When building new properties, hoteliers will determine their target market, position their brand, and create an amenity list for their guests which may include a fitness center, pool area, retail shopping outlets, and so forth. Though it is a standard practice for most hotels to offer a fitness center and pools, many hotels put little thoughts on retail stores and gift shops, ultimately resulting in a poor product offering or an outlet that doesn’t match the hotel’s image.
Superior retail outlets are often a main differentiator between luxury, full service, and economy properties. Luxury properties tend to have multiple retail outlets with a variety of product offerings, while full service properties tend to have a decent size gift shop with local souvenirs, and economy properties typically offering solely a small grab-n-go food center.
Looking into retail as an additional revenue center is a great option for properties of any caliber. The question is, how far is your property willing to go to offer those amenities to the guests? Take the St. Regis New York, for example. The St. Regis is known as a luxury brand that strives to take any element of work away from the guests. The St. Regis New York once featured a custom book-binding store called Thornwillow, where a personal librarian was available to suggest the perfect piece of literature. The Anaheim Marriott, on the other hand, chooses to offer generic souvenirs and clothing to its guests, with every other hotel and gift store in the area offering the exact same products. Even more, the Holiday Inn Express in Downtown Indianapolis only offers a small snack shop with virtually no clothing or souvenir choices. Though all of these hotels offer something entirely different to their guests, they provide a product mix that fits to their market and the brand. A Holiday Inn guest is not going to purchase a $2500 custom bound Dr. Seuss book from the Thornwillow boutique in the St. Regis, just as a St. Regis guest is going to look for something more unique and bespoke than the generic souvenirs that the gift shop in Anaheim Marriott has to offer. In this sense, most hotels are choosing their retail outlets wisely.
Still, the question becomes is it worth investing so much money, time, and attention in hotel retail options. LeeAnn Sauter, the CEO of Seaside Luxe, a company which aims to create unique retail spaces for resort properties, would say that hoteliers should focus more efforts on creating a unique, on-property shopping experience for guests as part of the amenity offerings the hotel has to offer. She claims that “80% of the reason why concierge send guests away from their hotels is for a shopping experience.”
I would disagree. I would bet that most concierge would say that the top reason they send guests away from their properties is either for a unique food experience or a unique excursion experience. Though I could see how a small retail offering would be beneficial to a property, I can speak from experience that the unique, luxury offerings at many hotels are not very successful. Take the Thornwillow store in the St. Regis, for example. How many people are choosing to stay at the St. Regis over the Fairmont because they offer a professional book binding store? I guarantee you the answer is zero. With such specialized retail options such as this, sales are going to be few. Clearly guests agreed as well as the store was very unsuccessful and actually closed not too long after opening.
Personally, I think hotels should move away from such luxurious commodity offerings as jewelry stores, electronic stores, and other specialty stores, and use the space for something that is much more functional from the guest perspective – such as a business center, coffee shop, or local amenity shop that more and more guests are looking for these days. So many hotels choose to offer products that are non specific to the area or the property. With hotel retail offerings, the hotel must offer products that the guest either cannot get anywhere else or they would buy most frequently in the area, resulting in the guest buying the products from the hotel retail stores simply out of convenience.
I do agree with LeeAnn’s statement that, “hoteliers are typically not good retailers,” but this is because hoteliers are not in the retail industry. They are in the hotel industry. I think that hotels should continue to focus on what they’re good at, which is offering a unique experience specific to their target market, and not try to enter the markets that they know nothing about. If it is a goal of the hotel to increase retail revenue or offer a unique retail experience to guests, then hiring someone who specializes in retail and collaborating with other retail stores might work, but don’t try to experiment with product offerings until you find something that works.
What is your outlook on the hotel-retail debate? How well does your hotel’s retail outlet reflect the desired image? Do you agree that hoteliers should make retail options a top priority when building new properties?
About the Author:
Brittni Sneyd is finishing her B.S. degree in Hospitality Management at Cal Poly Pomona and will be graduating a quarter early in March of 2016. She is currently acting as the Guest Historian for The St. Regis Monarch Beach where she works as a liaison between guests and hotel departments to ensure that guest’s stays are beyond expectations. Brittni has been applying her knowledge from the classroom to the workforce since she began at Cal Poly in 2012, with hospitality giants such as Disney and Marriott listed on her resume as well. In her free time, Brittni enjoys shooting landscape photography and finding new places to explore. We are excited to see all that she will accomplish as an alumnus of the Collins College of Hospitality Management!
*Please note the views and ideas suggested in this article are not necessarily a reflection of the St. Regis Monarch Beach or Starwood company.