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Salorge, design by atelier arcau

JULIEN VEYRON

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Architect I CEO I Partner at atelier arcau & light human hotel

The hospitality industry is changing. According to the Department of Economics and Social Affairs of United Nations, the US Millennials, now well-known generation born between 1980 to mid-2000s, will outnumber non-Millennials by 22 million by 2030. According to the Executive Office of the President of the United States, in a report dated from October 2014 entitled '15 economic facts about Millennials', "Millennials, the cohort of Americans born between 1980 and the mid-2000s, are the largest generation in the U.S., representing one-third of the total U.S. population in 2013 (...) Millennials are also the generation that will shape our economy for decades to come (...)".

While Gen X is trying, in vain, to adapt its taste to the one of their parents - the Boomers -, for whom most of 4 and 5 stars hotels have been targeted until now, the new generations won't even try to do so. Indeed, experts have anticipated that they will be very different consumers when traveling. Considered as the most desired generation of children, 'Millennials' have always been treated as special and important. Main 'old' principles such as 'good bed', 'good shower' and new ones such as 'free Wi-Fi' won't be enough to satisfy all their expectations in the future. Because every milestone was marked with celebrations and praise, the empty, quiet and spiritless lobby will definitely not convince them for long.

'Millennials' tsunami is on its way for the next decades and that's pretty good news for all those who are tired about dusty brand standards! In a very competitive industry, innovation in hotels is a key to success. It provides visibility, raises awareness and helps positioning brand recognition and differentiation. It's been less than 10 years now that this psychographic change of Customers should have started to modify the hotel industry. Independent, environmentally friendly and Millennium focused, new stakeholders are arriving on this crowdie but always growing market. Boutique hotel and Lifestyle hotels have emerging with new Brands such as Citizen M, Mama Shelters (Accor) or Moxy hotels (Marriott). If these new brands came with a certain innovation, none of them have truly managed to make in the Hospitality industry the breakthrough that Southwest airlines managed to do in the 70's in the air transport industry. Hospitality industry is operating its transition and we can already observe it through for instance the disappearance of the traditional reception-desk and concierge.
What we know about Millennials, the next generation of travellers:
Fear of missing out when traveling? Want a story to share when going home? You got the millennial spirit! This is the motto of a refreshing Brand "Light Human Hotel" founded by a cluster of French entrepreneurs. With a new vision and a new strategy, Light Human Hotel is offering a highly differentiated customer value proposition, refreshing the primitive idea of what is a hotel. Deeply inspired by Next Generation's spirit, this whole new concept will open its first hotels in U.S. in 2016. With its unique je ne sais quoi, it might change the game in worldwide cities and print alternative guidelines for the next decades.

Born between 1980 and 2005, Millennials are 11 to 36 years old today in 2016. In their description of the Millennial generation (Millennials go to College, 2003), Neil Howe and William Strauss have noticed the most interesting characteristic. They 'have always been treated as special and important. This generation of children has been the most wanted. Every milestone was marked with celebrations and praise. (...) They feel they are here to solve word problems that older generations have failed to solve. They may claim they want privacy, but they crave attention.' Until today, very little literature can be found about the impact of Millennials' emergence on the hospitality industry in U.S. and worldwide. Teresa Y. Lee, consulting & Valuation Associate from HVS wrote an interesting research article in April 2013 concerning the trends and changes this generation will bring to the hospitality industry. The author has captured 10 trends that could drive the innovation in the sector.

Hotels required essentials are changing and don't make the difference: the basic of all hotels are clean bed, hot shower, and free Wi-Fi. Nevertheless, if free Wi-Fi is a fundamental for Millennials, they are expecting something else in a hotel. They are looking for a cool experience, a story to share on social media and when going home. This special experience will be even better if it is an authentic local experience. Millennials are not Tourists but Travelers. It means that they'd love to be integrated in the culture, to go under the skin of the city. Teresa Lee observes that "in order not to lose Millennials to these other forms of accommodations (Air BNB, couch surfing, and home exchanges), hoteliers much provide an equally authentic experience. Millennials are conscious about the planet fragility since they were kids and it is essential to them promoting social responsibility while traveling. It means that they don't only want to take away but to contribute to the community and the world.

Provide the amazing experience that you promised, or even more, and let the customers taking care of your development. But if you don't deliver it, be careful because whatever kind of marketing will be done, Millennials will always turn to their peers to check the real temperature and taste of hotels and restaurants. Teresa Lee tells us that "on average, a Millennial will check 10.2 sources before booking". Comments on Tripadvisor or Booking are nothing more than yesterday's word of mouth. The difference is that everyone has access to a huge amount of information. Millennials expect real time information. That's the reason why Hoteliers should embrace social media such as Instagram, Twitter. Hotels should organize events, parties, activities and communicate about it. Millennials expect efficiency in their travels and they prefer quality food to take-away (or to eat in the lobby) than traditional restaurant table service. Millennials cannot stand the idea that they are missing out something fun.
What we know about innovators in the hotel industry
Millennials are social creatures. They are not as individualists as previous generations and they use social media to identify and select the best to do in community. "58% of Millennials (20% higher than older generations) prefer to travel with friends." This is an important trend that should be taken into account when Designing hotels. Teresa Lee also tells us "Even if Millennials don't meet others in the lobby area, they do practice "isolated togetherness", being alone on individual laptops or phones, but doing it in a public area". While in the past, business travellers were working alone in their in-room desk, Millennials business travellers are looking for a "third space". For that reason, the lobby is being transformed into a multifunctional space were people can work and share.

We know that innovation has become fundamental in business today, especially in hotels. In this changing environment, no company can survive without being able to innovate from time to time. This rule will be even more essential tomorrow when Millennial travellers, with their appetite for innovation, will progressively have replaced Boomers in hotels. Petra Gyuracz-Németh, Nora Friedrich and Alan Clarke from University of Pannonia (Hungary) in "innovation in special hotels - as a key to success" have explored in 2013 the importance of innovation in hotels. The authors have highlighted that psychology, design and culture (non-management innovations) are the most important sources of innovation. Even if for instance technological innovations are necessary to improve Customer satisfaction, and they are leveraging hotel developments, they will not help in creating and sustaining a competitive advantage as every Brand, every independent can use it. This is what some new players understood earlier than others. By the end of 20th Century, a new brand called "AC Hotels" was founded in Spain by Antonio Catalan in 1998. Acquired by Marriott in 2011, with an ambition to import the concept to US focusing the Gen Y. "Design-led, urban, cosmopolitan and tailor-made for modern travellers looking for a new way of experiencing and feeling the city". Number of hotels: 80. Main innovations: guestrooms that feature free Wi-Fi, flexible work space with USB outlets, a mini refrigerator and 48-inch LED flat-screen TV. AC Kitchen with fresh-from-the-oven croissants, pastries, sliced meats, artisan breads and various spreads and AC Lounge with handcrafted cocktails and tapas. About the lobby, Marriot's Senior Vice President Paul Cahill says, "it represents a strategic and holistic approach to design, technology, and service that is truly relevant to the new generation of travellers".

In the early years of 21st century, an innovative Concept and Brand "Mama Shelter", France based Company founded by Serge Trigano and Cyril Aouizerate. First hotel opens in Paris in 2008. Since 2014, Mama Shelter is owned by Accorhotels. Number of hotels: 8. Main innovations: choice of geographic implantation into popular and intense neighbourhood. A whole Design concept, with minimalist style, is developed by Designer Philipp Starck. It is a hotel as well as a restaurant with reasonable prices for food and night fare. Things are happening: Dj's come to mix in the evening. Viral marketing through social media and word-of-mouth are the main tools to develop the Brand awareness.

During the same period in Netherlands, Citizen M is founded (2005) and opens its first hotel in Amsterdam in 2008. Category: 3/4 stars. Number of hotels: 7. The slogan is "affordable luxury for the people". Main innovations: The public spaces of the hotels feature the "Living Room" furnished with art and iconic furniture from companies such as Vitra, and where guests check-in themselves. Architecture is standardized and usually embraces International Style with large glass windows clad in black metal exterior wall. The rooms have so called 'mood pads' to control television, light and temperature from one device created by Philips.

Those last years all the main Brands are launching new hotels and adding new concepts to their portfolio. Andaz, upmarket design hotel brand by Hyatt. There are 9 so far (2012) - 6 in the Usa, 2 Europe & 1 China - with another 5 in the pipeline. W, a Starwood brand. W Hotels is a contemporary design brand with over 40 properties - hotels, retreats and residences - in cities and exotic destinations around the world, and plans to expand to 60 by 2015. The emphasis is on fashion, music and entertainment. Virgin hotel, US based Company created by Sir Richard Branson's Virgin Group, launched in 2010. Number of hotels: 1 in Chicago and 4 in the pipeline in US. Main innovations: The Brand is focusing on female travellers. The "Commons Club", a lounge for work and play and a library. A place for events and live music called "upstairs" gather customers with local community.

Petra Gyuracz-Németh, Nora Friedrich and Alan Clarke noticed that "The innovation is not so popular in this industry because the 'conservative and capital intensive nature of the structure, which promises a return of more than 25 years, is not conducive to innovation.'" That is a fact and that could explain why innovations in hotels seem to be limited. This is what we can observe when checking what has been done in term of innovations in the past 10 years.
The case of a new player: Light Human Hotel
Visiting W hotel in Miami and experiencing the cold, off the scale and empty lobby is enough to immediately figure out that the main players try to be different but in fact, things don't really change. These new concepts looks very similar one another. It seems that all these new concepts are kind of transitions to what the market is demanding. By targeting Millennials, all of them have developed creativity in order to develop new and useful ideas and address some of the new expectations. Until now, none of them have managed to go beyond and to change the face of tomorrow's hotels.

Light Hotel Limited was founded in London in 2015 by Julien Veyron and Jean-Pierre Bandeira, two French entrepreneurs who first met each other during a business summit focusing on Latin America Property Development. Architect and Planner, Julien Veyron was there for atelier arcau's business development. Jean-Pierre Bandeira was there for the same reasons to develop YOO Company (founded by Philippe Starck and John Hitchcox). As sometimes things happen in hotels, they met at the outdoor bar of the Trump hotel Panama and started to discuss about real estate and architecture. Few months later, Jean-Pierre Bandeira joined atelier arcau to develop the global business of the Company.

After few years of observation and discussion, the idea of launching a new brand and concept for hotels came up in 2015. As everything started into a Design context, Light Hotels is an extremely creative Company. Light Hotel benefits from all the advantages of a start-up (no fix cost, agility, boldness) and all the humility of its leaders. Indeed, none of them is really coming from the Hotel industry. No specific background in hospitality, but a strategic vision and creative talents to design and market a new concept for hotels: Light Human Hotel.

As they have gathered around them stakeholders who believe into the concept (operators, developers, investors...), the positive effect is that the Brand is not created by Bankers but by people who want to come back to the essence of hospitality: truly welcome people.

Positioned in the market as an innovative and visionary Company, Light Hotel aims to always keep one step ahead. Its motto is "The shape of things to come". Only 6 months after the foundation of the Company, Light Hotels has just announced strategic partnerships with operators in Usa (Trust Hospitality) and Brazil (Intercity), with Designers (Moooi / Marcel Wanders) and with BOCO, the 3 stars Michelin food in a jar, NUXE (for Spa) and EVIAN (for fitness center). LHH is planning to open 8 hotels in the coming 3 years in Miami, San Antonio, Los Angeles, New York, Sao Paulo, Antibes, Rio de Janeiro and London.
The Customer experience
If the Company is at a stage of taking off, it seems that it is coming with something new and inspires people. What is making a difference? What is their key success factor? What is their Customer value proposition?

The Founders are not coming from hotel industry. They don't have preconceived ideas and they are not 'formatted' by years/decades acting in hospitality. They have great skills to reconsider both the 21st Century guests' aspirations (final client) and its own Customer's expectations (investors, developers and operators). They are working on a collaborative manner through Design thinking process with Millennials, with operators. Here are the investigative question they wondered:

+ How to anticipate future hotel desires and expectations of the 'Millennials' and translate them into a coherent whole new Architecture, Design and Service Innovation concept?

+ How to rethink the customer value proposition to create flexible concept hotels fitting for customers travelling alone for business, with friends or with families?

+ How to design and market a multigenerational hotel, shaped for all generations: Millennials, Gen X and the 'Hypest' Boomers also? And how to forge a strong collective culture (community) to acquire new customers and retain them, providing sustainable growth?

+ How to integrate a social responsible strategy and a 'green' design and culture positively affecting Millennials' behaviour and save money all at once? How to align strategic alliances, hotel management processes, and HR strategy to target the right Customers and maximize the ROI for Investors, Developers and Hotel Management companies?

+ How to combine the final Customer's dreams and aspirations with the ones of Investors, Developers and Operators'.

Light Human Hotel is the first multigenerational hotel thought as an authentic 'place to live'. It is a flexible concept for hotels designed for customers travelling alone for business, with friends or with families. It is also claiming to be the first brand which is truly environmentally friendly through a sustainable architecture, an urban reinterpretation of nature, good food, etc. Aligned with this eco-responsible commitment, all hotels are selected in view of their strategic implantation close to public transport, bicycles...

Light Human hotel is a game changer of its neighbourhood, where it is delicately blended: Each Hotel is thought as a vibrant city with public spaces, bars, restaurants and private properties to sleep. Everyone can enjoy good and tasty food, drinks... It is opened to the city and regularly animated by special musical, culinary, artistic events. A strong global brand strengthened by a vanguard Design & Architecture created by international studios atelier arcau & moooi. Everyone feels good in the panel of ambiances. A light Human hotel is a welcoming place where one of the most motivated staff, selected in the local community, makes guest experience authentic, unique and fun. Here, we could say that Light Hotel is improving the main innovations that have already been developed and tested by competitors and addressing new ones. But, the Customer experience will be really different because the business model proposed by Light Hotel is different. This is a breakthrough.

L ight Human Hotel concept: Light Human Hotel is the first concept launched by the Company. The concept is very flexible: it fits for 4 to 5 stars hotels. The Brand and its guideline use is adapted for independent hotels, for operators and for big brands as it can be used as a Brand, as a concept by THE OPERATOR Brand or as a concept for ANOTHER HOTEL Brand. Light Human Hotel concept brings a set of services, original design and 'smart management 'solutions. As stated into their website: "By adding the best in Architecture, Design, Easy Operation Model and Hotel Brand Mix, we aim to guarantee a unique and sustainable experience for guests, investors and employees". The solution is based on a flat fee that includes brand license, design and architecture, brand mix agreements and an easy operation model.

Everything is thought in a way that the guest experience will be unexpected and highly appreciated and the ROI for operators and investors will be maximized: the easy operation model allows to provide a better level of service and to operate with less staff. The package architecture and design will combine the best through moooi and atelier arcau. The Brand license will provide all the brand standards, the marketing... and the Brand mix introduces innovative branded concepts and experiences for guests and generates revenues for investors (at no cost for the operator). Thanks to its strategic partners and their own PR services, Light Human Hotel provides a significant amount in marketing & communication without any real cost.

T he business model and innovation: As Stephen Rushmore and Erin Bagley observe in the introduction of HVS report 2014 United States Hotel Franchise Fee Guide: "Brand attributes play a crucial role in an investor decision to acquire or change a franchise affiliation. (...) franchise fee represent one of the largest category of operating expenses for most hotels." In the past, Brands claimed to offer a lot in marketing and commercial impact and was invoicing significate fees to their franchisees.

The genius innovation (or sets of innovations) is the one which is fundamentally enhancing the guest experience. But not only...The genius innovation should at the same time guarantee a high level of room occupancy, making Investors happy as their ROI is better, if the Customers come back (instead of always looking for something different) and for Managers through their team (robots, people first, having fun... is good to perform) and through the Brand-Mix as managers will focus on their core-competencies and let Boco... providing a piece of the experience.

By innovating not only in the hotel itself but in the business model also, Light Hotel fill the gap between Guests expectations and needs for innovation, Investors and operators expectations. Thanks to its strategic choice of not operating hotels, Light hotel come to the market as a potential Partner, not a competitor. Light Human Hotel will not operate directly. LHH can do it because it is not a big ship but an agile Company. Even the employees feel the new Brand. You care about your employees like you care about your family. "People first always" is another motto of LHH.

Light hotel is a tailor-made solution for independent owners. Investors have to pay a flat fee including Brand license (Brand license fee and Royalty), Brand mix, Easy operation model with Maidbot..., architecture and Design. All the partnerships are already done with architects, designers, amenities... and Light Human Hotel concept is flexible as it is adapted to each category, from 3 to 5 stars.

Light Human Hotel is offering everything that a big brand can offer, and even more (atelier arcau, moooi, boco, NUXE Spa...) but is more affordable. The targets are independent owner who needs to invest regularly in their business. They have a new and refreshing Brand at a reasonable flat fee and remain with its own Company name.

Conclusion: We have mapped out what we know about Millennial travellers and we have highlighted the gap between their expectations and what the market is offering today. Observing the innovators, the new Brands and concepts launched in the past 20 years, it appeared that if most of them have innovated to improve Customer experience, none still had done the breakthrough expected by Millennials coming up to the market like a tsunami.

Founded by people who do not come from the hotel industry, but people with Architecture and Design thinking, Light Hotel could change the face of hotels thanks to strategic alliances and a win-win system with every stakeholder. The idea is simple: Light Hotels is good at creating and marketing new concepts for operators and will always remained focused on innovation. Operators are good at operating hotels. Strategic Partners such as Boco, Fitness Evian and NUXE Spa are good at caring about healthy food, fitness center, bath amenities...

A flat fee includes a full Design package, Brand license, an easy operation model and a Brand mix. This Brand mix help operators in focusing on their core competencies (welcoming guests), enhancing guests experience, generating revenues and saving money thanks to a viral marketing generated by all the Partners. Six months after the foundation of the Company, Light Human Hotel already has 8 hotels in the pipeline.
About the author: Julien Veyron is a French Architect & Designer and a visionary Entrepreneur. CEO of 'atelier arcau', a 35 years multi-awarded French architecture firm with global recognition, Julien is also President of 'Light Human Hotel', a London based Company bringing an eco-friendly, fresh and innovative new Brand and vanguard lifestyle concepts for hotels. www.atelierarcau.fr or www.lighthumanhotel.com
After decades of near status quo in hotels, things are now really happening and these are good news for the industry. Could the words "Be my guest", "Cheers" and "Have fun" be back and remain for long into this new generation of hotels!

Architect I CEO I Partner at atelier arcau & light human hotel

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