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Yotel, the five-year-old hotel brand that takes its design cues more from
first-class airline cabins than Architectural
Digest, has been testing its draw among U.S. travelers with last summer's
opening of a property near Times Square in New York. According to Yotel CEO and
co-founder Gerard Greene, that single property has generated significant demand
from corporate travelers, and Yotel aims to become a fixture across more key
U.S. markets. Greene spoke recently with Business
Travel News lodging editor Michael B. Baker about Yotel's development
plans, its draw for corporate travelers and its position among competing
Have corporations been adding Yotel to their hotel programs?
The corporate demand has been very interesting. We're near [the Jacob K. Javits Convention Center], so we're picking up groups from there. We did 80 percent occupancy. [We tell] the sales team to get [planners] in the building, get them to look around, host parties and let them stay for free. Let them experience the products, and the rest will follow. What's happened is we've signed up 20,000 room nights of corporate demand.
How do you target business travelers?
We have motorized beds, which create more floor space. We thought about the room so ergonomically that our room has more space, and it's more efficient than a 350-sq.-ft. room. There's a desk to work at, storage under the bed, two hanging spaces, a heated tower and a reading light. It's got everything you need, just in a very small space. That's using the aircraft designers, which really sort of revolutionized the room design, as opposed to using an interior designer. The interior designer will take a room and choose furniture. We approach it as the whole thing is a piece of furniture, and no one has really done that before. Every little detail that you think a corporate traveler would need, we try to address.
Where do you see Yotel positioned among other brands?
The [Holiday Inn] Expresses and the Hamptons were a big inspiration for me because they have a very high profit margin and are simple to operate, and consumers like them because they know what they're getting. And I love design hotels because they're fun and sexy and interesting, but they're expensive. We're trying to marry those two things and come up with a design concept that's affordable at the same time. Because we've been able to get more rooms on the land by doing small rooms, we can spend more. The Wi-Fi is super-strong, free and works in every corner of the building. [Some hotels] charge $12 to hotel guests, and that's disgusting. The windows and heating and cooling system are extremely quiet, and the heat-pump system is what people put in a four- or five-star hotel. The brand is supposed to be something that appeals to everybody. We like to think of ourselves as the iPod of the hotel industry, in that the product could be made a lot cheaper, but it's not. It has its aesthetic, and it appeals to a mass market, so you have investment bankers, kids and my mum and nieces all using it. It crosses socioeconomic boundaries. JetBlue has done the same thing, and that's where we want to be. We don't want to be this cool, hip design hotel where people are more worried about the lighting and the music. People want a great bed, great shower, a workspace and free Wi-Fi. We do free coffee on every floor, vats of coffee, so if the Europeans want a cup early because they're jetlagged, they don't have to do $14 coffee from room service. That's how you do 170 square feet and make it feel luxurious.
How many locations do you have now?
We have three airports, European airports: Heathrow, Gatwick and Amsterdam. They're much smaller, between 30 and 50 bedrooms. This is 669 rooms, so we're trying to do something in between. We're going to do more airports, anywhere between 100 and 400 rooms.
Where will those be?
We've bid on JFK, next to the JetBlue terminal, and we're waiting for an answer on that. We're looking at San Francisco and Miami, and another bigger one at Heathrow. We're looking at city centers in the top 15 markets in the U.S. We just hired a development director from Kimpton, which is very exciting for us to have someone on the ground.
How is your sales team structured?
We have a director of sales and marketing and three salespeople: group, entertainment and corporate. We're still toying with the structure. We're going to be bringing in a commercial director who will sit on top of sales and revenue and marketing, so there's a cohesive strategy. We'll have a mobile site, and it will be interesting to see what pickup we get from that. We just hired an online marketing manager, so we haven't really done anything there yet. We're looking at strategies. In the end, we've got to fight against the big guys, but we have an advantage on that. Our cost per room is low, so we don't need to panic in getting $400 average daily rates. We operate at very high margins, and as for payroll, we have 150 employees for a 669-bedroom hotel, which is pretty efficient.
Are green standards one way you're appealing to corporate travel buyers?
We have occupancy sensors in all the room, so it sets back the temperature and the lights switch off. We are going to be, fingers crossed, gold LEED certified, and we'll be the only hotel in New York with that certification, which is pretty good for a young brand. That sets some very good principles for us going forward from the corporate perspective.
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