Designing today for tomorrow’s hotel


 

Things might be better, or things might be worse, but if there's one thing that is certain, travel post and tourism post-COVID will never be the same again.

 

Against an environment that is constantly changing, where do you start if you are planning a new hotel development or major refurbishment and how do you plan so you don’t fail? 

 

Develop a clear brief

The starting point is the brief.  A hotel should be designed to a brief.  If the hotel development starts with design as the driver, the controlling commercial aspects will be playing catch up. When the commercial aspects do catch up then this often results in a redesign.  It is a case of designing to a budget and not budgeting the design.

 

The design of a hotel, both interior and exterior, is often the most effective way to make an exceptional first impression – a first impression that guests use to distinguish between brands. By incorporating bold and unique designs into a brand identity, a hotel is tapping into our most basic senses, an important step towards maximising the guest expectation of the value proposition and setting the hotel apart from an increasingly competitive environment.

 

The brief needs to set the design goal posts so that designers are given clear parameters to design within. The brief therefore needs to be clear and concise.  

Influences and inputs to a brief

The cornerstone of any brief needs to be a preliminary feasibility, which will have regard to the current hotel market, sources of demand and local competition, and the projected outlook for both the market and the project specifically. 

What is the market?  Is it corporate, leisure, MICE or a mixture of some or all? Who are the guests and what are they looking for? What is the average length of stay? What will they pay per night?

The Millennial traveller, defined by age as being born between 1980 and 2000, already make up over one third of the world’s hotel guests and with predictions that this would exceed 50 per cent by 2020.  In a post-COVID world, millennial travellers are expected to represent an even higher proportion of the world’s hotel guests, as older generations shun international travel, particularly to destinations which are perceived to be higher risk.  

Key attributes like design, experience, technology and perceived value are imperative for attracting the millennial traveller.  There has never been a demographic that is more connected, digitally savvy and wanting contemporary design, high quality amenities, smart technology and locally inspired ambience, all wrapped into a single hotel experience. In return, satisfied millennials will actively promote hotel businesses and experiences on social media channels, thereby generating powerful “word-of-mouth” marketing for the hotel.

 
Built it, why didn’t they come?

A common trap for developers is to gravitate toward developing a luxury hotel: “if I build something luxurious then guests will pay!”.  However, each hotel market has a room rate ceiling and few guests will pay over that level – the result is discounting from the hoped-for room rate to meet the market.

In simple terms, if building houses to rent in a particular suburb, the houses will achieve a range of rents which will cap out.  A luxurious mansion with five bedrooms, lagoon pool and sauna in a local market will attract a higher rent than the existing stock, but will it provide sufficient return on capital invested?

The question is what is the maximum rent that the market will pay and that will determine the level of capital expenditure. That formula also applies to hotels. What will guests pay per night on average and that will determine what my capital expenditure should be.

 
Operational considerations

But hotels are not just about initial capital, they are also heavily influenced by recurrent costs.  This is operational costs, primarily staff and utility costs.

In Australia, where staffing costs are high in comparison to the rest of the world, it is extremely important that operational layouts are efficient.  This will help minimise staffing costs and maximise future operating profits.

Another challenge in the Australian market is making Food and Beverage profitable, particularly with the likely demise of the hotel buffet in a post-COVID era.  Historically, Australians have tended towards eating out at local restaurants when travelling for work or play.  This is contrary to hotel dining in Asia, which is seen as prestigious.  This may change, however, once international travel resumes, and tourists look for more security – perceived or otherwise – in terms of hygiene and sanitation.

Like all restaurants, viability is essential. If the restaurant is buried deep within the hotel the general public will not tend to frequent the restaurant as it will not have sufficient visibility to attract external patronage. 

 
Summary

Against a backdrop of changing demographics, the hotel industry is constantly evolving to adhere to guest expectations. Hotels need to find new ways to improve their customers’ stay and exceed their expectations in terms of the hotel value proposition.  Hotel design is a critical component to ensure that what is developed meets the needs of existing and future hotel guests. 

The brief needs to include all the information to enable the designer to understand what they need to deliver and what the hotel will look and feel like.  When preparing a hotel design brief, Colliers Project Leaders typically provide the following:

  • Hotel market commentary;
  • Identify market opportunities;
  • Communicate trends in the market;
  • What are the local commercial influences and drivers?
  • What is the guest profile? How long is the typical stay, spend etc?
  • Which hotels are the benchmarks and current and future competitors?

It is also important to be more prescriptive in terms of:

  • Hotel positioning – upscale, upper upscale?
  • Potential key count,  and mix of room types;
  • Room sizing;
  • Room amenities;
  • Front of House schedule with indicative areas;
  • Back of House schedule;
  • Suggested accommodation footprint.

As well as specifying:

  • Target construction budget per key;
  • Fit-out budget per key.

 

Our experience and data built from delivering commercially successful hotel projects provides Colliers International with the understanding to:

Hotels_Charting the Course_Designing Today for Tomorrows Hotel Graph_1

By managing and controlling each stage Colliers International Project Leaders deliver hotel developments that are valuable long-term assets which meet and exceed guest expectations.
'Charting the Course' series

 

Colliers International Hotels team have put together a series of articles to help the hotel and tourism industry chart the course to recovery, as one of the sectors most acutely impacted by social distancing measures introduced in response to Covid-19.

For more insights and articles, please click the image below to be redirected to our home page.

 

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