As summed up by well-known consultant to the hospitality industry, Roger Permezel of id.HotelsAdvisory, “You just can’t catch a break in the hospitality industry. Even at a time when hotel occupancy rates are soaring in many domestic markets, disruptive forces such as the sharing economy, the emerging millennial market, and changing tastes in food and beverage are forcing hospitality industry leaders to rethink the way they do business.”
“The major hotel companies are realising that they have to be more agile and creative in this rapidly changing hotel environment,” says Jeff Robinson, Aurecon Principal Engineer and Hospitality Sector Leader.
The past ten years have seen the introduction of many new hotel brands. Most of these are geared towards the millennial generation, now in their twenties and early thirties, with hotel companies creating innovative concepts to capture this high growth segment of accommodation demand. “The millennial generation is not seduced by ostentatious rooms with all the bells and whistles that for them serve no purpose. They are adept at matching an accommodation offering to their actual needs: they look for a select services hotel in a great location which provides genuine value; a comfortable bed; high speed free WiFi; in-room technology and an interesting place to ‘hang out’ which facilitates networking with other hotel guests and even locals.”
“The business case for these smaller select services hotels is that they are cheaper to build and operate, and that they open up the market to more travelers. This enables the major chains to improve their position in the market, while keeping in tune with evolving trends,” comments Aurecon’s Wouter Brand, Project Director in the Middle East. “For every traveler who can afford five star accommodation there are hundreds who not only cannot but aren't necessarily interested in doing so.”
To provide innovative new lifestyle hotel assets offering competitive room rates – typically in the range USD100 - USD300 per night, far below that of traditional hotels – led to the emergence of the ‘shrinking hotel room’, ranging in size from elbow-bruising micro-hotels with 4.5 m2 rooms at USD88 per night, hotels in New York and London airports with 7 m2 for around USD200, to the Marriott group’s intended Moxy range aiming at an average of 17 m2 or the Zoku Lofts which promise hybrid-living (living and working) in a minimum area of just 25 m2.
Luring guests with the promise of a unique experience, the Moxy hotels, as with other successful niche focused concepts, will have small guest rooms but generous open public areas designed to inspire relaxation and interaction among guests through creative open bars and informal food areas that reflect the culture of the hotel locality, rather than the operator’s brand.
“Construction costs for select services hotels have to be carefully estimated and controlled because there is often no prototype on which to base the costs,” says Stephen Olckers, Aurecon Head of Building Services (Cape Town) & Hotel Business Development in Africa.
“One of the main challenges with designing for minimum capital cost is finding a balance between the Mechanical, Electrical and Plumbing (MEP) installation costs while still focusing on low operating costs and complying with the brand standards of various operators for their select service/boutique hotel brands.”
There also has to be an appreciation of the rapidly changing technology requirements of the guests. Engineers, developers and operators have to cooperate closely to plan their establishments in order to give guests everything they need, cost-effectively. In most cases, this means simplifying and streamlining a design approach so that it works across a number of select services hotels.
What developers and hotel operators are trying to achieve is a high degree of functionality with a lower budget. “You have to be smart about the design,” says Robinson. “For instance, these select services hotels operate with a lean staff compliment and you have to find technological solutions that can supplement the number of staff. This might include smart watches for household staff to access information easily and instantly. Getting the right balance of cost, facilities and value for money requires ingenuity in design and planning.”
“As a design-led practice, Aurecon has solid experience in working closely with clients to make sure that they are able to get a return on their investment. Our goal is to contribute to the success of the trend in select service hotels to capitalise on the strong growth in demand from the millennial generation.”
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