The rise of design hotels

An increasingly younger, well-travelled, demanding event audience is forcing planners to be more creative and allowing exciting design-driven hotels to get onto their shopping list.

The millenial generation has been credited – or blamed, depending on which side you take – for many new business travel and event trends today, including the growing acceptance and demand for venues in design-driven hotels, properties that were often not built with events in mind.

Cvent, Inc. has reported a “marked increase in the number of planners looking to use design or boutique hotels – up 15 per cent in 2016 compared to 2015”, said Kevin Fliess, vice president of marketing for Cvent’s Hospitality Cloud.

“Gone are the days when traditional mass hotels won all the corporate business,” remarked Fliess, adding that clients use design hotels for various types of events such as meetings, conferences, conventions and educational seminars and workshops.

“Our data also reveals that 33 per cent of these bookings are for a duration of three days, and 26 per cent for one day,” he added.

Although Carlson Wagonlit Travel (CWT) does not track the use of design hotels by its clients – at least for now, due to the lack of sufficient critical mass to warrant such an effort, senior director, meeting and events for Asia-Pacific, Michael Chiay, told TTGmice that the trend is worth watching.

“There is definitely a rise in the use of design hotels for business events, and I believe this is a result of the growing presence of millenials in the workplace. They have a different motivation when attending meetings and events. And as a generation that will dominate the workforce demographic in the next few years and take on leadership roles in buying positions, you can expect to see them drive even greater use of quirky venues for business events,” said Chiay.

Joost de Meyer, chairman and CEO of US-based First Incentive Travel, agrees.
“The clientele is getting younger and this group does not want the big, corporate hotels. They prefer the smaller, trendy hotels that allow them to feel at home. This is why you will find that lobbies (of such hotels) resemble living rooms where guests can meet fellow guests,” said de Meyer.

A well-travelled society is also influencing the acceptance of design hotels as event venues. Gerhad Aicher, general manager of The Mira Hong Kong – a member of Design Hotels, a global network of properties with thought-provoking design and architecture, among other features – said: “As travellers get more experienced they become attracted to design-driven hotels, each with a unique identity reflecting their location which is often widely recognised as a hip and happening destination.”

Caitlin Flynn, director of sales and marketing with The Warehouse Hotel, Singapore – also a member of Design Hotels – said she is seeing “big demand” in non-traditional, creative industries such as media, fashion and technology, and clients are hosting product launches, industry networking parties and influencer marketing events at the hotel which was once a spice warehouse.

Another contributing factor, according to Chiay, is the growing popularity of lifestyle events. “Lifestyle and luxury events conducted by businesses that emphasise on experience and service are more likely to use design hotels, as their event objectives are in line with the promise and forte of such hotels.”

A serious matter
Can quirky hotels work for serious corporate events? Definitely, according to Chiay.
Citing an example, he said a client had chosen to launch his new London property at The Upper House in Hong Kong because the design hotel has a luxury, British vibe that resonated with the product. The event was conducted in the hotel lounge which had indoor and outdoor spaces, something Chiay said few other traditional hotels in Hong Kong offered.

Further driving home his point that “serious events can be delivered in a not too serious manner to encourage interaction” and to emphasise key messages, Chiay shared that a recent financial technology conference held at the Singapore Expo’s Max Atria turned a traditional conference room into “a very cool and laidback space with beanbags and other lively setups”.

“Now, I understand that the venue is not a design hotel, but this shows that how a serious event is presented depends on the attendee profile. In this case, the attendees were young entrpreneurs who needed to be engaged differently,” Chiay explained.

The allure of small, beautiful hotels
The flexibility and exclusivity of design hotels, made possible by their often smaller-than-usual size and independent management, have come up repeatedly as winning factors.
Fliess opined: “Design hotels have the advantage of being able to offer a very personal and dedicated service. At the same time, they can offer the wow factor when it comes to setting, aesthetics and ambience.”

It is easier to do a property buy-out with a smaller hotel, according to de Meyer who has also found that small-sized, high-end incentive groups take well to design hotels.
“It is typically small, luxury incentive groups that (go for design hotels) to reward their staff, not so much business (meetings),” observed Rosanna Leung, head of MICE & business development with Towa Tours Hong Kong.

The location of such hotels is a draw too. “Design hotels tend to be in upcoming new districts which could be undergoing (an exciting) revival programme, such as in areas like New York’s Meatpacking District,” de Meyer said.

Chiay agrees. “They are often in a less commercialised neighbourhood which is rich in local culture and history. This adds flavour to events,” he said.

He added: “Design hotels tend to offer facilities that set them apart from traditional hotels. For instance, in space-starved cities, new-age hotels have to find unique ways to present their facilities and thus you are more likely to find chic rooftop bars in a design hotel. They make great venues for corporate gatherings. Hong Kong, perhaps for this reason, is at the forefront in design hotel offerings.”

China, according to Chiay, said is now seeing a design hotel revolution, especially in the city fringes.

“Shanghai’s quieter, less developed Northern Bund is becoming rather hot for designer properties, like The Water House,” said Chiay, adding that attractive design hotels opening in cities unusual for business events will lead to a rise in corporate demand for such locations.

There is also cost savings to be had.

Jezz Goh, head of meeting and events with Pacific World Singapore, said: “Instead of going for luxury hotels, clients are now more inclined to (use) less expensive boutique-style properties that can enhance delegate experience through their unique (interiors and funishings). The small size of design hotels also often bring about a more exclusive experience.”

Chiay added that “design hotels are almost always luxurious but are priced competitively against similar high-end traditional hotels of international brands”.

When it is not a good fit
Of course, design hotels are not for everyone. Companies that take a more traditional view on meetings and events are unlikely to venture out with a quirky property, while space limitations in terms of guestroom inventory and meeting room capacity can cause planners with a more complex programme or larger group to turn away.

“Events with more intricate requirements and need careful setup are unlikely to go for a design hotel. A designer space can be restrictive, as opposed to blank canvases that are the typical hotel ballrooms,” said Goh.

Hotel policies play a part too, opined Fliess. “Some companies will stipulate use of hotels that satisfy a certain budget or grade, or are a certain distance from the city centre. Design hotels need to recognise that in these circumstances, they cannot compete with traditional business hotels,” he said.

The misperception that design hotels are pricey and “troublesome to manage in a normal contract” is also a hurdle, added Chiay.

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