Diego Lowenstein, CEO of Lionstone Development, shares his outlook for the new year.
Q: Looking ahead to 2018 and beyond, what demographic of traveler will drive trends in hospitality, and what should hotel owners/team members know?
Looking ahead, hotel developers and owners need to understand the shift in customer segmentation, and what traveler expectations are when it comes to lodging. Millennials – expected by the Cornell Center for Hospitality Research to make up 50 percent of all travelers to the United States by 2025 – represent a big opportunity for hotel owners and developers who start planning for the future, today.
First and foremost, hotels must continue to improve their technology offerings. Many hotels nowadays offer free Wi-Fi, but millennials and early adoption of technology go hand-in-hand, so it is vital for hotel owners and developers to stay on the cutting edge and find ways to integrate the technology trends of today (and tomorrow) into front and back of house operations. Our Virgin Hotel property in Chicago appeals to the millennial generation by allowing its guests to move at their own pace and control their experience with app-based technology that lets them check-in, change the room temperature, order room service and more, and frees up client-facing personnel to spend more time providing top-of-class service to guests. That second part is key; as technology becomes more prevalent, it’s important to understand that although guests want to eliminate some interaction with staff (such as basic processes like checking-in), they still want access to personalized attention and exceptional service.
Another key motivational driver for millennials is the desire for unique experiences – even outside the hotel. This is especially true for hotels in urban areas, like Miami. We call this “breakage” – when guests leave a hotel property to explore dining, shopping and other nearby attractions. Hotel team members, the concierge and others involved in guest services should be trained not only to provide on-site options, but to embrace and facilitate this experience for guests and steer them to the best nearby restaurants, hidden gems and popular attractions in the city. This elevates the overall experience, tapping into what is important to the generation, and, in turn, will make those guests more likely to return or recommend the hotel.
Q: There is an evolution of the all-inclusive hotel sector – what are your predictions for growth in this sector?
In the past, people often associated all-inclusive properties with a three-star, mid-level experience. That has changed, and will continue to evolve, so I expect to see a continued rise in development activity in this category.
Today’s all-inclusive properties, at least the brands that are doing it right, like AMResorts, are not your grandparents all-inclusive. The segment is shifting from a “deliver it all, in the most cost-effective way” mentality to a “deliver a top-of-the-line, luxury experience that includes the incredible food, premium beverage, entertainment amenities and features today’s travelers are looking for.” Additionally, more and more major players in the hotel industry have been getting involved in the luxury all-inclusive space, which is spurring competition to differentiate themselves with even better food and beverage, expanded activity offerings, superior service and stunning property design.
Q: Can you share what Lionstone Development has planned for the new year?
At Lionstone Development, we’re always looking for new opportunities and new markets that will lead to smart growth. In 2018, we will be opening other Virgin Hotel properties and growing our portfolio following our first Virgin property in Chicago. We are also actively scouting potential conversion opportunities in our home-base of South Florida. Aside from Virgin Hotels, we’re also looking to increase our footprint in the Caribbean by assisting as developers with a large-scale development of multiple hotel sites. We should be announcing this shortly.
As a separate entity from Lionstone Development, my family is expanding in Europe through Marzocco Development, our development company in Italy. We’re currently converting a number of historic properties in Tuscany and Florence into luxury hotels, including legacy assets that are 400-500 and even 1,000 years old. ■
Diego Lowenstein is the CEO of Lionstone Development.
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