Boutique hotel

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Top 10 States Attracting High Earners

Top 10 States Attracting High Earners

by David Klemt

The Florida Theater in Jacksonville, Florida

Using the inflow and outflow data of tax filers earning $200,000 or more, SmartAsset identifies the top ten states attracting high earners.

When it comes to the number-one state, “it’s not even close,” says SmartAsset Advisors. Not surprisingly, several top inflow cities (according to Redfin data) line up with SmartAsset’s top inflow state list.

So, why should this information matter to operators? Plainly, it’s important market information. Population, household income, and age information are crucial considerations when opening any business.

In fact, KRG Hospitality includes such data (and much, much more) when conducting research for our proprietary feasibility, business, and concept plans. Among many elements of opening a restaurant, bar, hotel, or entertainment venue, the income of one’s target audience is crucial.

Knowing where high-income households are leaving and moving to can inform many operator decisions. Where should one open their first concept? Which markets should one consider for expansion? What type of concept will work in a market? What are the threshold price points for menu items? How will this information help inform design choices?

Operators need to recoup their outlay. The income of a concept’s ideal guest should be as important to an operator as knowing their costs.

Top Ten Inflow States

Interestingly, the top state on this list did experience significant outflow in 2020. In fact, the state lost 11,756 high-earning households in 2020.

However, the state also added 32,019 such households, netting 20,263 high earners.

  1. Utah
  2. Idaho
  3. Nevada
  4. Colorado
  5. Tennessee
  6. South Carolina
  7. North Carolina
  8. Arizona
  9. Texas
  10. Florida

Another compelling detail of the states on this list pertains to income tax. In short, three of the states don’t levy personal income tax.

Above, they’re the states in bold: Florida, Nevada, and Texas.

Top 10 Outflow States

So, above are the ten states are seeing the greatest an inflow of high-earning households. Which means, of course, there’s an inverse.

Below, the ten states experiencing the greatest outflow of high earners. Unsurprisingly, SmartAsset deems several entries on the list high-tax states. Also, Washington, DC, is a high-tax area.

Moreover, the list below includes five of the top ten high personal income tax jurisdictions (in bold).

  1. Ohio
  2. Minnesota
  3. Washington, DC
  4. Maryland
  5. New Jersey
  6. Virigina
  7. Massachusetts
  8. Illinois
  9. California
  10. New York

However, it’s not as though these states are seeing a massive exodus of high-earning households. In fact, per SmartAsset, these states have more high-income households than the national average.

Nationally, high-earning households account for less than seven percent of all tax filers. According to SmartAsset, nearly nine percent of tax filers are high-income households in the top ten outflow states.

Image: Trevor Neely on Unsplash

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What’s Next in the F&B Design Space?

What’s Next in the F&B Design Space?

by David Klemt

Interior of world's first crypto bar

Design driven by a story and narrative, technological innovation, and people’s desire to socialize are what’s next in hospitality design.

The influences above are factoring into the current approach to design in the F&B space. Be it a hotel or restaurant, the F&B landscape is going to look different for several reasons.

Five leading industry experts addressed this topic during HD Expo 2022‘s “F&B Trends: What’s Next?” panel.

Technology

Well, let’s start with arguably the biggest “trend” in F&B. Our industry is finally making major advancements in the area of technology.

It may not seem like it to some, but speaking generally, hospitality hasn’t always found itself on tech’s bleeding edge. That’s changing.

In fact, some industry experts feel we may be moving too quickly. For example, an interesting prediction from Restaurant Leadership Conference 2022 is a more deliberate approach to developing and implementing hospitality-specific tech.

Now, that doesn’t mean we’ll see a significant slowdown in tech innovation. Rather, innovators may take a more calculated approach to truly relieve hospitality pain points.

For example, Adam Crocini, senior vice president and global head of food and beverage brands for Hilton, points to a few innovations now common throughout the industry. Digital order, digital pay, and the ability to deliver food essentially anywhere within a hotel, resort or casino property are tech solutions driving efficiency.

However, Crocini sees one segment in need of a specific solution. In the luxury segment, guests prefer in-person engagement with staff and tactile engagement with physical menus.

Ari Kastrati, chief hospitality officer for MGM Resorts International, seems to agree. Tech, says Kastrati, shouldn’t replace human connections. Rather, technology needs to enable and enhance.

The Experience

When it comes to design, much of the focus is on the impact it will have on the guest or consumer. However, the end user is hardly the starting point.

For Kastrati, a successful project begins with the development of a relationship. That relationship is between the designer, the operator, and the concept. If care isn’t taken to nurture that relationship, it will likely show in the final product.

In Crocini’s eyes, that relationship informs the development of the operator’s concept. How? Through the development of a story and narrative.

If the designer and operator can develop a story, the design can be grounded in said story. Further, every element of a design can be held up against that story to see if it “fits.” If it does, the design will deliver a holistic experience and engage the guest or consumer.

In terms of F&B, Kastrati and Crocini make similar points. Both feel knowing the guest and anticipating their needs is crucial.

Addressing design elements that impact the experience, Crocini believes design should start with lighting. A design without proper lighting, Crocini says, is like a Scorsese film without the score.

Alexis Readinger, founder of Preen, is focusing in part on unique floorplan design. In particular, Readinger likes features that encourage interaction between guests, such as communal loveseats. However, “protecting the introverts” is also important for some guests’ comfort levels.

It’s safe to say that Caroline Landry Farouki, partner at Farouki Farouki, agrees with Readinger and Crocini. Seating, says Landry Farouki, can create different levels of intimacy to engage extroverts and introverts, and lighting designers are crucial and can really tell the story.

F&B Trends

In terms of consumer trends, Kastrati points to something specific he’s seeing in Las Vegas. People are seeking out specialty restaurants and luxury retail. At least anecdotally, this confirms what many reports and experts have been saying for the past few years: Consumers are showing increased interest in luxury.

However, Kastrati’s focus in the F&B space isn’t solely on guests and consumers. Rather, he suggests that the next step is bringing people back to the workforce. As Kastrati says, there’s no hospitality without people. Kastrati believes all of us in the industry need to encourage people to pursue hospitality careers.

Switching gears, Jessica Gidari, director of design and concept development for Union Square Hospitality Group, points to an effective pivot as a possible industry trend.

At least one concept in the Union Square portfolio has pivoted from a restaurant to a cocktail bar. A menu with shareable plates leverages guest desire to socialize and share. Gidari also says doing away with some traditional two- and four-top tables and replacing them with communal seating can “rebrand” a space as a “convivial” lounge.

Landry Farouki thinks operators can count on two compelling trends in the F&B space. One is the return of the restaurant as “the bar.” As someone who lives and works in Las Vegas, I can attest to treating restaurants more as bars myself.

Another possible trend Landry Farouki predicts is “mature dining” replacing fine dining. Explaining mature dining, Landry Farouki says such a concept is chef-driven but doesn’t focus solely on the chef.

Trend predictions must be taken with a grain of salt. However, I only see upside for design that helps operators engage guests more from the start.

Image: LYCS Architecture on Unsplash

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The 2022 Hospitality Design Forecast

The 2022 Hospitality Design Forecast

by David Klemt

Perspective shot of neon hotel sign

Four 2022 HD Expo panelists are focusing on very specific design elements and considerations informing the future of hospitality design.

It should come as no surprise that their industry forecasts embody the themes of this year’s hospitality design show.

In fact, each panelist appears to be embracing the overall theme: Community. For these experts, designers must be mindful of their impact on communities.

Sustainable Practices

Enrique Vela, director of interiors at Olson Kundig, prefers the term “performance building” to sustainability. At Olson Kundig, performance building informs every stage of each project.

Further, the firm doesn’t focus solely on their approach to sustainable design, construction, and operation. According to Vela, Olson Kundig wants to know how their vendors approach sustainability as well.

And going even further, Vela and the firm want to see a commitment in sustainability (or performance building) from their clients. On that front, Olson Kundig’s are showing more interest in sustainability.

The firm’s desire to see commitment from their clients makes sense. After all, getting close to net zero during a build is difficult in the best of conditions. If a client has a laissez-faire attitude toward a core design tenet, the project isn’t off to a great start.

Andrew Lieberman, design director at AvroKO, seems to take a similar view as Vela and Olson Kundig.

As Lieberman sees it, “the entire ecosystem is impacted by a project.” Therefore, social consciousness needs to be a core element of a project.

Per Lieberman, he and AvroKO are seeing an increase in interest in sustainability from clients.

Focus on Wellness

Meghann Day, partner at Hirsch Bedner Associates, is seeing the interest in wellness proliferating beyond the hospitality space. HBA’s multi-family projects are incorporating wellness amenities into design in increasingly prominent ways.

For instance, clients are showing interest in infrared saunas and other cutting-edge wellness features in their homes. Per Day, wellness is quickly steering away from taking up a corner in a space and driving toward inhabiting entire floors.

Why should hospitality designers care about what’s going on in residential design? Simple: Hotels and resorts are homes away from home. In fact, they’re also becoming offices away from home offices.

What people want in their homes (and workspaces) they also want—and expect—from the hotels and resorts they visit.

For now, HBA is seeing the growth in wellness through traditional amenities. However, new elements will become more common in the near future.

Lieberman and AvroKO are also experiencing increasing interest in wellness design features. This interest is coming from the firm’s clients, meaning guests and residents are seeking out wellness amenities.

Community Engagement

Interestingly, the panelists have a clear interest in off-premises service. And no, I’m not referring to F&B delivery or offering guests local experiences.

Rather, today’s designers are enthusiastically designing for the communities in which they and their clients are building.

As Vela sees it, designers must consider the community. For him, engaging the community is crucial to a project’s success. The reasoning is simple: A project is inarguably tapping into the build site’s culture, heritage, history, and people.

For Lieberman, wellness and sustainability in the hospitality space combine feeling good, doing good, and impacting the community. A community is its own ecosystem, and that ecosystem is impacted by a designer and their client’s project.

Another way of viewing a hotel or resort is that it’s a portal into the community, per Lieberman.

He and Vela believe a project will be far more engaging if the community and its culture are honored through its design. As Vela says, we create the best memories when all of our sense are engaged.

F&B Memberships

While not a large focus of this HD Expo 2022 panel, food and beverage did come up. However, it didn’t focus just on people’s desire to return to restaurants.

For example, Lieberman is seeing interest in F&B memberships. In his version, a membership space lives within the main restaurant. For these spaces, designers and operators can go overt or covert.

In one example, the members-only space is accessed via the main dining room. That means guests without memberships can see the members going to their exclusive space. In turn, that should generate interest in memberships.

On the opposite end, a membership space could be kept secret. Loyal guests may not know about these memberships and spaces for months or years.

Either way, the key to executing these spaces is creative, multi-faceted design, according to Lieberman.

Another way to use F&B spaces comes from Day. This downtime solution is simple and can generate much-needed revenue.

As Day explains, the approach is similar to that of a WeWork space. The operator creates a WeWork-like membership. During slow hours, these members have access to the restaurant.

Their membership entitles them to WiFI and menu access. Members would still pay for F&B items, but at a discount.

Technology

When it comes to technology, Ken Patel and EV Hotel are taking things as far as possible without turning off guests.

Patel is the founder and CEO of EV Hotel, and he has nearly three decades in the industry. Three years ago he had the vision for what is now EV Hotel.

Putting his view of hotel design and tech bluntly, he says that the only innovation in this space has been replacing small TVs with bigger versions. That may seem harsh, but consider what Patel is really saying: Hospitality, in his opinion, isn’t innovating fast enough.

Well, that’s certainly not the case with EV Hotel.

EV has launched the world’s first crypto rewards program. They’re the first hotel group to enter the metaverse fully built, and they operate the first-ever crypto trade floor. What’s more, Patel predicts that the metaverse will be an $8 trillion industry in a mere six years.

According to Patel, each EV Hotel room contains between 15 and 18 brand-specific tech developments. And while they may not have a dedicated fitness center, EV features an interactive exercise bike studio.

Now, it may seem at first glance that EV is developing and implementing tech innovations simply for the sake of doing so. However, Patel would argue against that perception of his brand.

“We have to match innovation to technology,” he says. That means reducing the amount of tasks employees take on that have nothing to do with serving guests directly.

Automating backend tasks allows EV team members—they all carry the title experience employee—to focus much more on the hospitality experience for guests. And a greater focus on hospitality means a greater focus on personalized experiences.

Takeaway

Thoughtful design that combines wellness, sustainability, and technology will not only serve communities, it will build them as well.

There’s the community in which a hotel or resort operates and which it must take care to honor and serve. There’s the community of employees serving guests and the community at large. And there’s the community of guests that frequent the property.

The future of hospitality design is looking bright, indeed.

Image: Francesco Ungaro

by David Klemt David Klemt No Comments

SevenRooms Reveals Hotel Guest Study

SevenRooms Reveals Hotel Guest Study Results

by David Klemt

Male passenger with suitcase at airport

Americans eager to get back to normal and make up for lost time are traveling in droves, and hotels will have to adapt in order to earn their business.

To give hotel and resort operators an edge, SevenRooms today reveals the results of their latest study.

“Booking Behaviors: Exploring Hotel Guest Loyalty,” contains datapoints all hotel operators should know.

The report, a collaboration with YouGov, focuses on two types of travelers.

Competitive Incentives

Before I address the who, let’s take a look at data that highlights the what.

According to the SevenRooms and YouGov report, nearly half of consumers say that loyalty programs are important. Per SevenRooms, loyalty programs influence hotel choice for 44 percent of guests.

Regarding American hotel guests specifically, 34 percent of guests will consider rebooking if their loyalty status receives recognition upon check-in.

However, loyalty status recognition isn’t enough for guests to book a hotel again. To understand what will influence that decision we need to take a look at SevenRooms’ traveler types.

Leisure

SevenRooms and YouGov look at two travelers for their report. There’s the Personal Patron and the Business Traveler.

Let’s focus on the former first. Per SevenRooms, to say the Personal Patron is eager to return to travel is an understatement.

The Personal Patron is a leisure traveler who has been climbing their walls for more than two years. They’re planning to travel “with a vengeance” this summer.

Diving deeper, the Personal Patron is most probably a female over the age of 35.

While recognizing this traveler for their loyalty program membership is smart, it’s not enough to influence a rebook. Rather, the Personal Patron places greater value on:

  • receiving more loyalty program points in exchange for dining and drinking at property-operated restaurants and bars;
  • enhanced credit card rewards; and
  • earning dining credits upon reaching a new loyalty program tier.

However, there’s a problem inherent to the Personal Patron and loyalty programs. Just 45 percent—so nearly half—of this traveler type are loyalty program members.

The reason for that low program buy-in? Almost 60 percent don’t think they travel enough to benefit from hotel loyalty programs.

Per SevenRooms, there’s a rather simple solution: local benefits. Tempt Personal Patrons with staycations and access to amenities at hotels in their home markets. Another idea is to offer points exclusively for dining that this traveler can use where they live.

Business

Obviously, the business traveler is now different. In fact, SevenRooms considers two versions of the Business Traveler.

On the one hand, there’s the extended-stay version traveling all over the country. And on the second hand, there’s the long-distance Business Traveler who’s seeking a midweek “home base” hotel.

Either way, the Business Traveler is most likely a male aged 18 to 34.

Per SevenRooms—and as most hotel operators likely know—this traveler probably doesn’t have time (or interest) in exploring off property. Therefore, the Business Traveler can be influenced to rebook through incentives that make their stays better.

These include:

  • receiving more loyalty program points in exchange for dining and drinking at property-operated restaurants and bars (like the Personal Patron);
  • receiving recognition for being a loyalty program member; and
  • getting a complimentary drink on check-in; or
  • being given a choice of an F&B amenity on arrival.

Unsurprisingly, the Business Traveler is more likely than the Personal Patron to join a hotel loyalty program. Per SevenRooms, 55 percent of Business Travelers say that the ability to participate in such a program influences their hotel choice.

Focusing on perks that “reward” the Business Traveler for their hard work can convert a Business Traveler to become a loyal guest for a particular hotel or hotel group.

SevenRooms suggests priority reservations for the lunch daypart at restaurants on property. Also, providing their favorite drink (wine, cocktail, beer, etc.) with their room service orders can be influential.

Takeaway

Travel is gaining steam, restaurants and bars are seeing an influx of reservations, and hotel operators need to prepare for summer travelers.

As a reservation, guest experience, and guest retention platform, SevenRooms can ensure operators can easily collect guest data. Guest data, for example, like F&B and room preferences.

More importantly, the platform makes it simple to use that data responsibly, effectively, and simply.

To learn more about SevenRooms, click here.

Image: JESHOOTS.COM on Unsplash

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Key Themes from HD Expo 2022

Key Themes from HD Expo 2022

by David Klemt

Mandalay Bay Resort & Casino Las Vegas

The educational conference sessions at Hospitality Design Expo 2022 in Las Vegas were connected by a number of key, overarching themes.

Hosted by the Mandalay Bay Convention Center, HD Expo packed each day with invaluable education. Founders, designers, highly placed executives, and other influential industry professionals addressed a wide range of crucial topics.

Below are five key topics and themes from HD Expo 2022.

Sustainability

Unsurprisingly, sustainability was one of the most-discussed topics.

Of course, conversations about sustainable design, construction, and operational practices have been at the forefront of hospitality for several years now. However, the topic seemed supercharged this year at HD Expo.

Drilling down, speakers at the 2022 show are focusing on “building performance,” light-touch construction, and waste recovery, to name but a few session topics.

When some think about sustainability, they think of low- and no-waste practices, energy efficiency, and upcycling. For others, being sustainable means building in an eco-friendly or green way.

However, several HD Expo 2022 speakers, their teams and agencies, and their partners and clients are thinking more locally. The impact of building and operating on local communities is now a greater focus.

For example, Victor Body-Lawson, founder and principal of Body Lawson Associates Architects & Planners. During a panel he co-presented, Body-Lawson addressed the importance of designing, building, and operating for the local community.

In short, he explained how not using local materials and labor has a significant negative impact on the environment. Additionally, Body-Lawson feels that the objective of design is that whomever engages with end product—commercial or residential—comes out better.

Wellness

Refreshingly, it appears the stigma surrounding wellness is dissipating. More people seem to be more comfortable discussing their mental and emotional health openly.

Designers and their clients, particularly in the hotel and resort space, are taking note.

Long a staple amenity, the health center is undergoing reinvention. In fact, many resorts and hotels are focusing on wellness centers and programming.

In fact, a number of concepts are more wellness and healing getaway than hotel or resort. One such project coming to market is the Jenesis House.

The creation of Jenesis Laforcarde, this concept’s focus is explicitly mental health, physical well-being, and self-care. Additional core values are community, hiring local, and engaging with local small businesses.

Diversity, Equity, Inclusion

Like the topic of wellness, DEI has received more earnest attention during the pandemic. And why not? Diversity, inclusion, and equity are inextricably connected to wellness.

Of course, DEI is also connected to community. Moving forward, designers, their partners, and their clients must focus on DEI within their companies and local communities.

One hotel brand that seeks to embody this mission is Caption, part of the Hyatt portfolio. Crystal Vinisse Thomas, VP and global brand leader of lifestyle and luxury brands for Hyatt, is bringing Caption to market.

At this brand’s core is community. Locals are as important as the travelers staying at a Caption property. And, again, why shouldn’t that be the case?

Locals will work at the hotel. Locals will use the hotel. And locals will feel the impact—positive or negative—of the hotel.

A visit to the website provides all the proof anyone needs that Caption is committed to locals:

  • “The people make the place here. We hire local, buy local, and vibe local.”
  • “We strive to be a good neighbor.”

Interestingly, Thomas tied DEI and the community together. While it may be a difficult conversation to start, if a designer, executive, partner, or client sees that a project isn’t representing the community, they need to address it.

Staying silent isn’t how things move forward. In fact, it’s a sure-fire way to take steps backward.

Discovery

What keeps guests coming back? Is it the amenities of a hotel? The food and beverage? Do guests return because of the service they receive?

Of course. However, a shift in guest behavior and expectations shows that F&B, amenities, and service may no longer be enough to motivate repeat visits.

When it comes to hotel and resort design, the future is discovery. Another way to think about discovery is the “hotel within the hotel,” or “resort inside the resort.” A concept that embraces this approach reveals layers that guests can discover.

Perhaps their first stay is in the main or more traditional space. Then, the guest discovers that there are different areas they can book for a stay. These could be villas, luxury tents, a pre-fab luxury Moliving unit (as an example)…

The point is that the guest knows they can engage with the property differently during each stay. While there are core elements that define a particular brand, they can deliver different experiences on the same property.

Of course, such a concept also ties into the themes of community and wellness. Many brands are eschewing the traditional operational ethos of attempting to keep a guest on property for as long as possible. Instead, the local community is a key experiential element of a hotel or resort.

The future of hospitality design—indeed, of hospitality as a whole—encompasses each of these themes. Perhaps most importantly, each theme serves a greater concept: Community.

Image: tommao wang on Unsplash

by David Klemt David Klemt No Comments

Forward Progress: Trends by Venue Type

Forward Progress: Trends by Venue Type

by David Klemt

High contrast image of blue cocktail with lemon zest

One notable difficulty with considering new trends is that they’re not all necessarily a universal fit for all venue types.

For example, what may work well in an upscale restaurant perhaps won’t perform as well in a sports bar. Pursuing a trend that isn’t a good fit, obviously.

As any operator with experience knows, chasing fads and trends just to chase them can be costly. Doing so costs money (inventory, training, labor hours) and time deserving of better allocation.

However, failing to embrace any trends can also be costly. Watching a lucrative trend pass by can cost an operator guest engagement, perception, and traffic.

Take, for instance, the success of White Claw. Plenty of operators and consumers scoffed at the hard seltzer category as a whole at first.

Then, some people decided it was a drink category “for women.” As it exploded in popularity, hard seltzers proved immensely popular with men.

Basically, it’s an incredibly strong beverage alcohol category that resonates with a wide range of consumers. On some menus, hard seltzers are listed alongside beers.

So, hard seltzer, led largely by White Claw, showed itself to be a worthwhile trend to adopt.

Clearly, however, hard seltzer doesn’t resonate with all guests on all occasions in all types of hospitality venue types. For instance, generally speaking, a bucket of White Claws likely to be a top seller in a high-end restaurant specializing in seven- to nine-course meals.

Drink Trends by Venue

During Bar & Restaurant Expo in March of this year, Amanda Torgerson of Datassential presented 2022 drink trends operators should know.

One trend has essentially proliferated the industry. Really, it’s likely wise for us to all view this trend—hard seltzer—as mainstream now.

In the context of Torgerson’s presentation, Datassential is saying that hard seltzers are here to stay.

Among other trends, Torgerson shared Datassential’s data-backed view of drink trends segmented by venue category.

While every venue is unique and not every trend will work for every bar or restaurant in a given category, the results are no less intriguing.

Pubs: Dry-hopped beers, pastry stouts, and hard or spiked coffee.

Sports Bars: Mini-beers, hard seltzer, and reusable growlers.

Casual Bars: Seltzers with unique flavors, hard tea, hard lemonade, and drinks featuring local ingredients.

Upscale Bars: Negroni, wine-barrel-aged spirits, and flaming cocktails.

Nightclubs: Hard seltzers served with spirits, cocktails and punch bowls served with dry ice, and flaming cocktails.

Casual Restaurants: Wine cocktails, elevated brunch cocktails, and tea-based alcohol beverages.

Upscale Restaurants: Flaming cocktails (smoked may be better), all-natural wines, and made-to-order cocktail cart presentations.

Hotels, Resorts and Casinos: Made-to-order cocktail carts, alcohol vending machines, and drinks made with cold-pressed juices.

Interestingly, a few of the above trends identified by Datassential appear in multiple venue types.

The main things for an operator to keep in mind is what will resonate with their guests and what’s authentic to their brand. When it comes to trends, one size doesn’t fit all and an individual venue’s mileage will vary.

However, the above list should at least show operators what Datassential sees resonating with guests in an array of venues.

Image: Ozge Karabal on Pexels

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