Skift Take
The growth of select-service brands from the major hotel companies isn't slowing down at all, and for good reason: They're easier to finance, build, and there's a clear demand for them. In short, it's a clear sign that hotels are learning to listen to what customers really want, as well as adapt to the new on-demand economy.
Is the full-service hotel on its way to becoming obsolete?
Not necessarily but when you consider the select service brands that the major chains are focusing on, there is a case to be made that full-service hotels are losing their star power.
When onefinestay CEO Greg Marsh spoke to Skift last month, one of his statements — "I think the full-service hotel is dead" — struck a definite chord.
His argument was that as on-demand services continue to grow, whether for ride-sharing or food delivery, the need for the full-service hotel, as it is currently constituted, will no longer exist.
For hotels to survive, Marsh said they have to become low-cost leaders and go "ridiculously" select by charging guests for ancillary services and amenities or they have to go in the opposite direction and do something "truly differentiated" and exclusive.
In many ways, Marsh's assessment is slowly becoming a reality, especially if you look at which brands major chains appear to be most interested in growing. This was especially evident during each of those hotel companies' respective earnings calls for the second quarter.
For Hyatt, it's Hyatt Place and Hyatt House. For Hilton, it's Tru by Hilton. For Choice Hotels, it's Cambria.
All of these brands fall under the select-service umbrella. These hotels may not have all the bells and whistles that full-service hotel has, like a spa or full-service restaurant, but they do have the basic amenities that most travelers — business and leisure — want in a hotel stay.
They're not exactly upper-upscale, but they aren't necessarily economy, either; instead, they generally fall into that upscale/midscale price range.
"I think this is one of those asset types that can please both business and leisure travelers," said Guy Langford, vice chairman of U.S. travel, hospitality, and leisure leader for Deloitte. "They're not so basic. Instead of it being limited service, they call them 'select.' They provide services to you in specific areas where you have demand. You don't need a fancy restaurant, so you can book on OpenTable nearby so they have a gym instead, for example. From my perspective, select-service hotels do a better job of satisfying both business and leisure, especially in terms of the [economic] softness we've been seeing lately."
Why
