Transforming the Predictable to the Unpredictable: Conversions and the Hospitality Market

By Randa Tukan Senior Vice Principal & Director of Interiors, HOK | November 11, 2018

With decades of uninspired and repetitive hotel design, many properties adhere to the same formulas for space planning and allocation as dictated by brand design standards. From the location of front desk, to the lobby, lobby lounge, as well as guest rooms, standard configurations and layouts have long served the industry and proven sound solutions for efficiency and functionality.

For the guest, however, they have not only become highly predictable, but, also, nearly impossible to distinguish one brand from another. As customers gravitate toward authentic and locally-inspired environments as well as site specific amenities and food + beverage outlets, designers have put greater effort in creating more original and individualized interiors as well as more functional and usable spaces.

With the number of domestic and international travelers only increasing, aesthetic and comfort along are not enough to entice guests or to build a case for loyalty. Often, hotel spaces with similar styled furnishings, finishes and artwork can blur with one another. While most guests will not recall colours, seating shapes or upholstery choices, they will remember a guest room with a "different layout," or a lobby space with a unique architectural feature.

A recent trend that could help override the issue of "hospitality sameness" is the emergence of conversion projects. Originally, when the term "conversion" was used in the hospitality industry, it meant converting a property from one brand to another. Recently, the term has expanded to a broader definition referencing building and construction and "adaptive re-use." What is driving this trend, and why is it gaining ground? Conversions are creating unique opportunities for owners and developers. Their value is multifold: experiential and sustainable, market positioning and brand creation, all key ingredients to driving increased sales and, ideally, a solid return on investment.

Reflagging or rebranding is a widespread lodging industry tactic. It is estimated that one in three hotels have been "rebranded" at least once since opening for business. Although these types of brand conversions have yielded positive results, they are typically driven by organizational and/or contractual change. It is unclear as to how much of this rebrand ultimately affects the guest experience. Other than brand loyalty and/or rewards collection, in the current brand landscape, guests are oversaturated with options and amenities that strive to cater to their individualized needs.

After a while, the difference is minimalized and a "unique" element or characteristic is commonplace. As guests continue to challenge the cookie cutter model and place even greater demands on properties, the emergence of the "one-off" is increasing, and conversions by "adaptive re-use" are able to provide a unique point of differentiation and set themselves apart from competitors.

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.