With evolution, the future is bright for boutique

NEW YORK—For an industry possibly the hardest hit by COVID-19, an industry that lost approximately $1.2 trillion this year, an industry that suffered about 10x worse than the aftermath of the Sept. 11 attacks, leaders are hopeful to say the least.

“Many say we won’t recover until 2024; I’m a little more optimistic than that,” said Roger Dow, president/CEO, U.S. Travel Association (USTA) in his keynote address during this year’s Boutique Lifestyle Digital Summit, which was held as a virtual event.

For recovery, Dow said, the industry will need to get Congress to act, to get PPP extended through this year, and also to secure liability protection for hotel properties.

“Trial lawyers are just waiting for someone to say that they got COVID at one of your boutique hotels, or on a flight, or at Disney, and to sue them. So, we have to get liability protection just like we had to do for terrorism years ago,” he said.

Dow recognized that it typically takes about two-three years to come back from such an economic blow, but if the industry pushes it faster, he’s confident travel can come back six months faster than it normally would on its own. This means $71 billion to the hotel and travel industry, $63 billion to the overall economy, and 800,000 more jobs.

“I think it’s phenomenally hard to predict sunshine when you’re in the middle of a hurricane,” he said. “After Sept. 11, people said no one will get on an international flight, international travel is doomed, no one will want to get on a plane crossing the ocean, yet it was followed by the greatest years of growth for international travel.”

Then, the recession hit in 2007-2008—a much similar scare—but was followed by 10 of the greatest years the industry has seen.

“Every single month from 2009-2019 travel was bigger than the month before,” Dow said. “That’s why I think the doom and gloom is overstated. You start getting a vaccine, you’ll start getting people traveling.”

Ian Schrager, founder, Ian Schrager Company, expressed similar optimism during his keynote address, noting that those in the lifestyle business think out of the box by nature, which will kick-start recovery.

“Change is the essence of the universe and all down cycles are different, but I’m quite convinced they all wind up in the same place, which is a return to normalcy. Not a new normal, but the same normal we’ve always had, it’s just a question of when. I don’t believe in paradigm shifts,” Schrager said.

Although Schrager believes we’ll return to the normal we’ve always known, things will change as they did post 9/11 and recession, and the industry will have to evolve. Feeding this evolution will be enhanced technology, a shift that Schrager is pleased to see.

“I think the one benefit that the pandemic has brought is that people are always resistant to new ideas, but I actually think the future of the business is invisible check-in and checkout,” Schrager said. “People—because they want to have touchless—are more receptive and open to doing these technology things for the purpose of health. The technology with the check-in and checkout is really one of the great advances for staying in a hotel, not like some of the other contrived technology things like mood boards in the lobby and things that really don’t do anything to improve the stay and experience…Technology needs to make your stay cheaper or easier. If it doesn’t fit either of those two criteria, there’s no reason for the technology.”

For boutique specifically, Schrager advises that its leaders focus on the core values of the unique industry; values that its guests expect, regardless of the economic or social climate.

“There’s no reason to open up a hotel at 20% or 30% occupancy—if there’s no way to make money, what is the point? Especially when you can’t deliver on the brand experience, especially for lifestyle hotels whose very business is based upon the brand experience and product distinction,” Schrager said.

He added, “Don’t be afraid of failure, if you’re afraid of failure paralysis sets in and you don’t try anything new. Doing what everybody else has done but in a different color, accomplishes nothing. Our industry, in particular, has reminded me of elephants wagging the tail of the elephants in front of them and parading around the ring in a circle. Our business, like every other business, depends upon innovation; it always depends on a new guard coming in and starting the revolution again.”

Another revolution is surely here, and while technology seems to be one of the emerging winners, it isn’t the only area of innovation.

Food and beverage—another industry hit very hard by the pandemic—is proving to be an excellent vehicle for creativity, especially in the boutique space.

“Food and beverage is a place within a hotel—big or small—where you can be the most nimble,” said Jennifer Baum, president/founder, Bullfrog + Baum. “You have more opportunities for quick decisions, quick programming that can be used to attract visitors and locals. Before this gets back to normal, we’re going to think more locally. We can use food and beverage to create passionate, local ambassadors.”

Creating a local hub can bring new regulars on-site as neighborhood supporters become mouthpieces, she said.

“We can start looking forward and thinking about ways to engage our current guests, ways to increase future regulars and get people inspired so that when they can travel again, they’re going to choose your property to visit,” Baum said. “What are your neighbors saying they miss? What are trends you’re seeing on social media? Who are your competitors and what are they doing? What can we do that is still on-brand, but that is fresh and new and a way to engage our community? What can we do to add value to our local community now that people aren’t traveling very far? Food and beverage is a great way to do that.”

With the expected being turned on its head, Baum said, hotels should answer these questions and think about more unexpected demand generators like drive-in movie nights, to-go food boxes, and wine and beer tastings and cocktail kits based on locale. The idea is to form bonds and explore synergies, to collaborate with local businesses and cross-promote.

“We can all do this alone and just for us, but I think we all know, we’re small, we’re mighty, we’re strong. But I think we all are stronger when we’re together,” she said.

While the speed of recovery depends on policies and healthcare advances, for boutique, a consistent message reigned clear throughout the digital summit: Remain true to key values.

“Get as much exposure as possible and learn the business from different angles,” said Marco Cilia, founder, Hotel Chapter Roma. “Don’t choose a brand to work for, a salary to work for, choose the people. Go for the people that are going to help you grow and take the next step. Boutique hotels are narrating a story and creating something that’s unique to each property…Boutique hotels are a reflection of the person who created them. It’s about the human aspect and people.”

Schrager shared a similar idea, advising younger hoteliers to explore larger companies before settling on boutique.

“Learn the rules and the reasons for the rules so you can intelligently decide which rules you think are smart and which rules you’re going to break,” Schrager said.

Invisible check-in, plexiglass dividers and cocktails to-go are certainly rule breakers, but the boutique space will never lose its dependency on the human touch.

“It goes through ups and downs and always finds some way to survive,” Schrager said. “In the history of humanity, I don’t think there’s been one event—dating back to biblical times—that has changed things. We always go right back to the way we were; we just evolve.” HB


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