WATCHES
Breitling’s image has long been derring- do, even macho. But with a new CEO and smaller watches, the Swiss company is now getting in touch with its feminine side
Breitling reveals its softer side
You know Breitling. You’ll have seen the ad campaigns – fronted by John Travolta, and until recently, David Beckham – at the airport. Perhaps you’ll have seen the enormous Bond Street premises in London, and the nearly as enormous watches. Breitling has courted controversy with its boutique decorations of pop-art pin-up girls astride bulging missiles; it holds the industry’s largest and wildest party at the annual trade fair in Baselworld (helicopter displays, Jacuzzis, dancers and live animals); and it runs one of the world’s few private air display teams. It’s one of the larger manufacturers, making some 140,000 watches a year, but for all that it hasn’t quite been on top form recently.
If Breitling were a person, it would be that friend from university who hasn’t quite left his partying twenties behind. You know the type: a first-team lad with a crooked jaw and full-volume laugh, who scraped a 2.1 in Economics despite sitting his last exam in a skirt from the night before. Now he’s 43, and his friends have made partner at the firm, moved to the country and have a Porsche in the drive. Meanwhile, he’s still got the bachelor pad in east London and a hangover every morning. Natural talent, force of personality and a good family name have got him so far, but there’s a wake-up call in the post.
Having changed hands last year in a deal that valued the company at over a billion Swiss francs, Breitling lost no time in appointing a new CEO, Georges Kern (formerly of IWC), and he has his sights firmly set on a more grown-up approach.
What does that look like, you may wonder? In January Breitling launched a new range of watches called the Navitimer 8, a whole family of new models that riffs on its most famous watch, the Navitimer (which the company first launched in the early 1950s), and balances modern sensibilities with a backstory that connects it to chronographs produced by Breitling in the 1930s aimed specifically at aviators. This new set includes basic automatics as well as chronographs, and also does away with the slide-rule bezel, an iconic hallmark of the Navitimer (and one that very few today know how to operate). These steps had die-hard fans spitting feathers, and other scratching their heads, but it all needs a bit of context.
Kern is determined to simplify Breitling’s offering, and to that end is reducing the number of models offered by the brand from around 650 (that’s if you include strap and colour configurations) to around 120. These will all sit in four families: Navitimer, Superocean, Chronomat and Premier. Within those, there will be a range of complications and clearer visual indications as to where a model sits in the hierarchy. For instance, a 3-6-9 highcontrast chronograph layout for watches with the in-house B01 movement; 6-9-12 monotone designs for those using third-party movements. It’s all overseen by newly poached creative director Guy Bove (who is ex-Chopard and IWC), but all aimed at making a Breitling as recognisable as a Rolex.
That’s a huge binning of models: the Colt, Avenger, Galactic, Chronoliner and Montbrillant ranges won’t be sorely missed, but I hope the Transocean gets a stay of execution. Also destined for the chop are the brand’s quartz watches, and the misogynistic image – new ad campaigns will show men and women conquering the great outdoors together. Belatedly, Breitling will engage with trends such as the use of bronze, bi-metal designs and interchangeable straps, and there will be a concerted effort to sell watches to women.
The plan makes sense, so let’s look at the Navitimer 8 in that light. I’m not offended by the less-cluttered look; I think the simple automatics look even better than the chronographs (where I can’t help being vexed that the notched bezel looks like it should rotate, but doesn’t). We’ll see 38mm versions, ostensibly for women, and new colours on the Navitimer 01, in more familiar 46mm and 43mm sizes. Later in the year Breitling will introduce the Premier, a more elegant range that should take the brand yet further into the mainstream.
Breitling has launched a family of new models that riffs on its most famous watch, the Navitimer
...you have when you are negotiating contracts, and your loyalty programme helps drive savings for everyone. The ultimate measure is your share of occupancy that is coming through the loyalty platform. It lowers the cost of acquiring the guest for owners because it’s not coming with a 10 or 20 per cent commission, and so you want the best technology platform available.”
FEWER BUT BETTER
However, not everyone believes a proliferation of brands is best. Scandic Hotels has only two brands – Scandic and Downtown Camper by Scandic – yet it is the largest operator of hotels in the Scandinavian and Nordic region with 280 hotels (55,000 rooms) in six countries. CEO and president Even Frydenberg, who previously worked at Starwood Hotels and Resorts, knows all about the power of brands; yet while toying with the idea of a further brand, he certainly doesn’t plan to head for double figures. Why should he? “We are very big in one region, but that region is made up of several countries with different economic drivers. It gives us a better base to stand on. Our success is being concentrated on certain markets, so we can quickly get the benefits of scale.” Instead Scandic is continuing successful expansion in Germany and Poland using the Scandic brand, though even here Frydenberg doesn’t rule out introducing a new brand.
It’s also true for other global brands that biggest isn’t always best. Peter Norman, Hyatt’s senior vice president of acquisitions & development, admits that Hyatt “is never going to be the size of the others, and that’s not our strategy.” Instead, Hyatt concentrates on “growing responsibly and sustainably,” an approach that has seen it reach 700 properties in more than 50 countries across six continents, yet it is still only one-tenth the size of Marriott.
“We can show that our hotels outperform the competition in many of the markets, and that’s because guests love the hotels,” says Norman. Hyatt’s growth is coming through existing and new-ish brands such as the Hyatt Regency in Dusseldorf, the Hyatt Centric Gran Via in Madrid, the Hyatt Place at Frankfurt Airport and Andaz (a Munich property will open at the end of 2018). It also has the inevitable collection brand (called the Unbound Collection) with famous properties such as the Martinez in Cannes joining it (see Upfront, page 16) and, at the end of 2018, a new central London property in the former home of the Metropolitan police called (in full) The Unbound Collection by Hyatt, Great Scotland Yard Hotel, London.
It’s not just large hotel companies creating (or acquiring) new brands. There are smaller companies creating innovative chains, with Citizen M being one that many admire. Nevertheless, Sébastien Bazin makes a point about these smaller brands: “These interesting funky trendy brands, they are sexy from year one to year five, and they maybe grow to 25 properties, and then they aren’t as trendy as they once were. They don’t have the loyalty from customers, they don’t have the bookings, so they pay big percentages to the OTAs [online travel agents], and they are not happy about it, and then they start to look for an umbrella and they come to talk to the big operators.”
BETTER TECHNOLOGY
The other big push by hotels is in technology, though unlike the consensus on brands, here opinions differ. Hotels have become far more sophisticated at capturing our custom directly rather than through third parties (such as the OTAs) by using hotel loyalty programmes to offer benefits such as points and free wifi. Once they have our personal data through the programme, it allows them to market directly to us and also to “personalise” our experience, something of a buzzword in recent years.
You will also see better technology in the rooms, though it's certainly taken them long enough. Most business travellers of a certain age will remember how hotel rooms only offered a couple of wall sockets for power, just above the skirting board, and often with a lamp already plugged into one of them. This even applied to luxury hotels. On one occasion in New York I was met by liveried doorman, had my bags whisked up to the room and was offered a welcome drink, yet a few moments later, wanting to work, I was under the desk on my hands and knees trying to plug in my laptop. The good news is that finally the new designs have caught up with our need for power. The Holiday Inn Express I stayed in during the recent trip to Berlin for these two conferences had eight power sockets in that one small room, and a USB charger incorporated into the power socket by the bed. It almost made up for the fact that the room flooded for two out of the four days.
At least there was free wifi. Hotels are still trying to charge for this, of course, and many have introduced complicated (and largely ignored by customers) two-tier pricing, where basic speed internet is complimentary, and high speed (which few use) is chargeable. So what should hotels be doing on the technology front to satisfy not only the business travellers of today but those of tomorrow, “future-proofing” the rooms so they do not quickly become obsolete? Although a lot of innovation has come from trendy smaller brands such as Citizen M, the larger brands such as Accorhotels, Marriott and Hilton have all set up their own
“It’s a challenge to combine technology with hospitality to make guests’ experiences better”
innovation labs to test new technology. We have written previously about shower cubicles which allow you to sketch out your morning ideas on the steamy glass as you wake from sleep, and memory mattresses, but there’s much more coming.
HILTON AS INNOVATOR
To offer a glimpse of one version of the future technology we might encounter in hotels, Hilton brought over demonstration versions to the Waldorf-Astoria in Berlin. Jonathan Wilson, Hilton's vice president, product innovation and brand services, was on hand to explain them (you can see pictures on pages 40-41).
They included NuCalm, which promises to give users the equivalent of two hours’ sleep in just 20 minutes; and Nightingale, a plug-in socket device which emits white noise and combats common disruptions heard in hotels such as traffic, voices or construction work. Although these are being trialled, some innovations are further progressed. Hilton currently has rooms completely kitted out with fitness equipment in more than 30 hotels, and is expanding this scheme. The reason for doing so, according to John Rogers, senior VP brands and franchise operations EMEA, is partly “to make guests’ experiences better”, partly to provide a “real differentiator” between the Hilton Hotels & Resorts brand and that of its competitors, and also because all of this fits with Hilton’s history. “Hilton has a history of innovation,” Rogers claims. “A lot of things you see in hotels that are commonplace were trialled by Hilton – TVs, air conditioning, and hotels at airports.”
Rogers says that today innovation is changing more quickly than ever because it is being driven by technology, and “it’s a huge challenge for the industry to combine technology with hospitality to make guests’ experiences better.”
The amount of data that many companies have on their customers, and hotels have on their guests, will allow a new level of personalisation. “When you walk into the room it will be the temperature you like because we know it, and we could even have a picture of your family by the bed.” But Rogers is clear that “there is a line to draw. “You have to be careful that it doesn’t become creepy.”
THE QUESTION OF AIRBNB
No discussion of hotels (or between them) would be complete without mention of Airbnb. The company would like to be thought of as part of the “sharing economy”. As we first described the wider phenomenon back in 2013, “The principles at its heart are efficiency, democracy and trust – the last cemented by online reviews. Not only is it creating a new generation of micro entrepreneurs, but providing consumers with cheaper, more personalised services, products and experiences.”
For many hoteliers however, such sentiments would at best elicit a hollow laugh. They point to the fact that a significant proportion of properties are simply “buy-to-let” by professional landlords, and in some cities mayors and local authorities have used regulations to ensure that Airbnb lets run as a business (for example of more than three months) are forbidden. Airbnb itself says in the help section of its website: “Some cities have laws that restrict your ability to host paying guests for short periods. These laws are often part of a city’s zoning or administrative codes. In many cities, you must register, get a permit, or obtain a licence before you list your property or accept guests. Certain types of short-term bookings may be prohibited altogether. Local governments vary greatly in how they enforce these laws. Penalties may include fines or other enforcement.”
Nevertheless, there’s little doubt that despite protestations to the contrary, most hotel chains are worried about it. It’s not hard to see why. Just as serviced apartments generally costs less per night than a similar standard hotel room, so does Airbnb.
Forbes, the US business magazine, recently used data from German hotel reservation website HRS and the AirDNA site to compare prices on traditional and non-traditional lodging options in eight major cities. On average hotel prices were consistently higher than average Airbnb prices, and the differences were significant. In Tokyo, for example, the average price of a hotel room in January 2018 was US$220, whereas a Tokyo Airbnb would cost travellers US$93 per night. A stay in a New York hotel this month would typically cost US$308 per night, compared to US$187 for a typical Airbnb stay. The reasons are obvious. The overheads are lower, and there are fewer services offered (no restaurant, fitness centre, meeting rooms, 24-hour reception) meaning prices to the traveller can be lower. Airbnb doesn’t release figures on how many people are using its services.
As a result of this disruptive competition, hotel companies have fought back in a number of ways. Firstly, by pointing out to local authorities that the rules should be applied consistently to both hotel operators and Airbnb, or to the Airbnb owners renting out their properties effectively as hotel rooms. In recognition of the size of Airbnb, few have tried to launch new products against it. IHG has its own serviced apartment brand, Staybridge Suites. Accorhotels has Adagio, while serviced apartment operators Ascott has the Citadines Apart’hotel brand. Hyatt has built relationships so that members of its loyalty programme, World of Hyatt, can use their points towards Oasis, a provider of serviced home rental accommodations with around 2,000 homes across more than 20 destinations worldwide.
The last word goes to Accorhotels’ Bazin, who clearly recognises the threat of Airbnb – he bought Onefinestay, one of its competitors, in 2016, but now believes he has its measure. Airbnb had “impacted” Accor in 2016, less in 2017, and less in 2018, he says, and despite expressing admiration for the company, Bazin said that his belief was that Airbnb had “lost its soul”. “They were rock solid when the soul of the business was all about ‘You are meeting a local’, ” he told me. “Now two-thirds of Airbnb [venues] say it’s a host room, but there’s no host room and there’s no host, it’s a serviced apartment. No wine, no host. They lost their soul. They were volume driven but not emotion driven."
You can read more of the hotel news from both IHIF ( International Hotel Investment Forum) and ITB Berlin (Internationale Tourismus-Borse Berlin) on businesstraveller.com
...EMT will be busy coping with track improvements by Network Rail in the Derby area over the summer period. Train services will be disrupted on a daily basis for many weeks.
POSITIVE DEVELOPMENTS
VT is investing £7.5 million in rolling out free wifi to all passengers (in both first and standard class) on its Pendolino trains. Work starts in May 2018, and is expected to be completed by January 2019.
Some operators are relaxing restrictions with Advance fares. Normally these must be booked at least one day ahead. But VT has changed this to just one hour (prior to the departure), while Cross Country (which operates a complex route network) enables ticket holders to amend Advance bookings free of charge (from two hours after purchase to 24 hours before your journey starts). VTEC is offering first class upgrades via the phone app seatfrog.com; travellers have to bid for the upgrade. One point to note is that many of these offers require travellers to book direct with the respective TOC. As with the airlines, the TOCs want to encourage more travellers to book direct rather than book via online agents such as Trainline or Red Spotted Hanky. Some TOCs now make seat fare sales, and again these are for direct bookings only. Chiltern Railways (operated by Arriva) claims the rare distinction of opening a new stretch of track, namely one linking London Marylebone with Oxford. In doing so it is competing with the more established GWR trains running from London Paddington to Oxford. At the same time Chiltern Railways has improved service to Bicester Village (a shopping outlet), and now provides station announcements and signs in Mandarin and Arabic. Bicester Village is now the second most visited UK attraction after Buckingham Palace for Chinese tourists.
Chiltern competes with VT between London and Birmingham. Granted its trains take a little longer and use different stations (Marylebone and Snow Hill), but it charges less than VT, and travellers taking mainline services are offered the “old-fashioned” locomotive-hauled rolling stock that was considered the best in British Rail days.
One concern is that VTEC may hand back the franchise keys in the coming months. VTEC (which is 90 per cent owned by Stagecoach, 10 per cent owned by Virgin Group) faces difficulties paying its £3.3 billion franchise fee, which it was supposed to pay between 2015 and 2023. In response, the government has relented. It will let VTEC surrender the franchise three years early in 2020, and it will pay far less, though the exact amount is not yet known.
Since that announcement was made a few months ago the situation has become critical, according to transport minister Chris Grayling. And the recent snow disruption when the East Coast Main Line was closed north of Newcastle for three days will not have helped VTEC’s cash flow.
Bicester Village now provides station announcements and signs in Mandarin and Arabic