Hotel 101: So You Want To Build A Hotel? (Part Two)

capella washington dc windowsLast week, we introduced you to “The Birth of a Hotel” series, where we announced plans to dissect and discuss all aspects of a hotel’s build – from developing and financing to building, marketing, opening and everything in between.

We talked all about the first four steps in the process (location, funding, hotel class and ownership / management structure) in “Hotel 101: So You Want To Build A Hotel (Part One).”

Now we’re back with Part Two, where we’ll go over the basics of marketing, development, branding and legal concerns – many of the items that can make or break the choices made in Part One’s discussion.

Step Five: So … Do You Have A Marketing Plan?
As in any business, a good marketing plan can make or break your success. Much of the data behind the plan is done at the point of due diligence, where hotel owners and management companies make decisions regarding location, brand, service level, number and quality of rooms and other on-property amenities.

“In some instances [hotels are] more complex than other businesses because [they have] a real estate component that sits separate from the operating component,” says John Hughes, director of hospitality management and associate professor of hospitality at the York College of Pennsylvania.

A year to six months from opening, the hotel makes its first major staff hires – a general manager and a director of sales and marketing. The general manager helps govern many of the major management-level hires of the hotel, and will, in many cases, serve as the face of the property.

The director of sales and marketing also will serve to help decide the hotel’s fate.
The pair work together to make many of the key marketing and branding decisions for the hotel, all while working to “pre-sell” group space and make critical plans to drive revenue in the year after opening.

Industry experts agree that relationships formed at this stage – both with vendors and area businesses – are critical. Here, experience is key.

Sandy Kunkel, partner and chief operating officer of Z/K Hospitality, which owns New York’s The Bowery House, says that drawing from past experience at this step is key.

His business partner, Alessandro Zampedri, put it this way. “You have to know who is most similar to you, what they charge and what they offer. It is also essential to market each property based on the set of limitations each property possesses. After an asset analysis you begin to determine who would be most likely to be attracted to what you are offering and then you build a targeted campaign to reach those particular consumers.”

Location is also a key driver as well as marketing through website photographs, PR and social media campaigns.

[Image courtesy of Capella Washington D.C., Georgetown's Facebook page]Step Six: Let’s Hire Some Staff

If the hotel being built is branded, like Capella, key staffers are often adopted from other properties in the portfolio. Capella Washington D.C., Georgetown’s general manager came from the brand’s Dusseldorf, Germany property, while their director of sales and marketing had extensive Washington area experience at other luxury hotels.

Nick Gregory, general manager at boutique brand Kimpton’s new Hotel Monaco in Philadelphia, says that “the secret sauce” in hiring the correct staff is using a combination of people who are “torch-bearers for culture and shiny new faces.”

The hospitality industry is a small one. Staffers often spend their whole careers working in an industry, and moving from brand to brand or property to property is not uncommon.
“It’s nice to be the shiny new toy,” Gregory says with a wry laugh.

Step Seven: How’s That Construction Coming?

Hotels, like any large building, can often suffer costly construction setbacks – weather, zoning laws and delayed materials or structural issues are just some of the many reasons that can delay a property’s opening.

Delays, of course, can be costly.

Capella Washington D.C. will push to meet their public opening, currently scheduled for the second week in January, in order to be fully operational in time for the 2013 presidential inauguration. Thus far, the hotel is on schedule.

Step Eight: Sell, Baby, Sell

From marketing phase to opening day, hotel sales staff work to pre-sell reservations for the hotel’s function spaces and room blocks. Weddings, corporate events, and business travel partnerships can make up more than half of many hotels’ business, particularly during the week.

Step Nine: Training Is Key

Training is essential. Several weeks before opening, hotels conduct a “move in,” where staffers enter the property for the first time and begin learning to properly do their jobs and work with the new team. Here again, branded properties may have an advantage – a culture and training mantra to learn from.

Hank Fried of The Impulsive Group, which owns a number of New York City hotels, says that many of his staff have been with him upwards of two decades. He lacks a formal structured on-boarding program, instead preferring one-on-one interaction with his key staffers to get on the same page regarding corporate culture.

Capella Washington D.C.’s will begin with a daylong welcome initiation, helmed by none other than Capella CEO Horst Schulze. From housekeeping to the hotel concierge, no detail will be overlooked in the quest to have everything in tip-top shape for a grand opening.

And you won’t miss a beat – we’ll bring you along, every step of the way.

“The Birth of a Hotel” is a Gadling-exclusive series that details what happens as a hotel prepares to open. Follow along with the articles and updates at “The Birth Of A Hotel” page, here. We’d also love to hear from you, our readers. If you have a topic about hotel development or trends that you’d love to see explored, email us or leave a comment below.