The best value for hotel operators means … no design
At the end of last year, the northern part of the world endured a thick blanket of snow and bitter cold. Due to these weather conditions, my colleague and I found that our return fight from London to Hamburg was cancelled, and our only options for leaving the “island” were to take the Eurostar train across the English Channel to France, or to get ourselves to the coast and then find a ferry.
Like thousands of other passengers that evening, we wound up being stuck in London when, despite the large crowds waiting in line at the King’s Cross/St. Pancras station (from which the Eurostar departs), the ticket counters closed because all the trains were fully booked.
So, I had to find a bed somewhere in London, and since we intended to leave early in the morning, finding a place to stay that was close to the railway station seemed like it would be the easiest solution. Although there were many bed and breakfasts on the winding little side streets by the station, some of them hung signs outside that read “fully booked,” and when I walked into the other hotels, I was told that no more beds were available.
Finally I found a hotel with only one room left (just as I arrived I saw three French men who had rented the other remaining three rooms), so in all fairness to my host, my room really was the last bed in his hotel!
The guestroom was down in the cellar, with the bathroom and toilet located across the public corridor. Someone just had taken a hot shower before I glanced at the tiny space, so there was condensation all over the walls and the floor — even the toilet was wet — which made me feel a little bit uncomfortable. My room had a tiny window looking onto a light shaft, but the space was still dark. The next morning I saw that the window had translucent — not transparent — glass to hide the waste bin placed in front of it.
The other items in my room were an old metal bed, a chair with plastic covering the upholstery, a folding table, a nightstand, a built-in closet and a kettle with two cups and some coffee and tea. Everything seemed as if it had been purchased from the cheapest shop in Chinatown.
My guess is that the value of the FF&E in my cozy little bedroom (if newly sourced) would be perhaps 350 pounds (US$560) (including coffee and tea).
There were no public spaces other than a 9 sqm (97 sq ft) breakfast room and a 4.5 sqm (48 sq ft) “lobby” with a reception window. I couldn’t find any “design” elements whatsoever — and certainly guest services were not available either! The cost of this night was 69 pounds (US$110), plus a 5% charge for paying by credit card. Somehow the shock of staying in this bedroom made me forget to take a picture … sorry!
Several days before this experience I stayed at the newly refurbished Savoy hotel in London, where I paid seven times as much for my room, but the vast public spaces included restaurants (with kitchens), bars, meeting spaces and a large lobby. The service was outstanding, and many people were committed to fulfilling my wishes before I had even communicated them. My guestroom was a suite, with the cost of its FF&E at least 70 times as expensive as that in my room at the bed and breakfast —and then the cost of the staff escalating to more than 1,000 times as much!
When I started calculating and comparing the difference in value of the two hotels’ public areas, I realized how relatively inexpensive my guestroom had been at The Savoy. Its cost was only seven times the price of my bed in the cellar, but its public areas have a million times higher worth than those in the bed and breakfast.
So the serious question I have derived from this experience is this: Why do investors and operators spend so much money on space, design and service, when they could earn much more by having no space, no design and no service?