RAS AL KHAIMAH, United Arab Emirates — Experiential travel and hotel stays have been the buzz of the past few years, and top the agendas of many hotel brand operators.
Lenders now are also paying attention to the demand for hotel experiences, according to executives who spoke at the recent Gulf & Indian Ocean Hotel Investors’ Summit in Ras al Khaimah, United Arab Emirates.
During a panel on experiential travel, Jay Rosen, group CFO of The Red Sea Development Company, said when hotel brands offer experiences, they need to first ask what the brand stands for.
“A lot of people are asking these questions. And they want to understand what the commercial side is to this?” he said.
He added that one fundamental problem is that hoteliers are too focused on the experiences that are missing at their properties, whether bars and restaurants or entertainment, attractions and programming.
“Sometimes it is better to improve what we have and to deliver the best experiences,” Rosen said.
Another difficulty is that all trends eventually end.
“Authenticity is key,” Rosen said.
Louis Thompson, CEO of Nomadic Resorts, which designs landscapes, interiors and architecture, said when hotels try to promote the culture of their destination, that can instead be perceived as merely simulating that culture.
“It can be made slightly Disney World-esque. Culture is dynamic, not set in a historical vacuum," Thompson said. “We need to do our homework and understand why a culture is special."
Alan Honein, chief executive citizen and co-founder of Earth Hotels, said hoteliers also must be careful not to over-program hotel stays or entertainment offerings when guests might just want a comfortable vacation.
Tommy Lai, CEO at Singapore-based investment firm General Hotel Management, said a hotel stay sticks with a guest after the vacation only if the service is good and genuine.
To Be or Not To Be
Christopher Lund, head of hotels for the Middle East and North Africa at business advisory Colliers and moderator of the panel, said some hotels might understand the concept of an experience and what guests want from their properties better than their competitors.
“Is Versace [Hotels] experiential, or just a brand with a fashion label?” he asked.
A good hotel must be authentic, both in essence and to the brand, as well as popular with locals, Honein said.
“Ultimately, [a hotel stay] is about escapism. We’re focused on unique destinations, programs, who we hire and their stories,” he said.
Rosen, who is overseeing a massive Saudi Arabian development on some 10,000-square-miles of land on the Red Sea and part of the country’s Vision 2030 tourism development, said he believes experience starts with geography.
“We have a diverse landscape, and the jewel of our property is our lagoon. We have the fourth-largest coral-reef system on the planet and a dormant volcano. Our experience is to leverage a unique location,” he said, adding that the project will be home to a number of distinct brands, too.
It's also important to establish a trust between brand and guest, Lai said.
“Post-pandemic, how we travel, how we stay, how we pay, they all are different and evolving,” he said.
Everything Is an Experience
Thompson said searching for an experience that has never been offered is still plausible, and the best experiences are tinged with a little risk.
“One new idea, maybe in the United Arab Emirates, would be a floating camp,” he said.
Experiences aimed at individuals will be different than those aimed at groups, which requires an environment in which the experiences can be shared, Thompson said.
While owners regard experiences as good, profit is better, Lund said.
Even if a location is ideal to promote experiences, hotel operations must be aligned for it to be successful, Lai said.
“It is about profitability. Everything needs a benchmark,” Lai said.
Rosen said in his experience, lenders increasingly are appreciating the power and revenue of experiences.
“Brands are driven by top- and bottom-line economics,” he said.
He added a hotel providing 100% renewable energy equals an experience for some guests.
“To market that to guests, there is a return on investment associated with that,” Rosen said.