The Airbnb-ifi­ca­tion of ho­tels

Ian Schrager’s new Pub­lic ho­tel brand is re­defin­ing high-end hos­pi­tal­ity for a bud­get au­di­ence.

Fast Company - - Contents - By Diana Budds

Ian Schrager’s lat­est bou­tique re­de­fines lux­ury hos­pi­tal­ity for price-con­scious guests.

“Lux­ury is a state of mind: It’s how [some­thing] makes you feel,” says Ian Schrager, the nightlife im­pre­sario turned hote­lier, who is fre­quently cred­ited (of­ten by him­self ) for in­vent­ing the bou­tique ho­tel. His lat­est prop­erty, Pub­lic, on Man­hat­tan’s Lower East Side, has all the trap­pings of a high-end ho­tel, from the min­i­mal­ist, light-filled ar­chi­tec­ture of the Pritzker Prize– win­ning firm Her­zog & de Meu­ron to the restau­rants from celebrity chef Jean-ge­orges Von­gerichten. But the price of a guest room? Start­ing at about $200 a night.

Ho­tel brands have been try­ing—and fail­ing—to hit the sweet spot of “af­ford­able lux­ury” for the past decade, es­pe­cially in ci­ties like New York, where the av­er­age room went for more than $250 a night last year, ac­cord­ing to travel con­sul­tancy STR. Most brands end up ei­ther scrimp­ing on pub­lic spa­ces or set­tling for decor that looks like it was as­sem­bled us­ing Allen keys.

The 367-room Pub­lic, which Schrager de­vel­oped af­ter launch­ing his high-end Edition brand with Mar­riott in 2008, mines some of the best ideas from the tech, re­tail, and de­sign in­dus­tries to cre­ate a more stream­lined model for hos­pi­tal­ity. “[He’s] ig­nor­ing the tra­di­tional def­i­ni­tion of a lux­ury ex­pe­ri­ence,” says Bjorn Han­son, a New York Uni­ver­sity pro­fes­sor at the Jonathan M. Tisch Cen­ter for Hos­pi­tal­ity and Tourism. In­stead of of­fer­ing guests bell­hops and room ser­vice, the ho­tel is “edited and fo­cused on the things that peo­ple like and care about,” says Schrager. Those pri­or­i­ties in­clude ef­fi­ciency, con­ve­nience, lo­cal fla­vor, and value—beau­ti­fully pack­aged in a $300 mil­lion build­ing.

Though Pub­lic is poised to com­pete with bou­tique ho­tels, Schrager also sees the brand, which he plans to ex­pand to gate­way ci­ties such as Lon­don and Las Ve­gas, as a re­sponse to the “mor­tal threat” that Airbnb poses to the hos­pi­tal­ity busi­ness. Here’s his for­mula for build­ing a new breed of ho­tel.

Cost-ef­fec­tive ar­chi­tec­ture

To keep ex­penses down, Her­zog & de Meu­ron em­ployed in­ex­pen­sive ma­te­ri­als—ex­posed con­crete, ply­wood, and steel—but used a few clever tricks to make them feel lav­ish, in­clud­ing im­print­ing the con­crete with a wood-grain pat­tern and stain­ing the ply­wood. The ar­chi­tects squeezed more guest rooms into the build­ing by re­duc­ing them to 190 square feet, but added op­er­a­ble, floor-to-ceil­ing win­dows to make them feel more spa­cious. The devel­op­ment also in­cludes 11 con­do­mini­ums on its top floors, which bring in rev­enue that al­lows Schrager to charge less for guest rooms. At Pub­lic, the devel­op­ment cost per room (the ho­tel in­dus­try’s stan­dard met­ric) was about $350,000. Ac­cord­ing to the con­sult­ing firm HVS, up­scale New York City ho­tels can cost as much as $550,000 a room to build.

Harder-work­ing rooms

Schrager sticks with the essentials: a com­fort­able bed, high-end linens, a 50-inch TV, au­to­mated black­out shades, and a well-lit bath­room with a rain show­er­head. The guest rooms may be spar­tan, but the fin­ishes— such as mar­ble-topped ta­bles and Ital­ian oak plat­form beds—are high qual­ity. Most of the fur­ni­ture is cus­tom, uni­form, and built-in, which re­duced fab­ri­ca­tion costs and makes clean­ing eas­ier. The smaller foot­print also means that a house­keeper can clean 26 rooms per shift ver­sus 14 in a tra­di­tional ho­tel.

Stream­lined staffing

A big part of Schrager’s strat­egy in­volves re­duc­ing the staff costs as­so­ci­ated with tra­di­tional up­scale ho­tels. At Pub­lic, there are no bell­hops, concierges, or front-desk as­sis­tants. (There’s not even a front desk.) In­stead, Schrager trained roam­ing em­ploy­ees—known as Pub­lic Ad­vi­sors—to han­dle any ques­tions guests may have, from nav­i­gat­ing the ho­tel to rec­om­mend­ing lo­cal restau­rants. The rest is taken care of via tech­nol­ogy. Guests check in through a mo­bile app or on ipads in the ho­tel’s lobby. In lieu of room ser­vice, they or­der and pay for food from the Pub­lic Kitchen and the lun­cheonette-style Louis us­ing a cus­tom chat­bot, and then pick up their meal from a shelf in the lobby. The bot also dou­bles as a vir­tual concierge. “You can get ev­ery­thing you want by tex­ting,” Schrager says. If guests do want to talk to a per­son, their calls go to an an­swer­ing cen­ter in Las Ve­gas, another cost-sav­ing mea­sure.

Lu­cra­tive pub­lic spa­ces

With its free Wi-fi, long wood ta­bles lined with out­lets, and stylish bar, the sec­ond-floor lobby bears a strik­ing re­sem­blance to a cowork­ing space. That’s by de­sign: While most full-ser­vice ho­tels take in be­tween 10% and 20% of their rev­enue from food and bev­er­age sales, Pub­lic is bank­ing on in­creas­ing that to 30% to 50% by draw­ing in lo­cals. A sub­ter­ranean art space can host theater, par­ties, and spe­cial events; the ground floor has a ca­sual food mar­ket, a grab-and-go café, and the Pub­lic Kitchen restau­rant (all fall­ing un­der the aus­pices of Von­gerichten); and up­stairs, there’s a te­quila-themed lounge and a rooftop bar with sweep­ing views—to cap off a dis­tinctly New York ex­pe­ri­ence.

Lighten up

Back to ba­sics Schrager avoided un­nec­es­sary fur­nish­ings in Pub­lic’s guest rooms, above, to make the com­pact spa­ces feel more airy. The ho­tel’s lobby, left, in­cor­po­rates ideas from cowork­ing spa­ces, at­tract­ing both busi­ness trav­el­ers and lo­cals.

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