Mr. Martyna

Food & Beverage

Making the Lobby a Destination by Using Creative Retail

By Bobby Martyna, President & Chief Executive Officer, Tradavo

The hotel lobby of recent years has hardly been a place for congregating. The business traveler has tended to check in at the desk and beeline to the elevator, remaining sequestered in the room until lights out, only perhaps going to a dinner meeting before returning again to the room. The leisure traveler might check in, but immediately head out on the town to start the occasion. And in urban locations, few locals would ever think to drop into the lobby to work or socialize, lest they be ill-considered by a uniformed bellman. This has tended to make the lobby a pass-through rather than a destination.

But that all changed when brands and owners more fully embraced the social aspect of hospitality and lodging, prompted by social media sites, the millennial mindset, the experience economy and perhaps influenced to some degree by the success of Airbnb. The draw of the privacy of the room has been supplanted for many by the excitement of social interaction. Watching scheduled shows and movies on the big screen in-room television has been very ably replaced by streaming on the device at hand and genuine human interaction. And since room service and mini bars now are few and far between, not to mention being notably unprofitable for operators, guests are being encouraged to hit the lobby.

To the lobby, All!

The "New" Lobby

The "new" lobby concept is not completely new - like many new concepts, there have been innovators and creative types who have been ahead of their times. Select urban luxury hotels have encouraged the lobby stay with beautiful artwork and vibrant sounds such as the Morgan's Hotel in New York. In chain luxury, the W hotel brand by Starwood is another striking example of lobby innovation. And the Ace Hotel in New York and Los Angeles has featured communal lobby spaces since the early part of the decade by catering to the in crowd.

By and large, and particularly in select service hotels and upper mid scale to upper upscale full service hotels, there hasn't been a genuine focus on encouraging the lobby stay, with the only real draws being free coffee, WiFi and the quintessential hangout, the lobby bar. Not very engaging, to say the least. And very rarely did the lobby convey anything about the locale other than a few framed prints on the walls and in the restrooms. Even lobby restaurants tended to be disconnected and somewhat dreary.

But that is changing rapidly and on a broad scale. While the heads in beds mantra is still very much the rallying cry of hoteliers, finding ways to entertain guests and provide them with an engaging experience on property, in the lobby, has taken on a real focus. Ten years ago, the Courtyard Bistro concept went part of the way toward creating a lobby destination, but was more focused on small groups and pods than on communal engagement. Some of the newer brands such as the AC and Moxy by Marriott, the 2nd generation Cambria Hotel by Choice, the Indigo by IHC and the Andaz by Hyatt, among others seem to have the lobby concept at the heart of the guest experience. And soft brands have the potential to go even further with the concept, being unbound by prototype.

Adventure in travel, both business and leisure, now encompasses the lobby stay. It seems clear now that the transformational experience of a great lobby builds brands and loyalty has replaced the terrycloth robe and the pillow chocolate. Even vaunted loyalty programs seem to have less appeal to the millennial crowd than an engaging experience. As a consequence the lobby experience is becoming a more significant component of RevPAR.

Food and Beverage in the Lobby

For many decades, food and beverage in hotel lobbies was non-existent or limited to restaurants - which were generally enclosed and not a true part of the lobby experience. In recent years the breakfast program has become the food experience for the morning - but often is hosted in a kitchen area, is outside the lobby proper and the food choices tend to be repetitive and mundane. Many hotel owners offer little or nothing during the day -- low turnover and high food preparation labor costs have made prepared meals an unaffordable luxury. The enclosed gift shops, usually run by third parties, represent good outlets for apparel, souvenir and beverage purchases, but not much in the way of food selection - and in the concession model, the guest experience is typically outside the purvey of the owner/operator.

Lobby based Markets and Pantries have moved the action into the lobby a half step or so and have become brand standards in economy through upper upscale chain classes, more in select service, but increasingly in full service as well since they are operated by the front desk staff and open 24/7. But generally, these markets and pantries have been positioned as 'impulse' snack purchases with a 'grab 'n go' theme, a vending machine replacement rather than anything truly compelling. And food service choices are limited and non-existent.

Given that Markets and Pantries are self-service, open 24/7 and well positioned in the lobby, they represent the most robust platform for delivering a unique and compelling guest experience for the lobby stay, not to mention a considerable source of revenues and profits for the owner/operator. For the guest (or walk-in), the Market and Pantry provide additional reasons to hang out, work and socialize. Yes, today that may be over a nationally branded bag of chips and a soda. But complementing those choices with fresh, healthy, local and authentic items based on the destination, well curated and beautifully merchandised can amplify the guest experience and help create that memorable occasion that drives return stays.

It's important to understand both the guest profile and the daypart in curating the lobby food experience. So while some guests and lobby visitors will want the comfortable and familiar items - and they need to be readily available, the experience economy suggests other guests will be looking for more adventurous choices. Both need to be available, well presented on the shelf and priced properly for the program to be successful. Brands can go a long way in developing standards for retail food choices, but there are at least two problems with relying on the brand standards. One is that not every hotel of the same brand is the same.

We find that ADR is the most important indicator of what choices should be available. Generally speaking, within the same hotel brand, a room rate of $89 will bring in leisure/family guests or business travelers on a very tight budget, while a room rate of $350 says the guest is looking for an out of the ordinary experience and is price insensitive for the right items. The next problem is that the brands don't usually specify regional or local choices - which would be near impossible to identify and specify from corporate HQ - and typically the local staff and hotel retail specialists have a much better feel for what will work best for specific locations.

And finally, the brands are mostly silent on merchandising even where the retail space is close to the prototype and certainly where the retail space is anything but the prototype. The design of the retail space and the food selection and presentation need to be complimentary and coordinated. Pricing is another area best left to specialists. There are companies that have worked on design and merchandise planning for thousands of hotels across many brands that can take the best of the brand standards and layer them into a beautiful solution for guests and a highly profitable solution for owner/operators.

While lobby Markets and Pantries provide the 24/7 experience at low operational costs, they can be complimented by more traditional food service options during other parts of the day. For example, during the breakfast hours, guests may prefer locally sourced baked goods with a provincial flair - pecan croissants in Atlanta or cranberry scones in Boston. During lunch hours, the restaurants maybe closed and so pre-prepared salads and sandwiches can be presented - either prepared by hotel staff beforehand or purchased from local commissaries. During after dinner hours, the selections may include more snack items, for example, local chocolates, brownies and plenty of interesting local beverages - craft beers and sodas.

Seasonality and variety is another element - especially when considering the local (non-guest) visitors. Selection freshness makes a big difference - many of today's consumers want variety and adventure. Surprising them once makes for a remarkable experience. Surprising them a second and third time will guarantee referrals and repeat visits. Can all these food and beverage lobby programs be presented successfully without creating an operational nightmare? Yes, if done intelligently and designed with an operational focus, meaning a focus on sourcing, design and merchandising for operational sustainability.

Execution Challenges

While designing and executing hotel lobby retail programs may seem daunting, there are companies that specialize in everything from the design to the implementation - with a goal of making the guest journey exciting and memorable, rather than mundane and uninspiring. Leading brands and owner/operators are choosing to work with hotel retail specialists and are enjoying the benefits of a vibrant lobby with a focal point on food and beverage.

Bobby Martyna is co-founder and president/CEO of Tradavo. Mr. Martyna began his career at Goddard Spaceflight Center, writing satellite operations software for NASA. He then moved west where he designed and developed communications technology solutions for global markets. In 1996, Mr. Martyna launched his first entrepreneurial venture, spinning out neglected software assets of a public company into a private venture, Vertel. It went public in 1998. Over two decades, he has founded and run both venture-backed and boot- strapped companies in the e-commerce industry. After identifying retail as a target market lacking in innovative technology solutions, Mr. Martyna founded Tradavo in Denver, CO in 2006. Mr. Martyna can be contacted at 510-432-4577 or bmartyna@tradavo Please visit http://www.tradavo.com for more information. Extended Bio...

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Feature Focus
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