From Luxury to Lifestyle, with Nikki Beach’s Alex Schneider

Episode Transcript

Alex Schneider: You asked me for a recommendation, I would always focus on the quality and not on the quantity. In whatever I do, try to execute your product to the best possible version of that product. Charge a fair price and you will always be successful.

Robin Trimingham: Welcome to the Innovative Hotelier podcast by Hotels Magazine with weekly thought provoking discussions with the world’s leading hotel and hospitality innovators. Welcome to the Innovative Hotelier Podcast brought to you by Hotels Magazine. I’m your host, Robin Trimingham. As we all know, the existence of many boutique brands depends on their ability to develop a unique vibe or experience and then market that concept sufficiently enough to attract and retain a loyal customer base. My guest today, Alexander Schneider, president of the hotel division at Nikki Beach Worldwide, represents a brand that not only excels at this, but they’ve literally taken it to the next level. And he’s here today to chat with us regarding ideas for transforming your boutique brand from a traditional hotel business model to becoming a multifaceted lifestyle experience. Join me now for my conversation with Alexander. For the last 50 years, Groupe GM has been a leader in the luxury cosmetic amenities industry. The group proposes a 360 solution from manufacturing to distribution, with over 40 international brands and its worldwide distribution network, Groupe GM offers different shapes and sizes of eco friendly products in hotels all over the world. Discover more on www.Groupegm.com. That’s “Group” with an E, GM dot com. Welcome, Alex. Thank you so much for joining me today.

Alex Schneider: Thank you for having me. Great pleasure being here and looking forward to the exchange.

Robin Trimingham: Well, so am I. I will openly admit, because I am from Bermuda. I wasn’t familiar with the Nikki Beach branch before I learned that we were going to have the opportunity to speak. And I was really fascinated by the whole thing, to be perfectly honest. But I suspect, like me, some of our global audience won’t be entirely familiar with Nikki Beach. So can you give us just a very brief overview regarding what distinguishes your brand as a market disruptor?

Alex Schneider: Absolutely. The markets are shifting in light speed these days and trends come and go and a frequency that we haven’t seen before. Right. And I think obviously COVID was another accelerator to this rethinking process of how people perceive hospitality, what their needs and ones are and ultimately what they’re looking for. So my answer to your question today is probably very different from my answer three years ago. Today, I would like to start with Nikki, which is still a family owned company with a global span, because we seem to be really in a race that is about to be extinct. You know, the family owned businesses with a global reach have mostly been bought up in the past. So we’re very proud. We’re still owner, run owner and founder, run by Jack and Lucy 1010. We are perhaps the original barefoot luxury lifestyle brand when it comes to everything beach club, culinary, leisure, entertainment and lately also hotels and resorts. We are covering really the globe and some of the most beautiful places that you could imagine going all the way from St Barts to Koh Samui and everything, more or less in between. I believe the brand really has its magic by its execution. We are not a party brand. We are a luxury lifestyle application that you can find on beaches, that you can find on rooftops that you can find in the desert. And I think with that we have created really a canvas for our loyal clients that don’t only visit us, but they travel for us. I think that makes it really special. When we open up new destinations, we see that people travel to us because they are such sneaky beach fans that they always want to be in touch with the latest opening. So yeah, that’s how I would summarize it.

Robin Trimingham: I think you make a great point when you talk about family ownership, particularly in a year when my understanding is at least in Europe, a lot of the really old family owned hotel businesses are being bought up by the conglomerates. So you are a luxury brand in a very volatile, uncertain time. How do you maintain luxury and be cost conscious at the same time? Because I can appreciate you can’t be everything to everyone. How should a hotelier go about identifying the right micro niche inside the luxury sphere, if you will?

Alex Schneider: In hospitality, we have one disease and that’s the thought process that you can take percentages to the bank that doesn’t work. And we all know you can’t go to a bank counter and say, Yeah, I have 60% g0p what do I get for it? Right? In the end we are an industry that is there to make money, but we are also an industry that only makes money when people are happy and price value is a part of happiness. Price value is not for me a fixed dollar sign on a certain cut of a steak, but for me, price value is when you go somewhere and you enjoy your time and you don’t care what you pay for it, because that’s the ultimate goal that you we basically take our clients, our guests, and we take them out of the here and now, and we bring them into a place where they just don’t want to leave and where they feel so welcomed and where they feel so entertained that basically the price of a meal, of a drink, of a bottle of wine or of a bottle of champagne becomes secondary, because that is the moment where you as a host, where you reach the ultimate hosting if you want, right? I mean, this is the moment.

Alex Schneider: Where you have done everything right. And obviously we saw in the last years that I don’t like the term revenge spending, but that people were very motivated to have a good time. And there are some indicators that some brands and some brand applications overdid it. They saw the opportunity that people had a spending elasticity that was much higher than before, and they just charged whatever they wanted to. We didn’t go down this route. Despite the inflation, despite the increase of labor costs and talent costs, we kept our price ranges more or less the same. And with this, you will see that, yes, you might see a little bit of a decrease on this beautiful percentage, but you will also see that usually your top line grows. So with that in mind, the real money that you take to the bank is same or higher. And you ask me for a recommendation, I would always focus on the quality and not on the quantity in whatever I do. Try to execute your product to the best possible version of that product. Charge a fair price to it and you will always be successful.

Robin Trimingham: Those are very wise words. It’s an interesting situation because I hear you when you talk about the emotional thing that you generate inside a person, that intangible thing being the one that’s of the greatest value. And when you achieve that, not only are you successful while the guests are with you, but you also create a memory that lasts that’s very similar to that. At the same time, for our listeners, you have to be kind of strategic in where you allocate the budget and where you’re more conscious of the spending. And I thought, I think a lot of listeners would really appreciate your perspective on how do you still offer amenities that are necessary to maintain the luxury perception and sort of be a little strategic at the same time?

Alex Schneider: It’s a very good question. I would basically put it probably in three different verticals, right? The vertical number one is amenities that matter that drive the experience and with that amenities, amenities that also drive your top line. Right? If I am offering a guest a check in that is highly flexible where I’m investing in the time of a pre arrival conversation with the guest to understand what they want, what they need, and if they come early then I don’t bother them with check in times. But then I arrange and organize my teams and my inventory in a way that the guest can check in right away. And you, you offer an amazing glass of champagne during the arrival and you have all of the customized little touch points for him ready. These are amenities that matters because they drive. Also what you can charge for a service like this, you can charge and if you charge, you will be also successful because it’s ultimately a higher and better execution of hospitality. Then the second part is to check the amenities that you just use because everybody else uses them. I always make the joke with my team. I said, take a restaurant or a hotel room, turn it upside down, shake it until nothing falls out, and then have a look at what lies on the floor. And then ask yourself, well, one by one by one, and ask yourself, is that still necessary? Is that still relevant to the experience? And if either of the two questions have answered with no, get rid of it right away.

Alex Schneider: And you know not humans are animals of habit and hotels are even worse than that, right? I mean, we still put little chocolates on pillows. We still fold toilet paper into triangles. And really, we don’t know anymore why we’re doing it. So I think we at Nikki Beach, we have always been very good at challenging these existing norms and really changing them wherever we felt that change was needed. So in summary, yes, really check your operation, why you’re doing things and you will find so many items that you might not need, so many steps that are no longer necessary. And very often these steps result also in active savings. Right. And then the third vertical and probably one of the more important and in the future probably most important verticals is sustainability. And you’re really doing things that are good for the planet. Are you doing things that have such a benefit to the guest that you really have to execute them, even though you know it’s it’s a waste? And I think a lot of that lies in food and beverage. I always preach if it’s winter and strawberries are not in season, the chance that you get a very good tasting strawberry that really is really there to be enjoyed by the guests is very small.

Alex Schneider: The chance that you pay a very high price is very high. The chance that this strawberry got airlifted from foreign countries is even higher. So at the same time, you will always have resources that are very close to where something is in season and with a little bit of creativity, you can not only save money, be more sustainable, but you can bring a very authentic experience of your local terroir to your guests. And again, I’m wondering so often when I’m traveling and I always like to try each type in class of hotels when I’m traveling, and then I find, let’s say, economy or entry luxury brands that still think that they need to put out these huge international brands wherever they open, let it be breakfast, lunch and dinner. And I’m always asking myself, why are we doing this? You know, I mean, there’s so much good local produce. There are so many authentic recipes that are made for all four seasons, whether you have four seasons. And I believe, again, if you take this to heart and if you omit all of these standardized offerings and you really go this zero km seasonal approach, again, you will find a better experience at a lower cost.

Robin Trimingham: I love your analogy of questioning everything, and I completely agree with you. You know, hoteliers really get themselves into a rut where it has to always be the same or even perhaps worse. It has to be what the hotel on either side of us is doing. And I think being true to yourself is obviously a great way forward. And you guys are walking the walk. Interestingly, you have managed to become a place that really attracts celebrities, which is, I think, a place that some of our other boutique hoteliers really can only dream about. But I think that’s a little bit of a double edged sword at the same time, because there have to be some inherent challenges in remaining top of mind with the IT crowd. How do you address this?

Alex Schneider: I think the answer always lies within the source, and we never plan to become a hotspot for celebrities. And it’s the truth. We always did what we thought we had to do in order to protect the legacy of the brand, in order to execute the brand at its best. And I think the one recipe that we applied that is or was a trigger for, let’s say, the more known crowd of this planet to flock to our places was that we understood from a very early stage that we are basically talking to a clientele that you can’t impress anymore. And I think hoteliers very often in some restaurants try too hard to impress. And sometimes you really need to sit back, watch and understand these clients, and then you will very easily come to the knowledge that basically these guys can have. They can have whatever they want, and hence there is hardly anything in the world that you can do to impress them. And then Nikki Beach, we are proud to provide empty canvases to people that they can basically use to fill their day with whatever they feel like doing. And I believe that’s the magic of the concept. It ranges from energies that go from very low to very high. When you go to one of our resorts, you can be the most introvert or extrovert person during the day that you want, and you will always find something to do. And I think this if you really boil it down, it’s one sentence. Luxury is choice or choice is luxury. And that, I think, helped us to be able to host all of these important personalities. But since we never basically change the nature of the concept in order to be more fit or less fit for a certain target, we just continue to do what we do. And it seems to work now for 23 years to stay cutting edge for that target. So again, sometimes less is more.

Robin Trimingham: So if I’m understanding you right, would you sort of say that the secret sauce here is to just create a space where anybody, even somebody very, very prominent, can feel comfortable, however, that is for them.

Alex Schneider: 100%. I mean, let people choose what they want to enjoy. Right? And that is by far the most powerful weapon in hospitality. I think, again, for me, the ultimate luxury is choice. And that’s how we came up also with our hotel concept, because we definitely felt and that was one thing that I never understood when I looked at some of the hotel brands. Why do you either have to be the ultimate hardcore party brand like the Ushuaia of the world, where, you know, you hear music every second that is just you can’t even take a break. You always need to party 24/7, or then on the other extreme, you enter into these spaces that are so Zen, that are so quiet, that are so withdrawn that you don’t even want to laugh, even if somebody tells you a very good joke. So we understood, I think, how to combine these two worlds in a nice scale of different experiences, and we let people choose what they want from this scale.

Robin Trimingham: Did you know that offering top cosmetic brands is a delight for your guests? For the last 50 years, Groupe GM has been a leader in the luxury amenity industry. The group proposes a 360 solution for manufacturing to distribution on cosmetic amenities and dry accessories. With over 40 international brands such as Guerlain, Nuxe, Atelier Cologne. The group offers different shapes and sizes of eco friendly products in hotels all over the world. This is possible thanks to its worldwide distribution network. Thanks to their care about the Earth programme, you can offer your guests top cosmetic products with a reduced environmental impact. Discover more on www.GroupeGM.com. That’s group with an E, GM dot com. Speaking of choice, one of the things that boutique and independent operators always struggle with is how do you build a loyalty program when you’re so small and you’re up against the mega giant brands? What do you feel about this? Is this a must have for smaller properties?

Alex Schneider: I have a very strong opinion about that and thank you for asking. I would like to start with my favorite sentence. Loyalty is not a program. Loyalty. Loyalty is something highly emotional, something that comes when you find a product that basically ticks all of your needs and ones on. Practical and emotional left. And then you will build loyalty, you know, great experiences, fun memories and, you know, things that really make you want to do it again. These are the things that great loyalty. And loyalty is an emotion. Loyalty is 100% sensual. It is not a transaction. A loyalty program is a transaction. You do something, you get rewarded. So for me, these two things have nothing in common because in reality, if you really manage to impress a client the way you want to, this client will come back whether you have a program.

Robin Trimingham: So that’s very interesting because in some of the other conversations that I’ve had with other guests, it very much comes down to a conversation from some other people’s perspective that loyalty and social media recommendations just go hand in hand.

Alex Schneider: For me, loyalty, first of all, inherits the fact that you do something again, that’s not trying something not on social media works wonders with attracting people to a product. And I think there’s no doubt about it. But if people come and they try it and they don’t like it, social media is not going to bring them back. Loyalty programs are extremely important and we are taking beach. We’re proud members of Discovery or Global Hotel Alliance because we believe it’s a fantastic tool and it’s a fantastic program that allows loyal users to go through an entire collection of different brands and experiences. And that’s why we believe it’s exactly the right place for us to be. You know, we are part of a collection of brands that strengthen each other and don’t cannibalize each other. So I think, again, it creates a platform and a distribution network that is highly functional, that is great for all of the members and that is great for its guests. But again, if I am a standalone hotel with an amazing product and I have a team that carries that product just to perfection, the last thing that you will need is a loyalty program in order to be successful. Does it enhance? Absolutely. Does it hurt? Sometimes, yes, as well. You can talk to a lot of hotel owners that own hotels of some of the bigger brands with the bigger programs and ask them how much they like the loyalty program of the brand.

Robin Trimingham: Yeah, excellent point. Because with the global brands, there are standards that are attached to the loyalty program like pre COVID. And one of the hot ones was a newspaper on the floor outside the hotel room door. And whether you had a lot of guests or a few guests, you had to have all those newspapers lined up even in the off season. And I know hoteliers who used to cringe over this on a daily basis.

Alex Schneider: And again, I mean, there are many hotel owners that are waking up now to a reality that the hotel is constantly full but full with loyal clients and the owners get reimbursed just a very small rate for all of these uses. Plus, a full hotel is a hotel that needs renovation even quicker. So if you run it 95% occupancy and you’re full with your loyalty program, clients chances that you make a real what we would call net operating profit. Not so sure. So again, coming back to your question, loyalty is emotional. It’s the duty of a brand to trigger that through the execution of the brand. The loyalty program is a transactional tool that can help us during low seasons that can assist in our distribution. But per se, they need to be dealt with very, very differently.

Robin Trimingham: I love the point that you just threw in there about 95% occupancy, taking real wear and tear on the building. And when I think about the soft furnishings, you’re absolutely right. I think I could have a whole separate podcast just on that. So from your perspective, what do you think is the biggest mistake that a lot of boutique and independent operators need to avoid right now? And why do you say that?

Alex Schneider: I believe not only in hospitality but also in interpersonal relationships in any industry in the world. It’s always a mistake if you try to please everyone. We are hoteliers, we are restaurateurs, we are people of that tribe, we are in this industry because we like happy people. So if somebody has a problem, we always want to fix it. If somebody wants something that we don’t have, we always want to get it. But at the end of the day, you know, the concept needs to have boundaries, right? A concept needs to be clear cut. We are living in a world where we have all of the information that we need about a product two clicks away. So you can’t create these facades anymore, hoping that people come in and then that they don’t find out that some of your promises were probably not so on point. So I think one of the strengths of Nikki Beach and what we are doing is we stay true to our concept. We know who likes it and we know who does it. And it’s okay that some people don’t like what we do because we are focusing on the clientele that loves what we do. We listen to them. We take their feedback extremely seriously, that we want to cater to this niche of the market that we are so confident in. And I believe that hotels very often try to cover too many target groups at the same time. And I have a favorite question always to ask back and say, Would you ever go into a restaurant, pay a lot of money, and this restaurant would be a restaurant that serves Italian, Mexican, Japanese, French and South American.

Robin Trimingham: All on the same plate.

Alex Schneider: Yeah, all on the same plate. All on the same name. Nobody would do that because the reaction would be very simple. You would say, Well, nobody can be as equally good in six or seven different cuisines out of one kitchen. So if we know that already about restaurants. Why don’t we try to protest? I still know a lot of boutique family resorts that are adult only lifestyle, eco friendly wedding places. That doesn’t work. And it’s okay not to be good at certain things as long as you’re really good at others.

Robin Trimingham: I think that you have to be true to yourself, sort of a conversation. You’ve mentioned music earlier in our conversation, and I know on your own website it says that music is part of your DNA. In my mind, this is a very tricky amenity that a lot of hoteliers just flat out avoid, because in order to have music successfully, you really got to know your customer to get it right, or the sound can be just plain old offputting. How do you recommend hoteliers go about getting to know their guests’ preferences better?

Alex Schneider: I think the whole approach needs to start with a couple of questions. Like where do you need music and where you don’t listen to music. The infamous elevator music was just introduced because elevators back then were very loud, rattling little tin boxes that went up and down the building. And music can be soothing and it takes that awkward moment away. But it was never about music. It was about canceling all that noise. Then when you play music in the lobby, ask yourself what sort of ambience do I want to create? You know, Do I want to have music that is an expression of our brand that might be uplifting, upbeat, so on and so forth? But then should that music be the same in the early morning during lunch or in the late evening? Right. Then I have one of my favorite topics, bar music. Yeah. I mean, what is bar music? I mean, bar music is usually some very strange soundscapes that we at some point decided that this is what bar music. You don’t agree? We play phenomenal nice music, which I would almost put in the world of pop music. And people love it because when you ask the guest, do you like the typical spot music? Everybody says, Well, I don’t even recognize it.

Robin Trimingham: Yeah.

Alex Schneider: So again, it is about analyzing what do you want to achieve with it? So you don’t play music for the sake of playing music. And then when you have a brand that has a certain DNA, obviously the music should be in line with that DNA. And I think if you do this, you will see that music can be an amazing driver. And obviously it’s work. You know, music for us is as important as food, as housekeeping, as engineering, because we embrace it as a part of our brand. And that’s why we have a global music ambassador. We have our own Spotify playlists. We even change the music from location to location because not everything works the same way. And then, you know, it’s an investment. But in our case, we get a beautiful return on it.

Robin Trimingham: So it’s a customized amenity that your guests really appreciate as opposed to just doing what everybody else does.

Alex Schneider: Absolutely correct. Plus, I mean, music and light are probably two of the things where a GM should have no say in. Right. Because, again, it’s okay not to understand music. It’s okay not to understand lighting. What is not okay is to put your personal taste in front of it so that everybody has to suffer.

Robin Trimingham: Interesting. Yeah. That makes a lot of sense to me. So let’s talk about a little more specific example. Your original concept is Beach Club. And yet I understand that you might have a no children on the beach policy. So what would you say to a hotelier who’s fearful of taking a step like that?

Alex Schneider: It leads us back to what we discussed earlier. I mean, if you do something, do it with confidence. Obviously, read your data, read your market, understand your market. And then once you are convinced it’s the right thing, execute it with an utmost attention to details, because everything that you take away opens up a huge opportunity to add something in an area where it matters most. So to your example, if you want to be adults only, you know, then give the adults that are there, you know, even more. That gives them this feeling of “Oh my God, this is fantastic”. This is exactly what we’ve been looking for, right? If you just say, okay, no more families, but the offer stays the way it was. Chances that you’re just losing a part of a potential target group is huge. So if you take this away, take the free space or take the free money, whatever the free time, and invest it into making the very experience that you want to foster even better.

Robin Trimingham: Obviously, that makes sense. We’ve got a couple of minutes left here. Can you provide one piece of advice that are any of our listeners can implement today to help them know their target customers a little better or to help them refine their brand?

Alex Schneider: Big topics, I think, first of all, we are living in a digital age and as I always say, unfortunately none of the technology has really made a hotel stay better. I think the digital resources that you have in order to analyze what you do right and what you do wrong have become a lot better. And I think that’s probably the biggest advantage that Internet and digital applications have provided us all ten years. Unfortunately, many people don’t see it that way because everybody is fearing bad news. So, you know, they don’t like to dig too deep. But I can just give the one recommendation if you want to understand your target group and if you want to understand what you do right and what you do wrong and dig because it’s all out there, you know, if you if you put all of your rating platforms together and you just take the time to read through the columns, you will see a pattern. And as much as I also believe that a lot of the good feedback will never make it onto these platforms, and mostly the bad feedback stays there, but it’s a huge opportunity that actually makes your life even easier because you just need to read through the bad reviews and you will know what you have to improve. So that’s one. I think contact with your clients, like real world contact is still number one. Choose ten clients a month that you think belong to the center of the target group that you want to reach. Take a little time with them, invite them to a drink and into a coffee and just ask them open-ended questions like: How do you like it? What can we do better? Is there something that you especially love or that you especially hate? I think, you know, eight people appreciated it because if you do it right, they recognize it comes from the heart.

Alex Schneider: And then when you take this feedback seriously and you don’t. Go into your defense mechanism and try to find excuses why this feedback is justified, not justified, or why you can’t fix what they mentioned. But if you really embrace it and you look for opportunities, I think again, it will make your product better. It will help you to understand whether you are dealing with the right target group or not. And then you can move on your question of refining a brand. I think that there the answer is very simple. If you create a brand on the edges, the brand needs to be like a knife. The edge needs to be always polished. And I think with many of the brands I see today. And exactly the opposite happens. Everybody wants to be a part of everything. There are no more boundaries. Leisure brands going, urban brains going leisure and so on and so forth. I mean, is it possible, is it sometimes a beautiful idea? 100%. But the edge of your brand needs to remain the same. And I think that’s very important. Have the confidence to say no to certain things. Don’t try things because other people are doing something, but really say, okay, this is what I’m doing, this is what I’m best at and this is what I think.

Robin Trimingham: You’re making an excellent point, because in the luxury and the boutique space, definitely the rules are different. And yeah, you have to be willing to stick to your guns and be what you are and be the best you possibly can be. Alex, this has been a fascinating conversation. I want to thank you so much for your time. You’ve been listening to the Innovative Hotelier Podcast brought to you by Hotels magazine. Join us again soon for up to the minute information and insights specifically for the hotel and hospitality industry. You’ve been listening to the Innovative Hotelier podcast by Hotels Magazine. Join us again soon for more conversations with hospitality industry thought leaders.