The Kent St exterior of The Langham Sydney.
When Marriott completes its takeover of Starwood Hotels this year for over $US12 billion the combined group will have over 5500 properties and 1.1 million rooms globally.
For consumers the merger will not only see some of the biggest hotel brands come together in one group but a lot of replication when it comes to service and brand offerings. One of the big questions is which brands might go on the chopping block?
Many industry analysts suggest the merger is a reaction by Marriott to the phenomenal growth of Airbnb and a need to ramp up its presence in a number of markets as well as take some brands out of play. For example, in some markets the new group will be seeing brands such as Marriott, Renaissance, Sheraton, Westin, Le Meridien all playing in the same space.
As for the threat of Airbnb, it’s really just competing with lower level brands in the Starwood portfolio, luxury hotel brands such as St Regis should continue to flourish in a world craving more luxury offerings. What make more sense is to wind up or merge some of the boutique brands such as Autograph and Luxury Collection.
Chief executive officer of Langham Hospitality Group, Robert Warman told Lunch Magazine the luxury sector’s epitaph has been written before.
He says consolidation of brands will continue as the larger brands look to broaden their presence in certain markets and insulate themselves against cyclical downturns in other markets.
“The world is becoming more global and people are travelling more to secure business. Travel gives you the real ability to get together and communicate with a group of people.
As for the threat of Airbnb, Warman says they’re not really a problem.
“I’m not selling guest rooms. You don’t need to stay with me if you’re looking for a bed, an alarm clock and a TV. I’m selling an experience and that’s the difference between Airbnb and a hotel.
“We have a built in experience and we have people here, our colleagues, our employees that are trained to deliver you service that makes you feel good. There maybe people that want to go somewhere just to have a place to sleep but that’s not the business we’re in, so I don’t ever really look at it from that perspective,” he said.
Warman also believes the rise of big data is overvalued in the hotel industry. While it’s handy to know how many pillows a guest wants or what their favourite drink might be, the real point of difference for a hotel is the human experience.
“I make you feel good by understanding what you need at that given moment. And so, I don’t think technology can change that. It takes human beings to do that and I think that’s real luxury.
“A guest’s day changes. In the morning, when I am going to work, my personality is different than when I am finished work or my significant other comes to visit me and we’re going to spend the weekend together. It’s very difficult to have that written down,” Warman said.
Warman is also a fan of companies such as TripAdvisor because they’re changing the way hotels market themselves. To put it quite bluntly he feels consumer driven sites keep hotels honest.
“I think in the past companies could convince you of something that wasn’t true. The consumer doesn’t lie.”
As for the future of Langham, Warman said while Langham has hotels “in some of the greatest gateway cities in the world – we’re in Sydney, we’re in Hong Kong, Shanghai, Beijing, London, New York, LA and Chicago we don’t have a single resort.
“Our customers are now saying, ‘I want to go on vacation with you’, so one of the big growth areas for Langham over the next four or five years is going to be a move into the resort business. We’ve signed a partnership in Bali and we have also signed a second resort in Cambodia.
“Yet the key to our continued growth is our customer saying ‘I recommend you’.
“It’s maintaining a level of excellence – genuine service and captivating the senses. The companies that will succeed are the ones who understand they need to deliver on their brand promise and focus on service.”