Meeting the Needs of a Diverse, Yet Booming Industry
From baby boomers seeking to check items off their bucket lists to millennials searching for that perfect, Instagrammable sunset, individuals today are spending more of their disposable income on activities and travel, and less on physical commodities. And with this increased emphasis on experiences and travel comes a yearning for more authentic and local accommodations. Hoteliers are taking note and adapting to meet the changing desires of the modern traveler.
In the last 10 years, travel in the U.S. has increased dramatically, and the expectation for future growth is bright. With this, the hotel and hospitality industry has been and is expected to continue enjoying its slice of that profit pie.
Direct spending on leisure and business travel by Americans in the U.S. totaled $836.6 billion in 2016, $573.5 billion of which was in leisure travel. That’s an average of $2.3 billion spent on travel per day nationwide, supporting an estimated 7.4 million jobs.
And those numbers, large as they are, are rising. According to one study, nearly four out of five domestic trips are taken for leisure purposes. For four years in a row, from 2011-2015, the U.S. leisure travel market grew by 5%. This year, the numbers are on track for even bigger gains, projected to edge close to 6% growth by the end of 2017.
So why the growth? Short answer: jobs and changing consumer spending patterns.
Across the nation, labor markets have grown stronger. Last year saw an average of 181,000 jobs added per month, and in the first quarter of 2017, the economy was relatively close to full employment. Businesses are hiring, making disposable income more readily available. And with the influx of jobs and cash has come a steady growth in consumer confidence and spending.
Created by Vision Hospitality Group and opening in 2018, the Edwin Hotel is named in honor of Edwin Thacher, chief engineer of Chattanooga’s iconic Walnut Street Bridge, which in 1890 was the first bridge to connect Chattanooga’s downtown to the NorthShore. Located directly beside the Walnut Street Bridge in the heart of the Bluff View Arts District, this 90-room, luxury boutique hotel promises an upscale, distinctively Chattanooga experience, rooted in the city’s history and celebrating the city’s character.
“Our aim is for the Edwin to be a hotel that tells a uniquely Chattanooga story,” says Drew Hibbard, Vice President of Finance and Investments for Vision.
Though the high class digs and luxury décor may appeal primarily to boomers, the Edwin will boast amenities like a rooftop bar and a restaurant that will appeal to Chattanoogans and out-of-towners of any generation.
“One thing to keep in mind is that with the Edwin, or any boutique hotel, the food and beverage revenue has to come close to the revenue you’re going to make on rooms… So whether you have a bar, a restaurant, or a café, you need to be pulling in locals.”
When it opens, the Edwin is set to serve locally sourced Southern-cue cuisine, Tennessee whiskey, and local beers.
Yet, while people are spending more money on travel, demographics are changing and consumers’ desires are shifting, forcing hoteliers to adapt.
In years past, most travelers wanted uniformity in hotel brands. When someone went to a Holiday Inn in Ohio, they expected it to be exactly the same as the Holiday Inn in New York, and so they were. But now, hotel guests from millennials to baby boomers are increasingly looking for more distinctive experiences that fit their particular tastes.
Baby boomers, those born between 1946 and 1964, are a key market for the hospitality industry. With a lifetime of hard work behind them, many boomers
have retired, and with money and time on their hands, they are ready to travel. In fact, leisure travel spending among the boomer generation is expected to surge 47% over the next 20 years.
Boomers tend to be focused on family time, interested in “active relaxation” like golfing, hiking, or wine tours, and they’re willing to spend on luxury and convenience. Though open to the latest technologies, boomers value the human touch more than millennials do. They’re more likely to call a hotel than send an email or Facebook message, and they’re going to want a real person to answer.
Millennials, on the other hand, are typically looking for lower cost options that still offer impressive amenities. This emerging market, making up an increasingly large share of hotel guests, is willing to sacrifice that bigger, nicer room so they can spend more on exploring their surroundings.
“Customer needs are shifting. They don’t just want a room with a bed and a shower. They want to be inspired.”
A new addition to the Vision Hospitality Group portfolio, Tru is a new, affordable Hilton brand created to re-enter the “mid-scale” tier of hotels, and Hilton’s attempt to reach a millennial target market with an energetic, modern offering.
“It’s happy and fun,” says Hibbard. “I think that shows in the lobby design, the palette, and everything else that goes along with Tru.”
The rooms are smaller than your average hotel room, but they are nothing if not efficient (each still has a 55” TV), the thought being that millennial guests are more likely to hunker down in the hotel lobby’s business center work cubbies.
“They’re quiet, but still integrated with everything going on in the lobby, so you can see what’s going on,” says Hibbard. “It’s part of that new co-working, shared economy mindset.”
That lobby, called “The Hive,” is separated into four-zones where guests can not only work but also play, lounge, or eat. The hotel also offers free Wi-Fi, digital check-in, and a build-your-own breakfast.
Though marketed as a hotel for the “modern traveler with the millennial mindset,” Hibbard insists that the Tru is not just a hotel for millennials, but rather for anyone of any generation looking for a unique, tech-savvy stay at a great price.
The Westin is slated to open up in late September 2017 in downtown Chattanooga’s iconic “Gold Building,” visible from I-24 when passing downtown.
“The Westin is going to provide Chattanooga with a high echelon experience, from the guestroom to meeting places to all the finishes,” says DeFoor Brothers Development Director of Hospitality Assets Jay Raynor.
With 15,000 square feet of indoor space, and nearly that much outdoor meeting space to match, the Westin will have the ability to play host to a wide range of indoor and outdoor events.
While the Westin’s meeting space, premium offerings, and emphasis on service will likely be attractive primarily to corporate travelers and many in the boomer market, they are also investing in amenities that will appeal to a broader customer base. Among others, guests can enjoy an in-home experience of streaming video and audio content from their Netflix or Pandora accounts, free Wi-Fi, multiple fresh dining options, in-room massage treatments, and a 10th floor sky bar called Alchemy with both indoor and outdoor seating facing Lookout Mountain.
Additionally, the hotel will offer customized running maps to help guests explore the downtown area, lend running shoes and athletic apparel, and greet you at the door after your run with bottled water and fresh towels.
Chattanooga’s Southside has seen remarkable growth in the past few years, particularly in the entertainment and food and beverage scene. Now, a new hotel is being built in the bustling neighborhood, projected to open in the Summer of 2018.
“The MOXY is not a typical hotel,” says 3H Group Hotels CEO Hiren Desai. “The public spaces are like a living room with a bartender. The rooms are a little bit smaller, almost a treehouse feel–cozy with the amenities a traveler needs, good lighting, and a big TV.”
In the same vein, MOXY’s in-room sofas have been supplanted with bean bag chairs, the staff greets you with an alcoholic welcome drink along with your key at check in, their social media presence is noticeably robust, and, a solar roof installation is planned to make the whole operation more environmentally friendly.
Yet, while Marriott created the MOXY with millennials in mind, Desai argues that it is really a hotel for the modern traveler, someone who, whatever their generation, is attracted to a stay with local flair, local beer, and a latte in the morning.
The way Chattanooga Choo Choo Hotel President Adam Kinsey looks at it, the Choo Choo is experiencing its third life. First it was Terminal Station from 1909 to 1970. Then, from its opening as the Choo Choo Hotel in 1973 until recently, it was “only” a hotel. Its third life, having begun only a few years ago, involves a re-invention of the entire property as it is developed into a multi-functional community asset, integrally connected to the Southside.
“Where we were strictly a hotel over the past 40 years, now we’re looking to be a great place to live, work, play, sleep, and visit,” Kinsey explains.
As the Southside has grown, the Chattanooga Choo Choo has evolved to match the market. Alongside the re-development of 14th Street as Station Street, pitched as a “Chattanooga entertainment destination,” the Choo Choo opened up a music venue called the Revelry Room, and recruited Comedy Catch, Songbirds, Stir, and Frothy Monkey.
“We try to help create micro-moments on property so people can easily take photos and post them on Instagram and Snapchat,” he adds. Cornhole, bocce ball, and formal gardens provide experience-oriented outdoor entertainment ripe for social media shares, and the Choo Choo hired local Chattanooga muralist Seven to create a number of murals for the same purpose.
“I look at our social media channels and it’s amazing how many people of all ages take photos with those murals,” says Kinsey.
They are digital natives, and therefore require high-tech amenities, streamlined design, and relevant information on social media.
“If you look at Courtyard Marriott, for example, what they’re designing today is vastly different from what they were designing five years ago,” says Jon Weitz, CEO of the Avocet Hospitality Group. “Now, they have common areas. They have green areas out back with fire pits. Those didn’t exist five years ago. You see a lot more attention now on lobbies and lobby bars, because millennials want a place to put their bag down, but they’re not going to sit in their room on the computer. They want to sit in public areas with a cup of coffee or a craft beer and be social.”
Though they have their unique preferences, what both the boomer and the millennial market segments share is a keen desire for authenticity and uniquely local hotels.
“People are spending a lot more money on experiences, and they want something that’s authentic and true,” says Hibbard. “As that continues to gain steam, the industry is going to react. And what you’ve seen in the last few years is brand after brand after brand being launched. This is a sea change in the industry that’s much greater than Chattanooga.”
According to the United States Census Bureau, millennials now represent more than one quarter of the nation’s population. Their size largely exceeds that of baby boomers.
Before its turn as a hotel, this 10th Street brick and limestone building served as Fort James, a stone fort built to protect Chattanoogans during the Civil War. The building became a hotel in 1909, changing names, owners, and styles as Chattanooga evolved in the century since. Most recently, it was remodeled and re-opened in May 2016 as The Dwell Hotel.
Owner Seija Ojanpera was first inspired by photos of 1950s Chattanooga, full of life and color, art deco, boomerang signs, neon, and cool cars. From that inspiration was born Dwell’s distinctive mid-century modern interpretation and design.
Chattanooga’s first luxury boutique hotel, Dwell is an eclectic mix of luxury and retro, Old Hollywood and Old Chattanooga. Its cocktail bar, Matilda Midnight, is defined by its creative use of color, metallics, and lighting, and transports visitors to an earlier era. Terra Máe, the in-house restaurant, focuses on fresh, exotic flavors, offering adventurous travelers the opportunity to try brand new dishes dreamed up by the chef weekly.
“We’ve got something for every palate,” Ojanpera says. “The comfort and the sophistication for the boomers, but also the super hip Instagram moments for the millennials.”
Recognizing the opportunity to appeal to boomers and millennials alike, the Lookout Mountain Resort is being developed to provide a beautiful, unique, and authentic experience. Resting along the pristine eastern brow of Lookout Mountain, Georgia and overlooking historic McLemore Cove, the 178-room luxury hotel and championship golf course is planned to be a luxury resort and conference center that will attract visitors from the Southeast, as well as national and international markets. Restaurants and an infinity pool and spa will further the resort and hotel’s upscale experience. Lookout Mountain Resort will be designed to take full advantage of the location’s dramatic views without taking away from the site’s unique, natural setting.
“We understand that Boomers, Gen X-ers, and Millennials have a common desire for the authentic and timeless experiences,” says Duane Horton, President of Scenic Land Company and the Developer of Lookout Mountain Resort. “This audience looks for real materials and experiences. Nothing synthetic. Boulders and trees are left in place. But most of all, this audience craves a location that flows with and respects the natural contours of the landscape. Lookout Mountain Resort will take guests right up to the very edge of the eastern edge of the mountain. And few things are more authentic than a spectacular sunrise above McLemore Cove enjoyed from atop Lookout Mountain with the morning mist flowing like a river in the valley below.”
Hart|Howerton will be the resort’s master planner and is known for its groundbreaking design of Walt Disney World in Orlando. Valor Hospitality Partners, an Atlanta-based global hospitality management company, will oversee operations. Nationally-recognized golf course architects Rees Jones and Bill Bergin will lead the renovation and re-design of the Lookout Mountain Resort golf course. While already established as a championship venue, the course will be enhanced to take full advantage of its unique, natural mountaintop setting.
Started in 2011 to be a basecamp for outdoor adventure travelers making the pilgrimage to Chattanooga for its rock pitches, trails, and rivers, The Crash Pad also caters to the segment of the market, including many millennials, looking for an affordable stay in the heart of Chattanooga and a European hostel-style environment where community is built into their lodging’s DNA.
“We don’t have any TVs so we almost force you to talk to your fellow travelers, and that’s the important part,” says Crash Pad co-founder Max Poppel.
From the communal kitchen and hangout areas to its local coffee, bread, and spice offerings and the hostel’s high standards for energy efficiency and construction, The Crash Pad is delving into the modern traveler mindset.
“We get everyone from climbers to motorcyclists to women who want to come down here and have a ladies night,” says Poppel. “It starts with the affordability, but that sense of community is why people return. We’re small, so everybody at the front desk can know everybody’s name.”
“The amount of energy and enthusiasm going on in Chattanooga made us realize that the city was ready,” says Jon Weitz, CEO of the Avocet Hospitality Group, which acquired The Read House last September. “The economics finally matched up with the opportunity to renovate and re-establish The Read House to its proper place in history.”
Weitz plans to start the renovation later this year. It will be done in phases, starting with the original building. “We are phasing the renovation in order to maintain The Read House’s status as the South’s oldest, continuously operated hotel,” said Weitz. After all, the hotel has never completely closed its doors since it first opened in 1872. The historic building should be completely restored by Fall of 2018.
While it opened in 1872, The Read House’s current structure was built in 1926. It’s a building that has seen over a century of change in Chattanooga, and many still have memories of the grand old building.
“It’s like anyone who is from Chattanooga has a story,” says Weitz. “Whether it’s – ‘The Read House is where my grandparents got married,’ or ‘my prom was at The Read House.’”
Avocet specializes in restoring “uniquely situated properties”–repositioning and bringing back a hotel’s past, yet tailoring it for modern times. Weitz hopes to restore The Read House to its former grandeur, celebrating old architectural details, and ultimately re-create a roaring ‘20s, Great Gatsby-esque hotel whose authenticity will appeal to millennials and boomers alike.
“We’ve found that there is a demographic that’s very interested in having a unique experience in a historic hotel,” says Weitz. “Customer needs are shifting. They don’t just want a room with a bed and a shower. They want to be inspired.”
Here in Chattanooga, hotels are adapting to accommodate the changing tastes and demands of their guests, and new offerings are coming to the area, reaching out to their target markets with intentionally out-of-the-box appeal.
As the modern traveler continues to evolve, hotels will continue to adapt their offerings. And as Chattanooga continues to grow, thrive, and attract business and tourism, more and more of this new breed of hotels will crop up. The good news for those of us who love Chattanooga: authentically local is in.
