VIENNA — European hoteliers are emphasizing building communities to boost the lifestyle segment.
“Lifestyle” in Europe is a broad segment across a diverse region of almost 50 national markets, with a mostly fragmented hotels portfolio and a transportation infrastructure that allows even for short breaks to a wide wealth of languages, food and beverage, and culture.
Thomas Emanuel, director at CoStar hotel analytics division STR, said Europe has 66 hotel brands that classify themselves as being lifestyle.
“That is 956 hotels and 130,000 keys. It is a pretty eclectic mix,” he said during a panel on the segment at the Hotel Investment Conference, Central and Eastern Europe, better known as HOTCO.
The two largest brands by hotel count are Marriott International brands Moxy and Autograph Collection, and six of the top 10 belong to international hotel brand companies.
Jonathan Lee Jones, senior vice president of investments for Europe at owner Lifestyle Hospitality Capital, said the European lifestyle segment would have suffered broadly a long time ago if it was not for hotelier efforts to build relationships with local partners and people.
“Lifestyle is a design-led product with multiple revenue streams but with spaces that connect communities and create a halo effect for everything else,” he said.
Gabriela Basovska, director of development, Western Europe, Hyatt Hotels Corporation, said that since the formation of the W Hotels brand in 1998, lifestyle hotels have put on the party that stops hotel guests from going to bed, the same one that “when you arrived back home, you thought, I want to go back to that.” Started by Starwood Hotels & Resorts, W Hotels is now part of Marriott's brand stable.
That notion is multiplied in Europe, where the excitement that comes from multiple countries with many cultural differences and stimuli drives heightened innovation among hoteliers, said Adrian Schmidt, vice president of digital development and strategy at hotel owner and operator HR Group.
Hotels generally have functional, emotional and social benefits, but lifestyle hotels must provide more than that, said Marcel Engh, founder and managing director at Drella, and co-founder and chief marketing office at Jazzed, two firms that bring entertainment initiatives into hotels.
“The big buzzword now is community marketing. Ace, The Standard and Hoxton have communities, but Moxy does not as yet. It is only community that can keep a [lifestyle] brand strong,” he said.
Benjamin Calleja, founder and chief experience officer at food-and-beverage design firm Livit Design, said the simple premise is that the offerings at a lifestyle hotel must be better than what is next door.
Engh said hoteliers and non-hoteliers are seeing opportunities to use hotels as a conduit to entertainment initiatives.
“Artists used to premier [musical] material at hotels. Now you can stream that to a paying audience,” he said.
Calleja added it is interesting to see non-hotel brands coming into the space, either as a partner or creating their own hotel brands.
Reaching The Top
Success in the lifestyle hotel segment derives from hoteliers having a clear goal and strategy to reach the required revenue per available room and then instigating the community-led experiences that hit every touchpoint in the hotel, Engh said.
“Consistency is key, and some brands I feel miss out on that,” he said.
But it's a mistake not to keep a sharp eye on all the small, unexpected details that resonate most with guests, Calleja said.
“It used to be easier to understand who the guest and the local is. The hotels that do well often have community managers, an important role that helps fill those hotels,” he said.
Community management provides data and, crucially, “a lot of non-hotel-specific data that can add to the understanding of the customer,” Schmidt said.
Many aspects of lifestyle still make sense to investors, notably the diversification of customers and the likelihood that the hotel will have more to keep guests on property, engaged and spending, Lee Jones said.
For Basovska, her firm's Thompson Hotels brand is “the epitome of lifestyle, but I believe it has less obvious ways of delivering it. It is less prescriptive.”
She said such an approach to lifestyle has a huge role to play in Europe.
The United Kingdom, Germany, Spain and France lead in the number of lifestyle hotels, based on HOTCO’s analysis, Emanuel said. He added the segment has legs.
“Pre-2000, there were only six lifestyle brands in Europe. … Today, Accor has 11, and there are 7,000 Moxy rooms in the European pipeline,” he said.