Investing at record levels, owners of hotels across the United States are doing everything from rewiring their rooms and buying smart TVs, to replacing bathtubs with more easily maintained walk-in showers.
These represent some of the latest capital expenditures by hotel owners identified in a new survey by Bjorn Hanson, a professor at the Tisch Center for Hospitality and Tourism at New York University, who estimates that this spending will climb to $6.4 billion this year, up 7% from last year.
"The heavy investments represent not only an effort by hotel owners to stay current, particularly after the 2008 recession,’’ Hanson said, “but also an escalation of standards set by hotel management companies like Hilton, Marriott, Starwood, Hyatt and InterContinental Hotels."
"Consumer tastes are changing faster than ever," he said, particularly among younger travellers, who have replaced baby boomers as the demographic hotel owners and management companies most covet.
"Almost no brand requirement — ranging from guest room desk, lighting and bathroom configuration, to restaurant menus — has been untouched," Hanson said.
Jan D. Freitag, senior vice president for lodging insights at STR, a research firm, suggested that the change in customer preferences was "coming at the same time hotel owners now have money."
"These boom times lead to higher profitability, which puts more money into owners’ hands and with that the ability to spend money on capital expenditures," he said.
Nowhere are these investments, and changing preferences, more evident than in the lobbies.
For a while now, hotel brands of all sorts — including Hilton’s Hampton and Hilton Garden Inn, as well as Marriott’s Courtyard — have been converting their lobbies into more social spaces, where guests and local people can work, meet, hang out, eat and drink. Grab-and-go food outlets in the lobby — available at Courtyard and Hilton’s DoubleTree and Hilton hotels, among others — are now standard.
"Lobbies that offer guests these options benefit guests and hotel owners alike, since this gives the guest what he needs and the hotel a chance to make money," said David Loeb, lodging analyst for Robert W. Baird & Co.
Lobby furniture, like communal tables and lounge chairs, is being outfitted with outlets, so visitors can easily charge their electronic devices. In addition, many more USB ports and integrated outlets — to charge electronic devices and connect devices to the guest room TV — are being installed in guest rooms.
"A few years ago people just travelled with their laptops," said Jim Holthouser, executive vice president for global brands at Hilton Worldwide. "Today our customers are travelling with an average of three devices, such as a laptop, iPhone and iPad, or two iPhones, one for private use and one for work. This has caused hotels to greatly improve their high-speed Internet infrastructure."
Industry experts say reliable high-speed Internet access is, in fact, the No. 1 guest need today.
To serve that need, according to Hanson, hotel owners are investing in technology improvements not only in lobbies and guest rooms, but also in meeting rooms and restaurants.
Similarly, capital expenditures are going toward smart TVs in guest rooms. For example, Marriott Hotels, the flagship brand of Marriott International — which last June became the first hotel brand to give guests direct access to their Netflix accounts — will offer Netflix at almost all of its 300 hotels in the United States by the end of 2016.
And guest rooms at Vib, a new Best Western International brand aimed at what the company calls the “connected traveler,” will offer guests smart televisions that provide electronic concierge technology and customised viewing options.
Hotel fitness facilities are also being upgraded, even at midlevel brands, whose fitness centers in the past were often a basement room with one treadmill.
Hampton by Hilton’s JumpStart fitness centres feature treadmills, elliptical fitness training and recumbent cycles, and core and balance training equipment. Marriott’s Fairfield Inn and Suites brand recently teamed up with Life Time, a health and lifestyle company, to provide guests with expert-led training videos and nutrition tips.
As for bathrooms, one of the more significant changes is the elimination of the bathtub in favor of a walk-in shower. Most bathrooms in new hotels are being built without bathtubs, while tubs are being eliminated in many existing hotel bathrooms when they undergo regular refurbishment.
The shift has taken hold, experts say, because business travellers generally prefer walk-in showers, but it is also easier and cheaper to clean and maintain walk-in showers than tubs.
Hotel owners are also investing in systems that let a guest enter a room with a smartphone, making a key unnecessary.
Hilton Worldwide is now deploying this digital key capability, which will be available at 250 Hilton, Waldorf Astoria, Conrad and Canopy hotels in the United States by early next year.
"In the end, the changes are about increasing guest satisfaction and loyalty, especially as brands proliferate and competition increases," said Henry Harteveldt, analyst for Atmosphere Research. "This is not charity."