Years ago, when Cosmopolitan CEO John Unwin took his post, there was a real question as to whether anyone could build an independent brand in Las Vegas. While Hard Rock and Planet Hollywood demonstrated a place for something “hip,” both benefitted from established brand equity and their eventual absorption into larger companies.
So, how did he plan to create a brand that could compete with the iconic and literal behemoths of the Strip? Even then and to this day, John’s mantra has been: “You need to have a point of view.” He didn’t want to give Las Vegas just another steak dinner. Instead, he gave us kittens and baby chicks in the property’s introductory ads, cheese croquettes served in shoes, arguably the best pizza slice in Las Vegas and a Yoko Ono art installation.
He did what the greatest hospitality icons have done for a long time. He hosted and curated experiences that guests never knew they wanted, but now can’t be without. And the recent acquisition by Blackstone suggests that John is really onto something.
The hotel industry started with this fundamental premise. The best (and most successful) hotels — independent brands like The Knickerbocker, The Drake and The Waldorf-Astoria — offered distinctive experiences with food and beverage as the core element, where each city’s well-heeled residents socialized.
Then, with the accessibility of travel and the economics and “identification” of the business traveler, consistency and chains became the norm. Eventually, loyalty programs became commoditized, with travelers maximizing point value like traders on a foreign currency exchange desk.
Las Vegas experienced the same standardization — steak dinner, buffet, highly stylized show, loyalty and rewards program — at different price points. Then the market changed. The economy tanked and Las Vegas’ guest profile morphed.
The average age of visitor has dropped. The way people shop for properties has changed. Guests are online and connected constantly. They post reviews. They post pictures of themselves. Not just in front of the “Welcome to Las Vegas” sign, but in front of plates of food or the wall of a parking garage.
These travelers want The Experience. Full stop. And that is not a cookie-cutter, sit-at-a-slot-machine-for-hours, eat-a-steak-dinner, check-into-a-chain-hotel experience. They don’t identify themselves as business travelers or personal travelers. They just travel. They expect you to be a great curator and to really know them. In gaming parlance, they want “a host with real juice.”
This evolution is the same across the broader hospitality industry, and as standardization brought talent challenges, this “boutique”-ization of the industry has its own set of issues. In our work with a variety of companies offering distinctive guest experiences across the full range of hospitality (gaming, lodging, chains, independents, boutique and luxury), some key insights have emerged.
- Lifestyle is not always luxury. Too many hotel organizations still interchange the terms “lifestyle,” “boutique” and “luxury.” These descriptors are not the same and the confusion leads to hiring mistakes. We often see organizations create recruiting profiles (from executives to front-line management) with the presumption that a candidate from a luxury background can always deliver a boutique or lifestyle experience. Luxury hoteliers have typically been trained in highly formal environments and are accustomed to executing a de facto set of standards. Now imagine this hotelier running a property wherein rooms do not have refrigerators or televisions. Or a grand lobby. Or the property doesn’t have staff onsite overnight or whatever service level is authentic to the previous luxury brand’s narrative. An undereducated observer may assume that these properties operate at a bargain rate or cater to less sophisticated travelers. Think again. The St. Cecilia in Austin and the Sparrows Lodge in Palm Springs command some of the highest ADRs in their market, and their clientele overlap with many of the world’s most luxurious brands. In hiring for experiential brands, we counsel clients to throw out the pedigree checklist and focus instead on competencies. While there are competencies that are important for success in certain roles and situations (e.g., results orientation, strategic thinking), there are some that emerge as specific to lifestyle, experience-driven, boutique situations: curiosity, agility and empathy.
- A playbook is nice, but pattern recognition is far better. Related to the above, a checklist doesn’t deliver experiences. Your people do. Checklists also don’t empower your teams to act like hosts. Hosts act with their hearts — they care about their guests. But the best hosts (and certainly the best in Las Vegas), act with a firm connection between their hearts and brains: “How will what I do translate into satisfaction and revenue?” As Stowe Shoemaker, the dean of UNLV’s William F. Harrah College of Hotel Administration shares, “The best leaders and managers today recognize ‘patterns’ to see how the great experience comes together and understand how what they do impacts consumer behavior and revenue.” Pattern recognition comes in many forms — from analytical tools related to revenue management and CRM to understanding when and how to intervene and walk away from the checklist. Building capabilities in your teams and ensuring that your culture matches this connection between brain and heart is truly important. Do you want to empower your teams to think more, learn more, deliver more? This is nuanced work beyond checklists and often requires a major culture shift.
- The system is still the star. It sounds simple, but the way you organize impacts results. For example, in many gaming companies, there has always been a separation of gaming and non-gaming operations. When the Cosmopolitan needed to emphasize growing gaming revenues, it recruited a chief gaming officer (CGO). In establishing this C-level position, the company reinforced (internally and externally) where it wanted to focus attention. There was no precedent for a CGO. No other companies or properties had such a role. The responsibilities of the CGO were not very different from EVPs, SVPs and even VPs in other companies, but the board, owners and C-level executives of Cosmopolitan weren’t afraid to signal that this role was and is core to their strategy. Similarly, other companies have chosen to ensure that organizational structure matches their strategic priorities. This is a trend we see more broadly in the hospitality sector as companies create chief customer officers, chief experience officers and other roles new to an organization. Especially in the lifestyle category, make your system a star and work for your organization’s true objectives.
Lifestyle has become an important category, and there are concrete lessons from Las Vegas that apply to the broader hospitality industry. It will be exciting to see how the industry continues to evolve but stay the same at its core: serving as great hosts to its valued guests.
Originally published in Perspectives at Global Hotel Network.com.