BERLIN — Hoteliers have never been known to be innovators.

Hotel innovation is primarily driven by forces outside the industry in different sectors, said Martin Stockburger, CEO of Koncept Hotels, which operates seven hotels in Austria, Switzerland and Germany with a pipeline of approximately 350 rooms.

“If you are mature industry, and if you want to innovate, it cannot be an idea within the industry. If 99 are doing it this way, innovation is on the other side,” Stockburger said during the recent International Hotel Investment Forum at a session titled “Hybrid Concepts and Hospitality Innovation.”

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May 16, 2022 10:26 AM

2022 International Hotel Investment Forum

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John Philipson, COO of Cheval Collection, which has nine assets with 615 serviced apartments, said investing in technology remains critical but must consider the angle of what will add value.

Digital payments are one area hoteliers have much to learn about, said Sharan Pasricha, founder and co-CEO of Ennismore.

“Sixty percent of all online transactions are through digital wallets, but if you look at our industry, it is negligible, single digits,” Pasricha said. “We were one of the first groups to use Apple Pay. My teams thought it was tricky, but half the mobile bookings we do now are on Apple Pay. Think how easy it is to making purchasing decisions when you have [such technology]."

Pasricha, who oversees 100 operating hotels at Ennismore and has 170 more in the pipeline, asked how Amazon has become so dominant. He said it was because the online retail giant was not focused on the competition but on the customer.

Similarly, the hotel industry needs to further zero in on the customer experience, he added.

“During COVID-19, the hotel industry adopted pre-paid refundable rates that were wildly flexible, as you had to, so we went further and said, 'Why do we not ask our customers when they want to check in?'" Pasricha said. “Then you can [reorient] your operation to [those results], and it is amazing what you can do. We found this to be wildly beneficial. The guest gets off that early flight, and your room is ready."

Philipson agreed that customers often drive an industry's innovation.

“They truly do tell you all the positives and all the negatives, so look at what they are saying both in and out of our industry,” he said.

Stockburger said digital tech allows hoteliers to create new types of hotels.

“You need 120 keys to be bought by [large-scale real estate investment firms], but digital technologies allow you to manage small hotels,” he said, referring to German powerhouse Decca Immobilien.

Pasricha said innovation in lifestyle products centers on space utilization.

“Hotels are much more than a bed for the night, so you have to think differently about the entire asset. Fifteen percent more cost can lead to 40% more revenue,” he said.

Stockburger asked if the 200-room box hotel will soon be outdated, but Pasricha said hoteliers at those assets were not standing still and would “soon find their groove.”

Even if established hotel players are not willing to pay the cost of a secondary location in a secondary city, that white space will lead to innovation and hybrids from smaller or as-yet-unknown innovators, Stockburger said.

Environmental, social and governance strategies, probably the largest talking point throughout IHIF, also are creating new products and other innovation, Pasricha said.

“That is more a shift in consumer behavior coming out of COVID-19," he said. "Brands with purpose, a real mission, now mean more to consumers. All the time, young people are asking me what our focus on sustainability is, and you have to live and breathe these values. It is far more than bartenders with tattoos."

It costs nothing to spend time on idea generation, Stockburger said.

“Brain doesn’t cost money. [Innovation] often does not cost money in the first step. It is afterwards, when you have to tick all the boxes that it is cost-intensive,” he said.

Kindness, empathy and hospitality also do not cost anything at the initial stage, panelists said.

“We look for staff who exude the brand, and this can often be seen when you walk into a different community and space,” Philipson said.

Philipson cited Dutch brand Zoku Hotels, which he said “went in big and bold, even if they currently only have three properties.”

Stockburger said he has been impressed with The Student Hotel, another concept originating in The Netherlands.

“It is not just the product but the vision, it not being initially backed by any bank, who then came around a decade later and said the idea is brilliant,” he said.

While customers push innovation, so do employees, Pasricha said.

“Asking the right questions leads to the right activity. My first hires were software engineers, and people thought I was mad. [The industry] cared so much about the spaces but not the digital journey through them,” he said.

Pasricha said the best hotels today are ones that do not feel like hotels, but someone’s home.

“No check-in, no need to sign a bill every time and generous in spirit and service. We try and build some of that into our business, especially as 40% to 50% of our business is [food and beverage], and many of the customers are locals," he said. “You are competing with that great restaurant down the road."

Hotel guests themselves are changing, too, Pasricha added.

"Another seismic shift is the hybrid working environments. At Hoxton, for years we did not charge the youngsters in the lobby, so we thought let’s give them a dedicated floor and start to think what that would be like," he said. “Flexibility was a treat, Now it is a must. The entire customer journey now is about recognizing what it is and reorganizing and simplifying it."

It won't be long before hotels are competing for guests in terms of sustainability initiatives.

“The hardware war is done,” Stockburger said. “The next innovation is sustainability, hotels done in a sustainable way, not just an eco-hotel, a hotel that has respect for community and society.”

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