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CitizenM establishing global footprint
October 9 2013

The trendy brand is expanding outside Amsterdam and London with new offerings planned in New York, Paris and throughout Asia.

Highlights
  • New CitizenM properties are planned for Rotterdam, Paris, New York and Asia.
  • CitizenM funds much of its own development, working with sister company KRC.
  • The chain was developed due to fashion designers’ frustration with the lack of affordable and stylish hotels.

VOORSCHOTEN, The Netherlands—CitizenM, the trendy brand that started in The Netherlands in 2008, is set to start a new wave of global development with properties in the pipeline for Paris; London (three); New York (two); and Rotterdam, Netherlands.

And on 9 October, CitizenM announced a joint venture with Artyzen Hospitality Group, the hotel management subsidiary of Shun Tak Holdings Limited, which is run by the influential Ho casino family of Macao. The joint venture operating company, Artyzen CitizenM Asia Limited, will result in CitizenM hotels in gateway Asian destinations, such as Beijing, Hong Kong, Jakarta, Shanghai, Singapore and Taipei, according to a press release.

The new hotels are born out of frustration at the inability to find globally minded, value-driven, fun properties in which the guests’ needs are front and center, according to Robin Chadha, CitizenM’s chief marketing officer, who also is a director of private equity company KRC Capital.

Chadha saw that frustration firsthand when his father Rattan owned and operated international fashion company Mexx, which he sold to fashion house Liz Claiborne in 2001.

“Mexx International … had strict limits on employee hotel spend,” explained Menno Hilberts, CitizenM’s director of design and construction. “These employees, stylish and worldly fashion designers, came home frustrated at the hotels they stayed in. In short, they couldn’t afford what they liked and did not like what they could afford, and so developed the idea of CitizenM.”

CitizenM has four properties open: 230-key CitizenM Schiphol Amsterdam Airport (opened 2008); 215-key CitizenM Amsterdam City (2009); 198-key CitizenM Glasgow (2010), and 192-room CitizenM London Bankside (2012).

With bold, striking design by Dutch company Concrete, CitizenMs are very much centered on large lobbies, which the chain calls “living” and “working” areas. The chain’s own executives use the spaces as well; in lieu of offices, corporate staff works where they can find space in these lobbies.

The minimalist approach applies to guests as well, Hilberts said. Gone are unnecessary frills, replaced only by those things guests want—and more importantly, want to pay for.

“The structure is so that the guest has to do everything. They book online and carry their own suitcases, and there is no bell boy, which frees up staff to provide more and better face-to-face service,” he said.

“Our guests are frequent travelers, like us, who value time and price and do not need a concierge to book the best restaurants. We set out to provide hotels on that basis. You end up with a fantastic bed, a great shower, some fun and games, but not much more,” said Hilberts, who added that the model is tweaked for different destinations. “For example, upcoming New York hotels will likely have a few more amenities, as our research suggests that people there tend to stay a little longer and expect more to further emphasize the lifestyle element.”

“How we all spend money is so different today, and hotels have not always really moved in this new direction,” added Samantha Sheridan, U.K. sales and business development manager, who divides her time between Glasgow, Scotland, and London.

Chadha shared a similar sentiment. “There was a need for a hybrid hotel for this new traveler, who is value-conscious and wants affordable luxury. We learned from the fashion industry. Everyone thought that Chanel’s Karl Lagerfeld was crazy to work with the much cheaper Swedish brand H&M, but that worked. I always say that our guest wants to travel by train but still drink champagne.”

Ease and transparency amid style
The CitizenM concept has four pillars: ease, transparency of pricing, a sense of fun and one size and style of room.

“Originally we were just going to have one price regardless of when you booked, which was very radical,” Chadha said. “We did not go with that, so what we do have is dynamic pricing but within a definite bandwidth. Even during the Icelandic ash cloud and the London Olympics we kept the same honest transparency, when we could have raised prices dramatically. We do look at the pricing dynamics of different cities, and then we pitch in the middle where luxury meets value.”

That bandwidth currently results in Glasgow rates between £69 ($111) and £129 ($208) that have not changed in three years. The more rooms sold for any one date, the slightly higher the rate will be. In London, rates range between £99 ($159) and £219 ($352).

CitizenM has an agreement with Bookings.com but sees no need for the involvement of other online travel agencies.

“We’re seeing how our guests like to travel, and we are also seeing loyalty,” Chadha said.

Sheridan said CitizenM does not offer room blocks or permit groups of more than 20, as it affects the mood of the entire property. The hotels do not feature twin or family rooms either.

The rooms the company does offer are adequate but not large, with resultant savings reinvested into lobbies.

“It’s not so much the space but how you can experience it and its efficiency,” Chadha said.

What rooms lack in size they make up for in trappings such as beds that are as wide as they are long and handheld tablets that control all functions. Design is consistent across continents, as is the business-leisure mix of roughly 70% and 30%, respectively, according to Chadha and Hilberts.

Expansion and financing
CitizenM funds much of its own development, working with sister company KRC Capital and Dutch civil service pension fund ABP.

“We might consider leases in the future, but not franchises,” Chadha said. “In New York, we are working with Brack Capital. Those decisions are based on where you draw your comfort line in different markets.”

The company is building in the London neighborhood of Tower Hill, where the 370-key hotel will be by far the largest CitizenM to date. “It is the base level of what we will be doing in the future,” said Hilberts.

The other London properties will be a joint venture near St. Paul’s in the City of London, and one in trendy Shoreditch, which starts construction in quarter one 2014.

A Rotterdam hotel will open by the end of this year, while the group’s first hotel in Paris will open next year. 2014 will see the first New York property, in Times Square. A second property is set to open on a corner of the Bowery and Delancey Street in Manhattan.

“That will have 300 rooms and probably be my favorite when its delivers what we’ve designed,” said Hilberts, who said he joined the company in its early days when everything was merely an idea. “I was hooked by the concept and am convinced, from the guest perspective, as well as that from being an employee.”

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