Tag: Hospitality Supply Movement

Legendary Hotelier Considers Airbnb a Huge Threat to the Industry

Hospitality Becoming Less About the Money, More About The Experience
Hospitality Becoming Less About the Money, More About The Experience

In less than 10 years, Airbnb has grown to include more than 3,000,000 listings serving 150,000,000 customers. An iconic figure in the hospitality industry who introduced boutique hotels to the world is unveiling a new concept designed to fight back at the upstart service.

Hotels as Social Hubs

Ian Schrager, co-founder of legendary 70s nightclub Studio 54, went on to create Morgans, the first boutique hotel, which opened in Manhattan in 1984. Schrager’s new hotel, Public, located in New York’s Bowery district, offers a style of no-frills elegance referred to as “tough luxe.”

In a recent interview, Schrager stated that he feels the hotel industry is “in denial” about Airbnb, just as the sector originally dismissed online travel agencies such as Expedia and Travelocity. Public is designed to provide upscale lodging with a social atmosphere that’s missing from the Airbnb experience.

Enhancing the Social Experience of Travel

The rooms at Public are stark but sophisticated, and amenities such as bellmen and room service have been eliminated. In keeping with the emphasis on the social aspect of travel, the hotel features two restaurants, two interior bars and a rooftop terrace, and a performance space to accommodate film screenings, theater performances, readings, and art exhibits.

Schrager explained that the concept of luxury has become more about the experience than the cost. This idea led him to forgo unnecessary glitz in favor of ramping up the communal and entertainment features.

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Hotel Overbuilding Softens Several Metro Markets

With Hotel Overbuilding, You Can Cut Back on Costs with Our Products.
With Hotel Overbuilding, You Can Cut Back on Costs with Our Products.

More travelers, but even more empty rooms. That’s the dilemma facing many hotels around the country, even in some of the hottest markets. People are staying more nights than ever before, yet all the hotel overbuilding of recent years and today has flooded the market.

In typically slow markets like Oklahoma, overbuilding has brought overall occupancy and revenue per room down significantly. Meanwhile, in hotbeds like Austin, Nashville, and Miami, new hotel construction has managed to outpace these cities’ robust demand.

National Real Estate Investor examined the issue and estimates a record 1.2 billion guest nights in 2017 against 1.8 billion available rooms.

Effects of Hotel Overbuilding

Developers have targeted specific metro areas more than others. In the perennially healthy New York market, new construction has been largely matched by demand. Consumers get some relief on price and availability, while hoteliers in the Big Apple continue to see strong occupancy.

However, in many hot tourist markets like Miami and in convention-friendly hubs like Austin and Nashville, the overbuilt, saturated market spells lower revenue per room for the foreseeable future.

Elsewhere, hotels have overbuilt in remote areas like Wyoming due to temporary demand related to drilling and fracking. Such areas may be drowning in surplus demand for years.

Facing the 2017 Hotel Market Outlook

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To keep expenses down and improve guest satisfaction in a competitive market, consider hospitality industry powered carts for housekeeping and maintenance staff.