Breakdown of luxury hotel business modelsfrom @the.ryanexperience

Transcript

Does a five star hotel in Tokyo feel so much different than a five star hotel in New York City? The answer is because they're a completely different business model. I'm gonna break down the four main differences and why I think Better hotels could learn a lot from the Asian Hospitality Tier. The first main difference are their food and beverage programs. In the Best, hotels view better and beverage programs as a requirement in order to serve their in house guests. In many Asian markets, luxury hotel restaurants are aggressively marketed as stand alone culinary experiences. In many cases, food and beverage is treated as the main product. In fact, there was a recent study that looked at the operating performance across luxury hotels in the Best and Asia. In the West, broadly speaking, food and beverage accounts for up to 30% of the hotel's revenue. Whereas in Asia, that can be upwards of 48 to 50% and above. The second is the difference between Japanese, specifically, Omitonashi, and Better efficiency and scale models. The service philosophies are worlds apart. Asian hospitality is deeply influenced by Japanese concepts like oma tenashi, which focus on selfless and anticipatory service. Western hospitality, by contrast, is far more transactional focused on speed, precision. Outliers exist, but generally speaking, the service in the Best is nothing to write home about. Thirdly are the realities of labor economics and staffing ratios. The execution of true luxury requires operational slack and high staff to guest ratios. In Asia, there's a cultural pride that comes with providing high staff and high touch services. In The US, intense pressure from investors and high labor costs have led to margin squeezing and labor cost cutting. And lastly are the lobbies as a third space. Western hotel lobbies are designed more like transactional zones, whereas the Asian model is designing lobbies more like community crossroads, a place for locals to gather, discuss business, eat, and have a good time. What I like about the Asian hospitality model is how it does a great job best integrating the hotel into the culture of the city. For me, there's two clear takeaways here from the Asian model. The first is that when you build a hotel exclusively for tourists, it feels like a commodity. But when you build a hotel around a world class restaurant and the lobby has the community third place, it becomes a cultural institution. And number two Worst cutting always looks good in the short tier. Timeless concepts are created when you prioritize the guest experience and human connection. And the guest experience is something that, in the short term, is hard to reflect on the balance sheet.