Hotels As Social Hubs, Economic Engines

ROSEMONT, IL-For a better idea of what hotels can become in the future, we just have to look to the past. As many members of the Baby Boomer generation can recall, full-service hotels have long occupied an important place in communities across the country. As vibrant social centers and economic powerhouses, the hotel was the weekend destination of choice for families and singles alike. The hotel was the place to go dancing, to get married, to celebrate anniversaries or simply to get a nice meal. Just a few decades ago, hotels were glamorous and exciting—they represented something special, something more—and hotel bars, restaurants and lounges were places to see and be seen.

This is not nostalgia; it is a blueprint.

Today's hoteliers need to recognize the economic power that hotels still hold within communities, and they should be looking for opportunities to enhance their visibility and capitalize on the critical role that they play as social and economic drivers. While social and economic realities have changed a great deal over the years, there are still a number of valuable opportunities for hoteliers to capture (or recapture) that social magic and increase their bottom line.

Back to the future

Savvy and proactive hotel professionals are already moving in this direction, implementing strategies aimed at increasing their experiential potential, highlighting their dining and entertainment offerings, and boosting their social potential. The specific strategies used to achieve these goals vary somewhat, but they are primarily focused on additional investments and upgrades for dining and entertainment components, enhanced programming, special events and promotions, and aggressive and targeted marketing campaigns. Hoteliers are becoming smarter and more proactive when it comes to understanding emerging social and hospitality trends, and they have gotten better at appealing to influential and important demographic segments like Millennials.

For most hotels, that process starts with upping the social ante. The recognition that entertainment and social engagement add real and measurable value has led to a renewed emphasis on the lobby as more than just a utilitarian space. The trend towards designing lobby areas that are heavy on comfort and style and provide an abundance of opportunities for guests to gather, mingle and engage is evident both in renovations and new builds. The impact of a lobby that is warm, welcoming and alive with activity can be profound. It is no coincidence that this trend is particularly appealing to Millennials, who are much more likely to engage in social activity—to emerge from their rooms and mingle in the lobby, bar or restaurant area. Hotels are also adding unique social events and specialized programming to further capitalize on this trend.

Another nod to the social heyday of hotels is the renewed focus on the hotel bar. While we may never again see the hotel bar rise to its former glory as the premier gathering place in the community, many brands are reemphasizing and redesigning and repositioning their bar areas. In many cases, the bar is being brought out from the shadows and has been given new life right out in the lobby area, making it a natural and convivial gathering spot. Ultimately, it is all about improving the guest experience, and providing guests with more engaging and appealing social options.

New technologies—old priorities

When it comes to factoring Millennials into the hospitality equation, hotels are using very modern strategies to recapture the social dynamics of the past. Millennials' appreciation for gadgetry and expectation of technology and convenience means that integrating conveniences like hotel-wide Wi-Fi and free high-speed Internet access is a must. This is a generation of guests that expects to be able to use technology on their own terms. Power strips and charging stations are no longer just present in rooms, but are also available in many hotel bars and public spaces.

Technology must be accounted for and leveraged in other ways, as well. Millennials are famously intolerant of poor service, and are relatively quick to change their brand preferences and share their negative experiences with the world via a number of popular consumer websites and online travel resources. The positive side of that, of course, is that social media can be enormously effective in generating favorable buzz. Hotels can encourage their guests to broadcast their patronage at the hotel by providing special offers and incentives for regular “check-ins” on Facebook or Foursquare (which broadcast their whereabouts to online friends and networks). Those hotels that have been most effective at reclaiming their status as social gathering places and community icons have typically used sophisticated marketing and communications strategies that rely heavily on social media to do so.

Revenue streaming

For all of their social potential, arguably the biggest impact of a full-service hotel in a community is economic. The financial pressures of a sustained economic slump may have muddied the waters for a few years, but the continued growth and robust performance in recent years have helped call attention to the fact that a well-run hotel is a potent and powerful economic engine. In fact, there are few (if any) enterprises capable of making a more speedy and significant economic impact on a community.

A new hotel provides an almost immediate revenue stream in the form of sales taxes, and a potentially dramatic boost to the local employment landscape. In addition to likely employing hundreds of local workers, hotels often have an economic “ripple effect” that stems from selling and distributing locally sourced and locally produced goods, and boosting the bottom lines of area businesses through additional traffic. Hotels also have enormous potential as a special events venue for celebrations and gatherings both grand and intimate. Having a hotel capable of hosting a conference or other professional gathering not only fills the community coffers, but it elevates the status of a city or town in a way no other business can really match. A full-service hotel is both a resource and a destination unto itself, a magnet to bring both business and leisure traveler in, and to keep them there longer.

In addition to rebuilding their social potential and understanding their economic influence, hotels need to be vocal about their value to the communities they serve. Generally speaking, hoteliers have not done an outstanding job broadcasting that value, and improving internal and external messaging moving forward is critical. Outreach is a big part of that, connecting with civic, business and political community leaders who are statistically more likely to use hotel facilities for special events and appearances—and to appreciate the important role that hotels play in the community. This is not just an issue of public relations and increased awareness, this is also about teaching a traditionally insular industry to be a loud and passionate advocate for its own interests. Making your voice heard by advertising your value and emphasizing your priorities can have an impact that resonates on everything from regulatory decisions to economic policy.

Whether it is upgrading the technical infrastructure or enhancing the social atmosphere, hotels are beginning to respond more nimbly to emerging trends and to understand how to integrate those changes into their business model in a way that maximizes the social and economic impact. Ironically, in many respects they are looking to the past to see the way forward. The best hotels are realizing that, like the grand hotels of a few decades ago, they can—and, in fact, they must—provide a great deal more than a roof over their guests' heads. They can be vibrant entertainment venues, bustling social and community centers, and they can occupy a bigger and more important place in the community than they have in decades. Hoteliers who can consistently realize their potential as social venues, forge strong community connections and serve as effective advocates for their own interests, will not only boost their own bottom lines, they will do so in a way that is both transformative and sustainable.

Robert Habeeb is president and COO of First Hospitality Group Inc. The views expressed in this column are the author's own.