TORONTO — It’s often said that patience is the secret to good food. It shouldn’t come as a surprise, then, that culinary-focused hospitality company Appellation is set to open its first property — Appellation Healdsburg, in Healdsburg, California — a whole six years after it was founded.
Although it wasn’t by design — the company’s first project didn’t make it to the finish line due to the COVID-19 pandemic — the extra wait has proven to be beneficial, Chief Commercial Officer Ed Skapinok said.
Appellation used the time to solidify its brand message and strategy, unveiling its name and brand last year to a solid reception, Skapinok said. The name “Appellation” means to give name to a place, which aligns with its emphasis on resonating with the local community through its offerings.
Skapinok said the work put in over the past few years will be evident as more comes out from the brand.
“We're certainly anxious for the day that we open the doors and the first guests check in because we're hoteliers and culinarians at heart. That's really what we love to do,” he said. “Fortunately, we've built up some anticipation with how we're designing and executing things, so there'll be a lot to look forward to.”
The following is a Q&A conducted with Skapinok at the 2023 HITEC and HSMAI conferences.
What’s new with Appellation?
We've got three hotels under various stages of construction right now and another half dozen that’ll be a fast follow after that that are in the development pipeline. We're just evaluating new locations. We've been very fortunate that developers are starting to bring projects to us.
We funded our first few projects ourselves. Now we've got developers bringing projects to us. So it's opening up new markets; we're evaluating new locations, [evaluating] does our brand fit in other destinations that we weren't working in before?
The fastest way to grow the brand is to grow the number of locations, and so that's what we're doing.
We do have the new development website; it's going to be debuting in July. We decided to do a separate URL for our development and investors content for two reasons: One, because we've got consumer-facing content on the new consumer website that we developed, so it's different messaging, but the two will link to each other. Also, with our personalization capabilities on the site, our site content dynamically changes based on who's viewing the site.
So person A goes to the website, it's going to look a little different than person B based on what we know about them and even just based on their activity on the site. Images, content — everything's dynamic to serve up what's most interesting to them. ...
Somebody that's looking at us — if they're a developer and they're trying to learn about the brand for development purposes or they're a lender looking to do a construction loan — we didn't want to confuse our personalization engine with their shopping behavior on our [development] website versus the consumer one.
As the chief commercial officer, what does the commercial operation look like at Appellation?
Commercial strategy has really been an interest of mine since I started my career. I've designed our commercial organization just like we've designed everything else to be more efficient, more forward-looking.
We do have different staffing models in the way we support our hotels through shared resources. For example, our hotels don't have a director of sales, a director of marketing and a director of revenue, like many other hotels. We have a director of commerce and then that person oversees the on-site sales efforts and is really the chief revenue strategist for the hotel.
Then we support the director of commerce and the on-site teams with centralized marketing, centralized revenue management, but really the director of commerce is the conductor. The way we've designed it, though, we're able to get more experienced talent in each of those disciplines than if we were placing all of those roles in the individual hotels. It's a more efficient model for the owners of the hotels, we're able to operate at a lower cost of sales, but using the technology and the staffing models we have, I would argue that it's much more effective than the traditional hotel sales, marketing, revenue model.
What's been your experience working with artificial intelligence?
Right now, I think it's probably a little scary for everybody because it's moving so quickly. I heard a crazy statistic that the number of users using the OpenAI technology in three months is the same as what it took Facebook to get in seven years. That is staggering.
It's moving so fast. We're finding uses for it for sure. We still have copywriters, we still have graphic artists, but I could see us over time being able to supplement their efforts with the technology.
There will always be a need for people but instead of looking at replacing roles or positions, I'm breaking everything down into staff hours. If I've got a copywriter right now that is spending 40 hours a week on their job, with AI, I might be able to have them spend 12 hours a week doing true copywriting and then what can I do productively with the other 28 hours?
When we're sourcing talent, we're looking for multitaskers, people that can do different roles. As we get more comfortable with AI technology, we'll be able to use our staff in different ways to advance the ball that they can't right now because they're busy with all of the detail work. If we can help with the details, smart people, productive people can do a better job serving guests, finding customers, doing all the things that we really want them to do.
What are the advantages of having a premier food-and-beverage product such as the one that Appellation is shooting for?
For us, having a master chef as a CEO and co-founder, food and beverage is part of our DNA. Early on, there were comparisons between us and early Kimpton or Nobu. We've got these great hotels with great restaurants.
We share those attributes, but for us, culinary and food and beverage really is much deeper in the guest experience. I mean, our lobbies don't look like hotel lobbies, they look more like residential entertaining spaces.
We brought the back-of-the-house culinary prep stations out into the lobbies so the guests can interact with the culinary team, learn about the ingredients [and] techniques. We've got on-site farming and greenhouses — and that's something where our farming team can educate the guests on what grows regionally — [and] demonstration kitchens in the event spaces. We really tried to activate food and beverage throughout. ...
It gives our teams something unique to talk about. It definitely creates interest with consumers that are learning about the brand and want to travel with us. Many of them are adventure travelers, and for them culinary is an adventure.
Being able to get behind the scenes and talk to the culinary team and being able to understand the ingredients or have cocktail kits prepared by our mixologists and be able to attend classes that we hold at the hotels and learn about techniques or meet with a local knife maker or something like that. ... It just gives us something that's unique and different, and it's just a better way or a different way to experience a destination.
All of the locations Appellation has planned right now are on the West Coast. Are there any plans to move out East?
I can see that in the future. I think for us right now, keeping our geographic footprint within a few hours of home is the right thing.
We've had a lot of interest from people asking us about locations in the central U.S. [and] on the East Coast. I think the brand absolutely works in those destinations, but just operationally we'd like to kind of keep it a little bit smaller initially. Certainly I think that the growth opportunity is out there.
What are your final takeaways from HITEC/HSMAI?
Key takeaways are that technology is not going to replace people. You can certainly enhance — and this was important for us — the guest experience, but also the employee experience by making technology simple and eliminating friction in the journey, whether it's the guest journey or the employee journey with us, eliminating those friction points to just make the experience of working with us or staying with us that much more enjoyable.