Big Hotel Chains Turn to Indie Values

Originally published by the Indpendent Lodging Congress.

Last week, AFAR Conversations gave us a chance to look at the ever evolving role of hotels. Moderator Joe Diaz, Co-Founder & CPO of AFAR Media, was joined by Maryam Banikarim, CMO of Hyatt Hotels, and Ted Teng, President & CEO of The Leading Hotels of the World, at Wednesday’s event to dissect how big chains are changing.

Even with Big Chains, Hotels welcome industry outliers

Leading Hotels of the World boasts a whopping 375 luxury hotels. Hyatt has racked up over 650 properties, under 13 brands. With that many properties and employees, how does one NOT get lost in monotony? It starts with welcoming industry outsiders.

In the beginning, Banikarim nor Teng knew they belonged in hospitality. Not initially, at least. “I was originally an engineering student at Cornell University,” Teng expressed. After realizing engineering wasn’t for him, he walked across the street to Cornell’s critically exclaimed hospitality school. “I went because they had wine, but I stay for the food,” he joked.

Banikarim is a self-described ‘purpose-driven change agent.’ In 2015, she leaped from the print media business after leaving Gannett, what was then the largest U.S. newspaper publisher, right into her current role at Hyatt. “It was either going to be hospitality or retail,” Banikarim said, “because you get to truly touch people.”

On Brands….from ‘customer-friendly’ to ‘customer-centric’

Diaz brought up a topic on everyone’s mind: retailers pushing into the hotel industry. With big brands such as West Elm and Equinox ready to play hotels, it’s hard not to. “You have to look at it from an individual perspective,” Teng said, unbothered. A clear line was drawn in the sand: retail brands are product-centric.

While some hotel brands operate with a product-centric mentality, Teng says that Leading Hotels is more customer-centric. While he helped to re-vamp the company’s loyalty program into a more “me too,” revenue creating program, he says the new program will have more individualization. Give it 60 to 90 days, he noted while looking at his CMO for approval.

Experience.

Banikarim commented that brands can’t just talk about experience, they have to deliver. Otherwise, it’s really just a meaningless word. “People are willing to trade things for experiences” says Banikarim, “because, in an uncertain world, you take your memories with you.” To that, she’s right.

Just look at the success of disruptors like WeWork. The company just made a few big moves in the last month. Earlier this month, WeWork announced a partnership with hotel industry disruptor Airbnb. An announcement on Tuesday revealed the company’s plan to buy what was once Lord & Taylor’s New York City Fifth Avenue flagship store for $850 million. While WeWork members rent out work areas, their memberships are about much more than that. People are drawn to WeWork because of it’s community and the experiences.

Family inside and out.

With the notion of experience comes another buzzword: authenticity. How can big chains actually be authentic? For one, you have to look at each location as its own.

“85% of our hotels are owned by families,” Teng noted. When a hotel is owned by family, they tend to hire people native to that destination; people who truly know the neighborhood. “They are looking to express themselves and local managers can relate better to staff…hotels are the ambassador of the city.”

The ‘live like a local’ mentality has helped disruptors like Airbnb thrive. While we may be indie hotel snobs, it’s comforting to see the chains adapt to the times.

But the notion of family starts at the top of a chain. It’s just as crucial for a GM, regional manager, CEO, etc. to understand their employees’ needs as it is to understand their guests’. “It’s all about who you’re working with. If they don’t give me the rope to hang myself with, that’s not the job for me,” exclaimed Banikarim. People want to be heard. “The ultimate luxury,” Banikarim noted, “is being understood.”