Improving Sales

Creating new revenues through blue ocean thinking

March 9, 2010
By Renie Cavallari
Hotel and Motel Management

As many businesses find themselves with shrinking revenues and in a challenging competitive marketplace, there is no
more important time for organizations to think differently about their sales targets and revenue opportunities. One thing
you can count on—the same old thinking gets you the same old results.

Step 1: Start asking different questions if you want to start getting different answers.

Most businesses, as captured in the best selling book by Chan Kim & Renee Mauborgne, Blue Ocean Strategies, fish in
the red oceans. These are the oceans where their competition is focused and so the primary successful strategy is to
steal market share. When you move your thinking to blue oceans/untapped markets, you open your business up for a
sea of new revenue opportunities.

In Blue Ocean Strategies, the authors’ focus is on large new market creators like eBay for their pioneering of online
auctioning and Apple for their creation of personalized music and the invention of iPods. What is most valuable for the
reader is recognizing that blue ocean thinking is a way of doing business. This commitment to rethinking everything is a
culture and it can create both large and small revenue streams. In today’s challenging economy, what starts out as a
small source can become large over time with commitment.

There are a few tips you must understand if you are going to be a blue ocean thinker and create new revenue sources
for your business:

1. Understand that there are opportunities right in front of you. For example, Southwest Airlines now offers an online
web check-in upgrade as well as an early bird check-in program. Both of these are new oceans as they were untapped
revenue opportunities. How did they create these revenue streams? They focused on the challenges of travel and how
to minimize them for their customers and make money doing it. You can too!

2. When you stop and think about it, you have resources you are under utilizing and you easily can tap into them and
create new revenue sources. For example, at US Airways the only way to get into their Club Room was to buy an
annual pass for approximately $300. Now on any given day, they place a sign out in the hallway that suggests you
come in and buy a day pass into the Club. You also can buy a day pass when checking in online (convenience for the
traveler is a great tool for blue ocean revenue generation). This approach is also very easy to execute and manage, as
on high-demand days they simply don’t offer the program.

3. Make your restaurant or social areas the place for guests and locals to work, telecommute and meet. And when you
make your public spaces more appealing for business people, you will sell coffee, meals and can offer other amenities
that will generate revenues. Starbucks has managed to create an entire community of business people who hang out
and work and continue to generate revenue. How? They don’t try to get you to leave or seat with traditional turn-the-
table thinking of most food-and-beverage operators. They offer reasons to stay and spend, like inexpensive refills, free
Wi-Fi (which in some locations they charge for) and enjoyable music from known and unknown artists, which allows
them to sell thousands of CDs—stealing sales from music stores.
So what does it take for you to create new oceans for your business?
• Value Innovation—it’s a perspective that most people don’t have as they are stuck in the way they have
always done it.
• Ask different questions
• Look at what is and find what else
• Be disciplined with your team and create and capture new demand sources
• Rethink everything!

Renie Cavallari is CEO and Chief Inspirational Officer for Aspire, an international training and marketing consulting
company. To have Renie come speak to your team on how to tap into new markets and create blue oceans ,please
reach out to renie@aspiremarketing.com
Design Trends Prepare now for next wave of renovations
June 15, 2010
By Chris Crowell
Hotel and Motel Management

Las Vegas–As the industry inches closer to recovery, and before any substantial new development comes online,
renovations and conversions continue to take priority. And because of tight wallets and competitive market conditions,
designers will be asked to do a lot with a little—and quickly.

“There’s an incredible opportunity [for designers] to work … but how can you get as much value out of $1, and make $1
look like $2 and not fall apart?” asked Roger Hill, CEO of Gettys, speaking on a panel at the Hospitality Design
Exposition and Conference in May.

In particular, Hill discussed the multitude of distressed hotels that are on the brink of turning over to new owners or
being repositioned in the market with a new financial strategy. All of these properties will need refreshment or
renovation to gain market share.

And it doesn’t stop with distressed properties—renovations remain a top priority across the industry for the next three
years, he said.

“Properties pushed investments back the past few years,” said John Boettger, SVP of asset management for Hilton
Worldwide. “You’re going to see that recover this year and then accelerate into next year. … [Owners] are going to start
to see their older hotels lose market position.”

According to Bruce Ford, SVP of Lodging Econometrics, the start of a new-build cycle is at least as far away as 2013 in
the U.S., making conversions more attractive, at least for the lower chain scales. 

“The type of conversions you’ll see are relatively far down the food chain,” Boettger said. “You won’t see a lot of
Sheratons convert to Hiltons. It’s not going to happen. If they have a problem, they’ll solve it or they’ll get rid of it.”

All of this leaves the design community with plenty to do, but these jobs also will be more competitive, tense and involve
a shorter timeframe and less pay, according to panelists at the conference.

“Clients have had two years of no reserves,” said Warren Feldman, SVP of Jonathan Nehmer + Associates. “They will
squeeze our budgets [as a result].”

But not all jobs will feel the squeeze the same way. The area designers focus on will depend on the owner or buyer’s
ultimate goal: If the owner wants to quickly improve the property in order to sell it, the focus should be on guest-impact
items. If the owner plans to keep the asset long-term, infrastructure is the first priority.

Ron Kollar, chief design officer at Tishman Hotel Corp., said his company frequently does an initial property assessment
to determine how much is needed to get the property in basic shape before the company even thinks about FF&E
investment.

“Reality is, you have to bring hot and cold air and hot water into the room and have windows that don’t leak before
[anything else],” he said.

“Focus on what makes the transition from a 20-year-old property and bring that around in a visible way without breaking
the bank,” Kollar said.
 

 
Renovation tips

 Use manufacturer stock products rather than custom

 Use neutral colors to avoid trends
 Carpet, bedding and art are great quick improvements
 Labor-intensive work is cheaper today
 Many jurisdictions will help fund green hotels 

Cost and time

One benefit to renovating in a down period is that most other costs are down as well. Owners hand designers a smaller
budget, but with construction costs down, designers can get more value.

Depending on the area of the country, certain updates might make more economic sense because costs are dropping
differently. Labor rates have held better in union areas, Feldman said, and in regions where unemployment rates are up,
labor rates have gone way down, as much as 25 percent in some places.

Feldman said construction costs are down anywhere from 15 to 25 percent, but overall, the most value is in labor, with
material costs not dropping as dramatically. These differences should be considered when planning a renovation—a
higher priority should be placed on labor-intensive jobs like wallcovering or painting as opposed to jobs that carry a
higher material cost, like stonework.

Panelists agreed the time to act on any updates is now, for several reasons. For one, forecasts indicate the market will
start to improve in three to six months. When conditions improve, costs go up, so renovating in this window of
advantageous pricing is crucial.

“We have access to significant cash reserves and there are other owners like us, who will take advantage of the
competitive bidding that was developed in this economy,” said Richard Senechal, SVP of facilities for Loews Hotels and
Resorts. “If you have money, it is a great time to renovate.”

Second, as the market improves and budgets loosen, renovations and improvements will become much more popular,
placing a large demand on vendors and manufacturers to ship materials. For example, bedding, carpet and artwork are
the most in-demand products right now. As more projects renovate, the lead times for these items will get longer, which
will prolong the renovation and cost everyone more money, Feldman said. In fact, the poor economy has already
created this issue.

“Manufacturers have drawn down inventories,” Feldman said. “Stock items don’t really exist that much anymore. Yes
they can make it, but they don’t have a big pile in the warehouse.”

But Kollar still advised staying away from custom items in most of today’s renovations. Just choose items manufacturers
have and that they’ve made 100 times before.

“You have to get smarter about the budget,” he said. “Designers and architects and owners have to be cognizant of how
to work with each another and the budget. Don’t show me something I can’t afford. And [designers] are going to be the
ones who have to go back and design and reselect to trim down the budget.”
Trends
Panelists said owners are gravitating to more timeless looks, to avoid the ups and downs of the design trend world.

“Keep the box as neutral as possible to help in the future,” Feldman said. “People are not going to be willing to go out on
a limb, and they want to know for every dollar they spend they’re getting a $2 impact.”

Howard Wolff, SVP for WATG, said even luxury hotels are looking for a less-trendy look.

“The days of overpricing undersized, trendy hotels are over,” he said. “Owners don’t want the pressure to spend money
to update and renovate every year. Hotels with a history can use their age to their advantage.”
Guestrooms

Start thinking about technology early in the design

process
June 1, 2010
By Paul J. Heney
Hotel and Motel Management

Design and technology is a marriage that should come standard with two therapy couches. Whether the rocky
relationship can be blamed on the owner/developer side or the design side is a debate for another day. Suffice it to say
that the relationship needs to be worked on from the very beginning.

“The discussion of how technology should be implemented should begin immediately—however, with the understanding
that trends are trendy and can be yesterday’s news before opening day,” said Ben Bethel, owner/GM of The Clarendon
Hotel. “As an owner who’s also a designer, I look carefully at what is actually needed to enhance the guest experience
versus what would become a budget-buster.”

The early design phase is key, agreed Stina Funch, senior designer, HBA/Hirsch Bedner Associates.

“As technology solutions are integrated into the room experience, it’s imperative that a clear direction and goal is
established early in the game to allow for the best aesthetic solutions,” Funch said.

“With the new technologies that are available, they really need to be incorporated in the initial design phases to be well-
programmed into the spaces. These come into play with so many of the aspects of the guest experience as well as the
function of the guestrooms,” said Matthew Marsili, interior designer, Baskervill.

Jörn Bühring, VP, Hospitality Americas, Bang & Olufsen said that architects and interior designers are learning to
embrace in-room technology in order to balance design, form, function and human interaction across elements from
room automation to in-room entertainment options.

“Typically, the earlier specialist vendors engage with developers and designers to define the requirements … the more
precise and relevant a solution blueprint can be developed,” he said. “For new-builds, a minimum of 18 months lead
time prior to opening is ideal, as design, wiring, cost/benefit analysis and budgets are being locked in.”

Guests evolve along with technology

Travelers today do a great deal of work on laptops and use a lot less paper, said Howard Pharr, president, HBA/Hirsch
Bedner Associates. Communications are e-mailed rather than faxed. And less paper means less reliance on large
desks, which means the desks in guestrooms need to be smart desks, with ways to recharge computers and cell
phones.

“Guests do more work in their rooms and travel with fewer co-workers—meaning they use the guestroom more of the
time—dining in, for example,” he said. “People at home are used to large-screen, flat-screen HDTVs and expect the
same in their guestrooms, with the ability to access their e-mails wirelessly, check out from their rooms, etc. Bathrooms
are larger and more open, making guestrooms more like spa rooms, with technology in guest baths also important.”
Bob Tierney, architect, Baskervill, agreed that the large formal desk is not as important as a comfortable place to sit or
recline with a laptop or handheld device.

“I watch my daughter use her laptop and she is never at a desk or table,” he said. Instead, she is “usually lounging
around the house in a comfortable place with good indirect lighting and not a lot of glare. Niches, soft seating, etc. has
taken the place of the desk,” he said.

Jörn Bühring, VP, Hospitality Americas, Bang & Olufsen, stressed that notebook computers and iPods have shown
hoteliers a large amount of content is brought into the guestroom by the guest.

“Whatever the guests’ motive, business or leisure travelers alike have demanded a re-think of how today’s guestroom
needs to connect with the outside world,” he said. “The introduction of flat-panel TVs has also played a huge role in how
guestrooms are being designed today. Once hidden away in all forms of cabinetry, today’s TVs are on display, with
designers now needing to understand the way this technology is going to evolve into the future. While display sizes may
vary, the designer’s prime focus may lie in the understanding of how this medium will play a critical role in the overall
guest experience, today and into the future.”
How guests use technology is critical for designers to
understand
October 9, 2009
By HWN Staff
Refresh Campaign -- Hotel Design

Part 2: Marrying design and technology

By Paul Heney, Editorial director

Hoteliers and designers often struggle with getting the right mix of technology into a property, and battles sometimes
ensue when the two groups don’t see eye to eye. Panelists at this year’s IHIF Asia Pacific conference stressed that it
was important to get into the mindset of the guest.

Terence Ronson, managing director of Pertlink, cautioned that staying current in technology is a tricky business.

“Blu-ray is now standard, but do we know what is being developed two or three years down the road? It’s difficult,” he
said. “You’ve got to try to go as wide as possible and allow for backwards compatibility for some of these items,
because there are some people out there saying, ‘I can’t change my mp3 player every six months.’ But then again, you
have to try to be a leader, a trendsetter.”

Ronson described a typical guest coming into a room, and said that they look to get their computer connected and then
turn on the TV, to look for a 24-hour news station.

“They want to see what’s going on with so many world events taking place,” he said. “The [next] thing is to watch sports.
Everything else becomes second or third place on the TV. There’s not much demand anymore for [paid] videos,
especially when you can bring the content with you on your notebook or your iPod or your iPhone or some sort of mp3
or mp4 player.”

Ronson also described the demand for guests to plug in and attach their devices to the room’s TV. Lastly, he said, was
a guest’s desire to be able to work, both in their room and in the public spaces of the hotel.

“People want to work in a relaxed environment, so if they want to go to the coffee shop or the lobby and sit around and
have informal meetings, they want to be able to get online and use it as an extension of their office,” Ronson said. “One
thing that we really try to work with interior designers with is to say that if you’re going to expect people to work in these
public areas—and probably generate food and beverage revenue—give them a power socket. Give them the ability to
easily plug in … most computers don’t have an extended battery life.”

Low-tech is important, too

Iain Roebuck, associate director, Smallwood, Reynolds, Stewart, Stewart & Associates reminded owners that
integrating technology into design also gets into more low-tech, sustainable practices.

“We have to be careful that we don’t rely too heavily on hardwire technology when we should be looking at the
fundamentals of design. The way a building’s oriented, the materials within a building itself, that’s what we should be
looking at, as well. One of the biggest problems is not power but water,” he said. “In some [countries] where we do our
hotels, water is the biggest issue. … Operators should be working together to have some sort of centralized laundry
facility in [each] town. So, not only do you take [those frustrations] out of the hotel, but you become very efficient in the
way you use your water supply. But operators don’t trust each other, and that’s a very frustrating thing.”
Scott Dunn, regional director and principal, tourism and hospitality at EDAW/AECOM, agreed that water was a big
issue, and that it was a difficult sell.

“One of the things we proposed [in Macau] was a gray water recycling system for all these hotels, but that was
something that, unfortunately, didn’t make it very far,” Dunn said.

According to Scott Whitaker, executive director and founder, dwp, getting the technology of sustainability right is
important. He thinks that the limited service segment may have the upper hand.

“With the limited service hotels, a lot of them are generic,” Whitaker said. “They’re repeating and repeating, but it’s
easier to refine the design and really get the environmental aspects perfect. It’s a lot easier than designing a new five-
star hotel [each time]. So I think that the economy hotels will see a lot of the advance in environmental and sustainability
because they’re more of a packaged item.”

Roebuck went one step further, and pushed for increased density.

“Frankly, I think the future is mixed-use development,” he said. “It’s a much better way of using resources. It’s just a
smart way to go.”

BACK TO TOP

Brooke Pearsall on educating clients

“What we’re doing right now, more than ever before, is educating—talking to clients about what they’re buying, why
they’re buying … or getting them involved in different sorts of pricing structures so that they’re involved in the decision
making process. Historically, a lot of times they would just give us a number and take it on faith that we would make
good recommendations. Now they want to know why they’re investing in something, what it’s going to do for their
property—are they going get their to money back?”

Brooke Pearsall, HVS Compass.

BACK TO TOP

Product spotlight: Stone Forest

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bamboo, copper, iron and hardwoods. The new line features fresh interpretations of the
classic stone console sink, as well as a transitional vanity in Carrara marble. Also included is
an expanded line of bathtubs carved from single blocks of stone in a variety of materials such
as black granite, limestone and multicolored onyx. The Rubix bathtub in Carrara marble
transforms the classic material into a sleek, geometric shape. The collection also features a
multicolored onyx pedestal sink, a white bronze vessel sink and a contemporary sink in
double-walled copper. www.stoneforest.com
Simple mistakes to avoid when designing for
technology
June 1, 2010
By Paul J. Heney
Hotel and Motel Management

Thinking that “more is better” and overcomplicating things is a problem many hoteliers make with technology, said Jill
Cole, managing principal, Cole Martinez Curtis and Associates.

“The average guest is not a gadget guru,” she said. “Guests can become very frustrated by a TV remote they can’t
remote operate intuitively. Even clock radios can be an annoyance for the guest who arrives late and tired. He or she
generally wants to be able to set the alarm and go to sleep without having to call the front desk for instructions.”

Jörn Bühring, VP, Hospitality Americas, Bang & Olufsen, warned hoteliers not to make the assumption that guest-
oriented technology applications should be focused primarily around business travelers.

“[In one property], a certain level of tech-savvy was assumed, so that simplicity and ease of use was given less focus.
The advancements in in-room automation—light, curtain and climate control—saw traditional switches being replaced
with touch-sensitive pads or screens. Guests did not always feel comfortable or willing to spent valuable time
familiarizing themselves with otherwise simple commands ... when selecting a TV, the only criteria may have been
screen size and price; that now needs to be given far greater attention as guest expectations and their perception of
quality has matured rapidly,” he said.

Matthew Marsili, interior designer, Baskervill, said that he finds it unbelievable that some hotels still don’t offer wireless.

“Most hotel rooms stop with the flat-screen television as a technological breakthrough. Entertainment is only one piece
of the puzzle,” Marsili said. “We need to offer a better way to connect to other travelers, the hotel, as well as the city
they are in.”

Ben Bethel, owner/GM, The Clarendon Hotel said that hoteliers are often sold on the idea that guests want cutting-edge
technology in their rooms, but he’s found the opposite to be true.

“Guests want to feel comfortable in using familiar technology,” Bethel said. “Guests don’t want complicated lighting and
climate controls, in-room computers, on-screen guides, electronic curtains, and phones with 20 buttons. Hoteliers need
to understand this—the future is in integrating technology into guestrooms to the point that the technology is invisible.”
 

The guest of 2015—what will they want?

Take a look at any member of Generation X and you’ll get a good idea of where technology trends are headed.

Howard Pharr, president, HBA/Hirsch Bedner Associates, said that this new generation will have a much different
mindset.

“[They will have] less guest loyalty to brands, more interest in the latest [technology],” he said. “Not your grandfather’s
hotel room. Provisions need to be made to cater to their culinary tastes—more casual food on room service menus,
more fun foods—and more innovative beverage service. Guestrooms need to be more hip, even fun.”
“I really think the use of personal IT devices is going to be important—and the environment of the guestroom needs to
support that, said Bob Tierney, architect, Baskervill. “All aspects of the guestroom including lighting, climate control,
audio, visual, connectivity and natural light will be controlled with a much more intelligent, integrated and user-friendly
way.”

Ben Bethel, owner/GM, The Clarendon Hotel said that with advancements in technology focused on personal electronic
devices such as smartphones, netbooks and tablets, guest needs are going to be focused purely on providing excellent
service and comfort.

“I doubt the industry will see any revenue from video on demand, Internet, or telephone calls [in] five years. Rather than
the focal point of guest rooms being the television or the desk, the focal point will hopefully be a living area looking out
onto a pool, beach or street scene,” he said.
And before you forget that many of the fortunes of the hospitality industry are tied to the airlines, Jill Cole, managing
principal, Cole Martinez Curtis and Associates, reminds hoteliers that air travel will continue to affect guestroom design.

“Due to the high cost of building or renovating hotels, designers will have to rethink ways to meet guest needs in less
square footage. … Airline policy means guests travel with less baggage, so most hotel rooms probably do not need to
offer as much closet or drawer space as before,” Cole said. “On the other hand, hotels should start thinking about
offering more and better toiletries—the 3-oz. rule seriously limits what can be carried aboard.”

Bethel said that in five years, we will see hotels built without chillers/boilers, rolled carpet, separate hot water lines,
wireless Internet access, in-room telephones, video on demand and cable/satellite on televisions.

“Hotels will see more 20-30 SEER mini-split HVAC systems, as opposed to wasteful chiller/boiler systems. Properties
will use adhesive-free carpet tiles from companies like Interface instead of using tack strips, adhesive glues, foam
padding and rolled carpeting. Guestrooms will have on-demand water heating, cutting plumbing costs in half for
builders,” he said.

“We will also see guestrooms without phones ... guests will obtain high speed Internet access through their phones,
aircards and wirelessdevices. A lot of guests—even despite having 42-inch or 50-inch flat screen TVs with built-in DVRs
—never turn on the television in their rooms. They would rather watch TV shows over sites like Hulu.com and movies on
Netflix.com than try to figure out local programming schedules and complicated television controls. Even light switches
should be wireless, reducing the need for hundreds of feet of copper in a guestroom.”
Restaurant/Bar

Trendlines: Restaurant & bar design

March 18, 2010
By Chris Crowell
Hotel Design

Common mistakes in hotel restaurant design stem from focusing too much on the first word—hotel—and not enough on
the second. Thinking too much of the hotel guest and the hotel’s design will do little to add spice to this revenue-
generating space.

Instead, find inspiration in the menu.

“We like to see a full menu at the start of every project,” says Robin Ziv, a partner at the Ziv Davis Interior and
Architecture Studio. “We want to understand what the chef is trying to achieve, what the character is.”

For example, today’s trend in foodservice is locally sourced, farm-to-the-table choices. Ziv worked on Meritage, a
rejuvenated restaurant at the Claremont Hotel Club & Spa in Berkeley, Calif., which features this concept. The
emphasis on food quality is so strong the refrigerator is located in the center of the restaurant. Ziv’s big focus (other
than designing around a refrigerator), was deciding what colors and furnishings would exude the idea of local foods and
local culture.

“It’s all about being fresh—slightly formal, but not that formal,” Ziv says. The carpet in the restaurant already had two
shades of green, and Ziv decided to add a dark blue for that
Photo by Stacy Zarin Goldberg
freshness.

The design “needs to be fresh and clean like the food we are serving. It’s a complete contrast to the bar, [which is a lot]
of dark wood. By going through the darker zone, the restaurant reads twice as bright.”

Unfortunately, not all projects have the benefit of knowing a complete culinary point of view because the chef is often
hired closer to the opening. Jane Humphrey McGoldrick, senior designer/project manager for Puccini Group, says that
shouldn’t be an obstacle because there is always a general theme to play with. Even having one tidbit—that there will
be a heavy focus on the wine list, for example—can drive the entire design.

Recently, at The Ritz-Carlton Laguna Niguel, McGoldrick and her group set the restaurant’s wine collection in the
middle of the restaurant, in a glass box, making it visible to the guests.

It’s about “emphasizing, or finding original ways of creating displays—making [a drink collection] like an artwork feature.
Think about the cost of that wine collection … it’s like looking at gold bars,” she says.

And if there isn’t a chef, McGoldrick says to reserve some money in the budget for place settings, branding elements
and cosmetic or back-of-the-house changes for when the chef does arrive with the restaurant’s final culinary vision.

Hotel Monaco, Baltimore

Kimpton’s Hotel Monaco Baltimore, housed in the former Baltimore & Ohio Photo by Stacy Zarin Goldberg
Railroad headquarters, blends the grand history of its location with bold and
whimsical décor. The Puccini Group designed the property’s B&O American Brasserie restaurant. The standout feature
is the restaurant’s bar, which looks out of a large window, giving guests a view of the historic street instead of a cash
register and bottles of alcohol.

The Lanesborough, London

Less than five months after opening, Apsleys, The Lanesborough’s
upscale restaurant, received a Michelin star. The creativity and
luxury of the menu complements the grandeur of the décor, creating
an experience that is ideal for both a
formal business meal and relaxed social dining. The dining room,
which is located under The Lanesborough’s famed conservatory,
was designed by Tihany Design.

The Claremont Hotel Club & Spa, Berkeley, Calif.

The Meritage restaurant at the Claremont is both modern and vintage, bringing together the original design elements of
the historic space and complementing it with a fresh new color
Photo by John Benson
palette and English country- and coastal-inspired designed
elements. San Francisco-based Ziv Davis Design and Architecture
Studio created a large lounge and bar area, a main dining room offering unobstructed views of the San Francisco Bay
and several private dining spaces.