alternative-use concepts through Modern Elder Academy, a hybrid resort and educational community that has 1,250 alumni from 25 countries. Modern Elder Academy makes communities where people stay and learn from peers and instructors. They can encompass a destination experience, a learning experience, and, for owners, a real estate opportunity. According to Conley, “You can have a great resort, and directly next to it is a mid-life wisdom school. People are looking for a transformational travel experience beyond sitting at the pool.”

Different Types of Travelers

The working group discussion confirmed that people are at the heart of hospitality’s future—both the new types of guests staying at hotels and the new types of employees needed to propel tomorrow’s hospitality experience forward. The conversation focused on creative ways to enhance hospitality from within to solve emerging challenges facing the industry, such as the ongoing labor shortage exacerbated by the COVID-19 pandemic.

Working group participants agreed that innovation is necessary to solving the labor crisis in addition to conventional wisdom. As a result, more operators are investing in technology to fill the gaps in their staffing as bookings return but workers do not.

“We can’t hire enough people right now… We literally can’t find them,” said Alex Cabanas, CEO of Benchmark. “By necessity, we have had to force technology into our system to replace the bodies we are missing on property. In the luxury space, particularly, guests still want a high-quality experience regardless of these challenges. It’s forced our hand toward technology.”

With added pressure from guests, hotels moved to digitize their experiences. For example, digital concierge outlets are more prominent to assist guests with questions, address concerns, and provide suggestions to improve their stay directly from a smartphone. Interactions between hotels and guests can be automated, but a team member will need to be actively involved in guest communications to create the best experience possible.

Such innovations provide guests with greater freedom during their stay while limiting traffic to the front desk—echoing the low-touch preferences of the digital nomad traveler. Digital interactions can also be easily logged, allowing multiple associates to assist a guest over their stay. Lastly, this opens a constant line of contact between guests and hotels, giving operators more opportunities than ever to address operational challenges as they arise.

A similar innovation is taking place as the industry moves toward a cloud-based property management infrastructure, modernizing—and sometimes automating—a hotel’s approach to marketing, channel management, and pricing. These investments have the potential update hotel operations and profitability, but changing operations at the property level in ways that take advantage of new technology is sometimes more challenging than the initial investment.

Chris Hemmeter, managing director at Thayer Ventures, wondered if the established industry will be able to fully integrate digital operations, even if budgets allow for it. To do so, they must embrace a willingness to somewhat deter from traditional operations to succeed in a hospitality landscape that has changed.

“We should be leveraging technology as a way to rethink the delivery of the hospitality product, not just apply technology haphazardly with the same operating strategy,” Hemmeter said. “Four or five years ago, we would have looked at a property using technology this way and said, ‘That’s not a hotel, that’s something different.’ But today we are unable to hire at the necessary levels, suffering under the cost of inflating labor.”

Technology on a Sliding Scale

Unfortunately, the barriers to digitization at any level in hospitality remain high across the industry. The factors limiting hotel technology investment could also be short-term and more aligned with recovering timing rather than broad limitations of a hotel’s segment.

Finding a way to effectively approach technology investment is sometimes a challenge for mid-scale and economy hotels, partly because investing in technology is a commitment and hotels need to control their operating margins. Dave Roberts, adjunct professor at the Cornell School of Hotel Administration, opined that smaller hotels should take stock of what technology is available to control costs and leave experimentation to larger properties.

The Future

In his presentation keynote, Conley pointed out that industries ready for change are often focused on the present and can be unwilling or unable to look ahead. While hospitality continues to search for new answers to the labor shortage, on a personal level, many others in hospitality—as in other professions—are searching for new areas to pursue that will lead them in the future.

There is a need for leaders to think more deeply about how to make work and communities in the industry center points of resilience and adaptability for employees and associates at all levels. Doing this while implementing innovations needed to enhance the bottom line and the guest experience at the same time will be no easy task. It’s clear that it’s critical to take the long-term view.

Mike Chuma
Mike Chuma
Mike Chuma is the vice president of global marketing at IDeaS.