How hoteliers can find the hybrid-service sweet spot
 
How hoteliers can find the hybrid-service sweet spot
27 SEPTEMBER 2016 9:24 AM

Rooftop bars, trained staff, and unique spaces and experiences are driving hybrid-service hotels. 

In the hotel business, select service has been the coin of the realm for some time now, and there has been much more select-service development going on than full-service development.

However, that dynamic seems to be shifting—but perhaps not quite how you’d expect. While there seems to be a renewed vitality of demand for full-service hotels and corresponding opportunity to brand and reposition full-service properties, the industry isn’t tilting all the way back to full service. Instead, we seem to be adapting something in between, and in the process, we could be witnessing the introduction of an entirely new category that has not yet been identified: hotels that are select service by brand nature, but also integrate some full-service components.

This quasi-full service or hybrid concept frequently incorporates a rooftop bar or creative and compelling dining feature to add an important and appealing experiential element.

One such example of this concept is 8UP Elevated Drinkery & Kitchen (8UP) at our Hilton Garden Inn Louisville Downtown Hotel. An outdoor and indoor all-glass drinking and eating experience, 8UP offers unparalleled views of downtown that draw as many locals as hotel guests. The space features a 90-seat restaurant where guests can relax amidst dark wood paneling and feel a part of the action with an open kitchen. With an extensive menu focusing on progressive American cuisine designed to please the sophisticated palates and celebrate the spirit of fun that defines Louisville, 8UP was recently recognized in OpenTable’s 100 Hottest Restaurants in America 2016 compilation with an overall rating of 4.4 out of 5.

What is driving this quasi-full-service trend that includes creative and successful restaurants such as 8UP? The answer is a combination of consumer demand and an evolving industry. Hotel owners and operators have simply gotten better when it comes to food and beverage—experiences that consumers want and that add meaningful value to the overall hotel experience. Millennial consumers in particular are literally and figuratively buying into experience, so the ability of hotels to satisfy that demand can be a real asset that helps makes inroads with this influential demographic.

Another issue is that room products have become somewhat homogenous—and therefore less of a distinguishing factor than in the past. Consumers want a clean room, a comfortable bed and premium connectivity, and they are getting it. This makes F&B and entertainment even more of an important differentiator.

Designing spaces that people get excited about and where people want to engage in a unique dining experience is certainly contributing to the growing prevalence of this new hybrid service concept, but the rooftop bar phenomenon deserves special mention. The extraordinary popularity of rooftop bars continues in both full- and select-service properties. It seems like consumers really love them, and these days everyone wants to be the first in their market with a rooftop bar.

We’re looking forward to incorporating these types of exciting spaces into several of our upcoming properties in development in the Midwest, including an open-air rooftop bar and eatery that will provide sweeping views of the Maumee River and Toledo, Ohio, skyline in the former Toledo Grand Plaza hotel, which will open as a Renaissance by Marriott upon completion later this year. We’re also working on developing a new dual-branded hotel, set to open in early 2018, in a mixed-use development located in the Illinois Medical District, as well as working to develop the world’s first tri-branded Hilton hotel complex at Chicago’s McCormick Place (slated to open in August 2017), both of which will feature a rooftop dining lounge experience. Most notably, we’re developing and managing an imaginative new hotel on Chicago’s iconic Navy Pier, which is slated to open next year with two stories of dining space and at least one full-service and high-energy restaurant.

From my own experience, I can say for hotel owners, operators and investors, finding the hybrid service sweet spot can be a little bit tricky. There are far too many industry professionals who think that all it takes to set up a rooftop bar is to put some furniture up on the roof and start serving drinks. But a great rooftop bar is like any other engaging entertainment space: You have to have an eye toward the aesthetic, you have to create the right environment and you have to have experienced staff. In a hybrid-service hotel, just as in a traditional full-service environment, everyone recognizes that you have to have vibrant food and beverage options. The traditional boring hotel restaurant just won’t cut it in today’s world. In the hotel community, those with the skills to create a successful restaurant are not always plentiful.

As a result, more and more hotels are partnering with experienced operators that have a demonstrated track record of creating great spaces and memorable experiences. Partnering with creative, talented and high quality F&B operators goes a long way toward achieving something else that is important for a quasi-full-service hotel: its own identity. I believe that every successful quasi-full-service or hybrid-service property has to establish, market and maintain its own unique signature. Consumers won’t necessarily know what a rooftop bar at a Hampton Inn means—you have to show them, and you have to let them know about it.

Beyond the operational mechanics, one of the most interesting big-picture questions that arises with the emergence of hybrid-service models is whether our traditional labels even mean anything anymore. Do full service and select service mean what they used to, or are the lines starting to blur enough to make clear categorization difficult or even impossible? It might not matter too much, since I’m not sure that consumers (especially younger consumers) draw the same distinctions between these different service levels that hotel professionals do. Certainly, consumers have certain expectations with branded hotels (a Hampton Inn is one experience, a W is a different experience altogether), but as more hybrid offerings and pseudo/quasi-full-service offerings proliferate, the hotel landscape may end up looking very different than it does today.

Regardless of the label, I do suspect that hotels incorporating rooftop bars and creative dining features are here to stay. Consumers really seem to like the convenience and straightforward business proposition of a select-service hotel, while having great amenities like a destination dining or entertainment venue at their fingertips.

Robert Habeeb is president and CEO of First Hospitality Group, Inc., a national, experienced, and established hospitality management and development company serving the investment and real estate industries. Since 1985, FHG has been an award-winning pioneer in the hospitality industry. FHG has successfully developed, marketed and managed more than 16 brands and 50 properties throughout the Midwest. Visit www.fhginc.com.

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1 Comment

  • ButlerHospitality October 25, 2016 5:01 PM Reply

    Interesting article! It seems like hybrid-service hotels are the way of the future. Besides having entertaining and beautiful rooftop bars on site, hotels are also outsourcing services. We here at Butler Hospitality are third party room service providers and we've had great success partnering with select service hotels.

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