It’s hip to be cheap as hotels democratize design

Finance


If you haven’t visited a college campus, secondhand store or seen “Crazy Rich Asians,” in which one of the central characters possesses a Jamba Juice freebie card, you may not have heard: Thrift is cool. In hospitality, that spirit has worked its way from Airbnb mania to spinoff hotel brands and independent properties that promise the travel equivalent of fast fashion.

“Cheap chic is in,” said Chekitan Dev, a professor of marketing at Cornell University’s School of Hotel Administration and the author of “Hospitality Branding.” “The cheap chic hotel brand trend is in line with tiny houses and other minimalist lifestyle trends that are sweeping the country.”

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Among new hotel introductions heeding the thrifty hip movement, InterContinental Hotels Group just launched Avid, a new brand featuring well-equipped gyms, Chobani yogurt and Kind granola in the breakfast buffets, and rates from $80. The stylish London-based Hoxton hotels made their American debut this month with the Hoxton, Williamsburg in New York, with three restaurants, a rooftop lounge and bed linens from the Brooklyn label Dusen Dusen in $159 rooms. The style-focused consortium Design Hotels recently introduced a “luxe for less” collection with rooms under 200 euros, or about $233.

Bargains, of course, are relative to markets and perceptions. The hotel analytics firm STR identifies the average daily rate (known as A.D.R.) at hotels in the top 25 markets in the country over the past year as $130. That averages out places like New York, where annual A.D.R. is $240, along with Detroit at $104.

The democratizing-design trend dovetails with the rise of millennial travelers.

“At an early stage of their travel cycle, millennials have less money to spend and are extremely value conscious,” Prof. Dev said. “They will pay only for those items that give them pleasure, so boring design, bad technology and unnecessary amenities are out and thoughtful and minimal design, fast and free technology and useful amenities are in.”

But they’re not the only ones driving the trend, according to Richard Born, a principal at BD Hotels, which anticipated downsized rooms with its first Pod Hotel in New York in 2007. The five Pod Hotels in New York and Washington, D.C., draw travelers of all ages who tend to share an interest in style.

“It’s about price, but it’s not just about price,” Mr. Born said. “It’s about price, style, design and experience.”



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