Leisure | KRG Hospitality

A laptop next to a roulette wheel, surrounded by poker chips, dice, and playing cards

October 24, 2023by David Klemt David Klemt No Comments

What Does the Future Hold for iGaming?

What Does the Future Hold for iGaming?

by David Klemt

Like this, but in your pocket, basically.

With so many states legalizing sports betting, the next frontier appears to be Internet gaming or “iGaming.” So, why is it taking so long to move forward?

It seems like a no-brainer, right? Consumers are carrying the internet around with them in their pockets and on wearables. If it’s good business to meet consumers where they are, giving them the ability to place bets online makes sense.

Further, commercial gaming is worth about $60 billion in the US alone. And depending on the source and how we define the term, around 60 percent of adults in America gamble at least once per year. That number climbs to perhaps as high as 85 percent for adult Americans who gamble at least once in their lifetime.

So, those are all impressive numbers. Tens of billions of dollars, hundreds of millions of potential bettors… Intriguingly, tens of millions of Americans plan to bet on the current NFL season.

Per a 2023 Global Gaming Expo panel, iGaming generates nearly $6 billion in revenue annually. Panelists posit this form of gaming will generate $30 billion if and when casinos embrace it.

Incredibly, iGaming, in the handful of states where it’s legal, is generating similar revenue to traditional gaming. This is notable because it hasn’t taken decades to achieve.

Then, there’s sports betting. If sports betting is now legal in dozens of states throughout the country, why isn’t iGaming legal in most of the country as well? Interestingly, the answer to that question ties into sports betting.

iGaming and the current evolution of sports betting are two topics I’m just starting to really dive into. So, I’ll do my best to share what I’m learning accurately and with actionable information.

Slow Progress?

On May 14, 2018, the Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA) of 1992. With PASPA gone, sports betting is legal in more than 30 states and Washington, DC.

Additionally, legislation to legalize sports betting has been introduced in more states. So, we can expect this form of betting to gain traction in more of the country.

Ironically, it’s the explosion in sports betting over the past five years contributing to the slow progress of iGaming.

Simply put, according to Howard Glaser of Light & Wonder, is that dozens of states just agreed to legalize sports betting. During the G2E panel he moderated, Glaser explained that it’s not a wise idea to now approach the same governing bodies and say, “Hey, we forgot to add iGaming when we asked you to legalize sports betting. Can you throw that in now?”

Another item to consider is the fear of casinos in cannibalizing their existing business. Other factors are responsible gaming (who’s keeping tabs on a bettor’s behavior if they’re behind a screen?) and the illegal or “invisible” iGaming market.

So, for now at least, iGaming is legal in just eight states: Connecticut, Delaware, Michigan, Nevada, New Mexico, Pennsylvania, Rhode Island, and West Virginia. However, Nevada isn’t even in the regulatory stage yet, and Rhode Island won’t launch iGaming until some time in 2024.

According to Anika Howard, the president and CEO of WONDR Nation and a guest on Glaser’s G2E panel, Connecticut is further developing iGaming regulations.

Now What?

For now, we wait and watch. Connecticut and New Jersey appear to be leading the way for iGaming in the US. However, the G2E panel notes that the US is far behind the UK when it comes to iGaming.

In fact, Howard says that when it comes to this category, the US is learning from the UK and how they approach it.

Further, the panel appears to agree that many people in the industry have their eyes on Nevada. There’s a belief that industry professionals in Nevada are taking their time so that when they launch iGaming it will be of great benefit to the state of Nevada’s overall gaming industry rather than a threat.

In other words, when Nevada goes live with iGaming, the state will likely be the country’s leader. That is, of course, speculation. After all, New Jersey legalized online casinos back in 2013.

However, the legislation that made online casinos legal in the state expires in November. I would expect there’s already a plan in place, and New Jersey may remain as the iGaming leader for some time.

For now, operators who want in on the iGaming action can plan ahead. One way to do this is to secure their iGaming domain (or domains) so that when it goes legal, they’re prepared.

It’s logical to expect more iGaming dominos to begin to fall in 2024, and for even more to topple in 2025. Are you ready?

Image: Aidan Howe on Unsplash

October 23, 2023by David Klemt David Klemt No Comments

Intersection of Streaming & Sports Betting

The Intersection of Streaming and Sports Betting

by David Klemt

The popularity and ubiquity of sports betting is exploding throughout the US, and its seemingly inescapable presence is due in large part to streaming.

This is one topic we learned about during our first visit to the Global Gaming Expo, also known as G2E.

It’s true that gaming and hospitality are two distinct, different industries. However, they’re inextricably connected. And with gaming platforms and mobile devices making it even easier to place bets on sports, that connection is only getting stronger.

Now, I’m going to take a moment to make my relationship with gaming clear. First, I’m not an expert on the industry. Second, I rarely partake in gaming even though I live in Las Vegas. I’ll throw the odd twenty into a small handful of specific slot machines, but that’s the extent of my gaming experience. I think it has been a decade since I last played craps.

So, I’m going to do my best to share what I learned during G2E. The show is an educational experience for me, and I feel that hospitality business operators can benefit from its sessions.

As far as the hospitality-gaming relationship, however, I certainly believe they’re complementary industries. This is absolutely true in Las Vegas, and it’s true in other markets as well. If casinos weren’t aware that hospitality is crucial to keeping guests returning and risking their cash on games, they wouldn’t bother focusing on dining, drinking, nightlife, and other hospitality amenities.

I’m also confident saying Las Vegas in particular wouldn’t have generated nearly $15 billion in 2022. And casinos throughout America wouldn’t have generated over $60 billion last year.

In summary, the connection between hospitality and gaming is what drew me to G2E this year.

Watershed Moments

One of the sessions I attended was “Streaming X Sports Betting: The Future of Engaging Gen Z.” Adam I. Kaplan, the chief operating officer of SportsGrid, was the speaker.

SportsGrid, I’ve since learned, is multimedia sports betting network. According to Kaplan, the ad-supported network is available on more than 40 platforms and accessed by millions upon millions of mobile devices

Users can access SportsGrid 24/7 via smart TV or their dedicated app. Additionally, people can stream SportsGrid via other platforms, such as:

Roku;
Prime Video;
YouTube TV;
Sling;
Freevee; and
Plex.

Per Kaplan, we can trace the creation of SportsGrid to two genesis points: the creation of Napster, and the introduction of the iPhone.

The launch of Napster in June of 1999 was, of course, a watershed moment. And its influence on society is undeniable. According to Kaplan, the platform’s influence included the belief that content should be free.

When the iPhone hit the scene in January of 2007, it, too, was a massive milestone. Part of its success, as Kaplan pointed out, was how easy it made for users to engage with content.

Taken together, Napster and the iPhone have “taught” people that content should be free and easy to access. And their launches have led to the rise of iGaming and sports betting.

Sports Betting Repeal Day

Like hospitality, sports betting has their own Repeal Day. Whereas bars and restaurants celebrate on December 5, gaming would celebrate May 14.

That’s the day in 2018 that the United States Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA) of 1992. Essentially, PASPA banned sports betting in the US, with narrow exceptions for four or five states.

When PASPA was overturned on the basis that the act violated the Tenth Amendment (states’ rights), several states made moves to legalize sports betting. Currently, sports betting is legal in some form in more than 30 states and Washington, DC.

During the five-year period following the end of PASPA, sports betting has gained massive traction throughout the US. Several publications report that the NFL in particular sees the most betting action.

According to the American Gaming Association, 73 million Americans plan to bet on the 2023-2024 NFL season specifically. That’s up from 46 million in 2022, a huge leap.

Of all adults who said they’d bet on sports this year, 14 percent (more than 35 million people) plan to place their bets online.

Per SportsGrid’s Kaplan, people aged 40 and under—so, Millennials and legal-age Gen Z—make up the majority of sports bettors. Looking at sports betting as an engagement driver, businesses should see the opportunity to attract sports bettors as customers and keep them loyal.

Skin in the Game

As Kaplan points out, one reason that sports betting drives engagement is the sense a bettor has of having “skin in the game.”

Well, they aren’t the only people who want skin in the sports betting game.

Since PASPA ended, hospitality venues across the country have attempted to get in on the sports betting phenomenon. This makes perfect sense, particularly for sports bars.

What operator in that space wouldn’t love the ability to stream content from a platform like SportsGrid, FanDuel TV, or DraftKings Network, with their guests permitted to place bets while inside the venue, legally?

That opportunity could prove incredibly lucrative, generating significant traffic and sales. And that’s to say nothing of the marketing, promotions, and guest loyalty opportunities. Think of what legalized on-premise sports betting could do to attract fantasy sports league participants…

Additionally, venues that can stream sports betting content and encourage betting on-premise (again, legally) could prove incredibly popular with one of the age groups operators focus on the most: the 21- to 34-year-old segment.

So, it appears one of the next frontiers for hospitality is pushing for the legalization of sports betting on-premise. Operators in favor of guests being allowed to place bets while onsite can either wait and see or actively engage their lawmakers.

What a time, eh?

Image: Adrian Curiel on Unsplash

The Federal Trade Commission Building in Washington, DC

October 18, 2023by David Klemt David Klemt No Comments

Restaurant Fees Facing FTC Scrutiny

Restaurant Fees Facing FTC Scrutiny

by David Klemt

The focus on rising costs and hidden or “junk” fees over the past few years is bringing the Federal Trade Commission’s attention to the restaurant space.

Really, it was only a matter of time. Consumers are quite clearly fed up with being hit with unexpected fees. Whether purchasing concert tickets or popping into a QSR for a quick bite, they’re over the perceived nickel and diming.

That’s to say nothing of the other businesses that consumers feel are going too far with fees.

However, much of the public conversation about junk fees revolves around restaurants, and in some instances bars, as well. A common refrain on social media and online communities is, to paraphrase, “Just tell tell us what it costs on the menu!”

Of course, there are consumers who don’t want businesses to raise their prices at all. There’s no reasoning with these people, and they see all increases and fees—even those that aren’t hidden or bogus—as ripoffs.

But there are those who understand the challenges operators are facing. Understandably, these people just want transparency. And they want to have a clear idea of what it will cost to dine and drink somewhere before they plan their visit or are handed their check.

These consumers now have allies in state and federal governments.

FTC Focuses In

Some people may be surprised to learn that the FTC’s focus on junk fees isn’t entirely new. In fact, the agency has been digging into this topic for nearly a year.

Last November, the FTC asked for the public for their opinions on deceptive and unfair practices. Specifically, practices that relate to junk fees. Per the FTC, American consumers are paying tens of billions of dollars in junk fees annually.

According to the agency, they received 12,000 comments.

Now, with the support of the White House, one would assume, the FTC is asking for public input again. This time, the agency is seeking comments about a rule their proposing to address junk fees.

Last week, both the White House and FTC proposed rules that will make it mandatory for businesses to disclose all fees up front. Additionally, the White House wants to curtail “excessive” bank fees for basic services.

Put simply, the FTC’s proposal will ban hidden fees, require transparency regarding all fees, and allow the agency to impose penalties.

And now, after zeroing in on airlines, landlords, utilities, entertainment, and banking, the FTC is looking at hospitality.

Restaurants Under Scrutiny

As they did in November of last year, the FTC is once again asking for the public to comment on fees. This time, however, restaurants have been included by the agency.

To be sure, this focus isn’t exactly new. Washington, DC, for example has addressed junk fees in the restaurant space. As with other jurisdictions that have tackled this topic, restaurants must be conspicuous and make guests aware of all fees before their checks arrive. Additionally, operators must be clear about their intended use for fees.

In Washington, DC, a violation of these rules can lead to a $5,000 fine for a first-time offense. That penalty can rise to $10,000 for additional violations.

California has also passed Senate Bill 478, signed into law by Governor Gavin Newsom. This law, which also targets hidden fees, takes effect on July 1, 2024.

Most likely, the FTC is seeking comment to make adjustments to their proposed junk fee rule in order to include restaurants. From what I’ve seen, restaurant delivery fees in particular are drawing the ire of consumers and attention of state and federal agencies.

“All too often, Americans are plagued with unexpected and unnecessary fees they can’t escape. These junk fees now cost Americans tens of billions of dollars per year—money that corporations are extracting from working families just because they can,” says Lina M. Khan, FTC Chair.

Consumers will have 60 days to submit their comments to the FTC.

Takeaway

Proactive operators who haven’t already done so should make their in-person dining and delivery fees obvious.

Best practices for fee transparency include highlighting them on menus; announcing them via table tents or talkers; including fees on websites; and including a notice or disclaimer on reservation pages.

However, operators should avoid viewing being transparent about fees through a lens of compliance. Rather, being clear and upfront with guests is just good business. In fact, it’s in keeping with the spirit of hospitality and service.

If the final experience a guest has with a restaurant is being unpleasantly surprised by their check due to junk fees, how should be expected to respond? Their perception of the venue or brand will plummet, and they won’t return. How long can a restaurant sustain that guest reaction before the damage is irreparable and an operator has to close their doors?

Operators are being asked to thread a needle every day. Costs are rising and there are only so many solutions available to most operators that can keep their doors open, keep guests and staff happy, and pull the business toward long-term success.

To be clear, fees are generally fine—if consumers feel they know what to expect ahead of their visit. Nobody wants to be surprised, and that shouldn’t be difficult to understand.

So, operators need to be transparent about fees. They need to consider dynamic pricing for menus. That requires an absolute understanding of costs, guest tolerances for pricing, and the market.

The payoff, however, is happier guests who are far more likely to return for in-person dining and to place delivery or takeout orders. Savvy operators will put the work in now to get ahead of the junk fee fallout.

Image: Ian Hutchinson on Unsplash

Tres Monos bar in Buenos Aires, Argentina

October 17, 2023by David Klemt David Klemt No Comments

These are the 50 Best Bars of 2023

These are the 50 Best Bars of 2023

by David Klemt

Tres Monos in Buenos Aires is number 11 and the winner of the Michter’s Art of Hospitality Award.

According to the World’s 50 Best, these stunning examples of operations, service, and atmosphere from around the globe are the best bars of 2023.

For the first time, the incredible collection of bars was revealed during a ceremony in Singapore. I watched this year’s ceremony via the World’s 50 Best Bars live stream and the energy was palpable just through the screen. We’ll have to consider attending the 2024 ceremony in person.

The 50 bars that have earned placement on this list should serve as inspiration for operators and hospitality professionals throughout the world. Whether considering operations, service, building a top-performing team, menu, design, or atmosphere, these bars are reaping the rewards of hard work and a commitment to hospitality.

As we’ve had the incredible honor of speaking with a number of the bars on this year’s list for our Bar Hacks podcast, we’ve linked a few of the bars below to their episodes.

The Numbers

The 15th edition of World’s 50 Best Bars ranks bars in 28 cities from around the globe.

Among individual cities, London claims the most bars on this year’s list with five. Further, two of those bars are in the top ten.

Mexico City is home to four bars on the list, while New York boasts three, plus the winner of the Altos Bartenders’ Bartender Award. These two cocktail bar titans will go head to head for some time from what I can see, and we’re all the better for this friendly rivalry.

Overall, the UK is home to six venues on the 2023 list. Also performing well are the US and Italy, with each claiming five bars on the 2023 list. With four bars, each in Mexico City, Mexico also does very well for 2023.

This year’s host city, Singapore, boasts three bars, along with the Bar Design Award recipient. Greece also earns three spots, with one bar taking home the Legend of the List Award. There are three bars on the list in Argentina as well, all in Buenos Aires. One of these bars offers such outstanding service that it’s this year’s Michter’s Art of Hospitality Award recipient.

Another country with three bars on the list is Spain. Not only can the country now boast about being home to the bar holding the number one spot, it’s also where number four is located. Oh, and the number four bar just happens to be last year’s top bar in the world. Clearly, Barcelona is staking a claim to the Cocktail Capital of the World.

Sadly, Canada isn’t represented on this year’s list. However, Civil Liberties in Toronto does hold the number 73 spot.

Congratulations to the bars and their teams on the 2023 list, and the individual award winners! Cheers!

The World’s 50 Best Bars 2023

Galaxy Bar (Dubai, United Arab Emirates)
Jewel of the South (New Orleans, Louisiana, United States of America)
Atlas (Singapore)
The Clumsies (Athens, Greece)
Locale Firenze (Florence, Italy)
Baltra Bar (Mexico City, Mexico)
L’Antiquario (Naples, Italy)
Carnaval (Lima, Perú)
1930 (Milan, Italy)
Scarfes Bar (London, England, United Kingdom)
Mimi Kakushi (Dubai, United Arab Emirates)
Panda & Sons (Edinburgh, Scotland, United Kingdom)
The Cambridge Public House (Paris, France)
Bar Benfiddich (Tokyo, Japan)
The SG Club (Tokyo, Japan)
🔶🟥🔵 A Bar with Shapes for a Name (London, England, United Kingdom)
Argo (Hong Kong, China)
Freni e Frizioni (Rome, Italy)
Sago House (Singapore)
Röda Huset (Stockholm, Sweden)
Florería Atlántico (Buenos Aires, Argentina)
Wax On (Berlin, Germany)
Satan’s Whiskers (London, England, United Kingdom)
Katana Kitten (New York, New York, United States of America)
CoChinChina (Buenos Aires, Argentina)
Baba Au Rum (Athens, Greece)
Café La Trova (Miami, Florida, United States of America)
Caretaker’s Cottage (Melbourne, Victoria, Australia)
Hanky Panky (Mexico City, Mexico)
Drink Kong (Rome, Italy)
Coa (Hong Kong)
Mahaniyom Cocktail Bar (Bangkok, Thailand)
Zest (Seoul, South Korea)
Overstory (New York, New York, United States of America)
Salmon Guru (Madrid, Spain)
Maybe Sammy (Sydney, New South Wales, Australia)
Jigger & Pony (Singapore)
BKK Social Club (Bangkok, Thailand)
Line (Athens, Greece)
Tres Monos (Buenos Aires, Argentina)
Himkok (Oslo, Norway)
Alquímico (Cartagena, Colombia)
Tayēr + Elementary (London, England, United Kingdom)
Licorería Limantour (Mexico City, Mexico)
Little Red Door (Paris, France)
Connaught Bar (London, England, United Kingdom)
Paradiso (Barcelona, Spain)
Handshake Speakeasy (Mexico City, Mexico)
Double Chicken Please (New York, New York, United States of America)
Sips (Barcelona, Spain)

2023 Awards

Roku Industry Icon Award: Renato “Tato” Giovannoni
Rémy Martin Legend of the List: The Clumsies; Number 47 (Athens, Greece)
Best Bar in Australasia (sponsored by Naked Malt): Maybe Sammy; Number 15 (Sydney, New South Wales, Australia)
Best Bar in Asia (sponsored by Torres Brandy): BKK Social Club, Number 13 (Bangkok, Thailand)
Best Bar in Europe (sponsored by Perrier): Sips; Number 1 (Barcelona, Spain)
Best Bar in the Middle East and Africa (sponsored by Amaro Lucano): Mimi Kakushi; Number 40 (Dubai, United Arab Emirates)
Best Bar in North America (sponsored by Tia Maria): Double Chicken Please; Number 2 (New York, New York, United States of America)
Best Bar in South America (sponsored by Scrappy’s Bitters): Alquímico; Number 9 (Cartagena, Columbia)
Michter’s Art of Hospitality Award: Tres Monos; Number 11 (Buenos Aires, Argentina)
Best New Opening (sponsored by the London Essence Co.): Line; Number 12 (Athens, Greece)
Disaronno Highest New Entry: Zest; Number 18 (Seoul, South Korea)
Nikka Highest Climber: Himkok; Number 10, climbed 33 positions (Oslo, Norway)
Ketel One Sustainable Bar: Röda Huset; Number 31 (Stockholm, Sweden)
Altos Bartenders’ Bartender: GN Chan; Double Chicken, Please (New York, New York, United States of America)
Siete Misterios Best Cocktail Menu: The American Bar at Gleneagles; Book of Berries menu (Auchterarder, Scotland, United Kingdom)
Campari One to Watch: Lady Bee; Number 52 (Lima, Perú)
Bareksten Best Bar Design: Night Hawk (Singapore)
The Blend Scholarship: Apoorva Kohli (New Delhi, India) will intern at Sips (Number 1) in Barcelona and Alquímico (Number 9) in Cartagena in 2024.

Image: Tres Monos

Closeup shot of the flag of the City of Chicago with Wrigley Building in background

October 16, 2023by David Klemt David Klemt No Comments

Chicago to Phase Out the Tip Credit

Chicago to Phase Out the Tip Credit

by David Klemt

In a move that some are celebrating and others claim will kill jobs, Chicago will phase out the tip credit incrementally by the year 2028.

Currently, pay for tipped workers amounts to 60 percent of the minimum wage. Starting next year, that will change.

Beginning July 1, 2024, tipped workers will earn eight-percent increases on an annual basis. This will continue until July 1, 2028. On that date, tipped workers must receive the full minimum wage.

Put another way, the city of Chicago will eliminate the tip credit entirely midway through 2028. To add clarification, this phasing out of the tax credit applies to all 77 of the city’s neighborhoods.

Overwhelmingly, Chicago’s City Council voted for the so-called “One Fair Wage Ordinance.” Thirty-six alderpeople voted “yea,” while just ten voted “nay.”

As one would expect, not everyone is happy that the ordinance was passed on Friday, October 6. Nor are they pleased that Mayor Brandon Johnson signed off on the bill a week ago today.

Specifically, Alderman Nicholas Sposato referred to the One Fair Wage Ordinance as a “job and business killer.”

Further, as reported by Restaurant Dive last week, the Illinois Restaurant Association opposes the decision to eliminate the tip credit in Chicago.

“We wholeheartedly disagree with the decision to move forward with the elimination of the tip credit,” Restaurant Dive reports a representative of the IRA saying in a statement emailed to the publication.

The National Restaurant Association also opposes the ordinance, reportedly vowing to fight any such legislation that introduced throughout the country.

However, One Fair Wage and the Service Employees International Union are celebrating the plan to phase out the tip credit. However, the SEIU would like the elimination to apply statewide.

A Compromise

Attempting to negotiate for legislation they found more palatable, the IRA had proposed a different approach.

Their version would have seen tipped workers make a minimum of $20.54 per hour. However, that ordinance would only have applied to restaurants that generate $3 million or more in annual revenue. Additionally, the IRA proposed tripling fines related to violations of the proposed ordinance.

Had that proposal been accepted, the pay situation would have been unchanged for tipped workers in smaller operations.

In the end, the IRA agreed to eliminating the tip credit over the course of five years to make the transition smoother for operators. This is due, in part, to the possibility of a two-year phasing out of the tip credit being passed by Chicago’s City Council.

The IRA, NRA, and others who oppose eliminating tip credits point to hardships on the operator side. Increased labor costs will lead to increases in menu prices, reductions in traffic and hours, the elimination of jobs, and, ultimately, the shuttering of many businesses.

However, those who support such ordinance point to the financial stability of vulnerable people, and those who work throughout the industry to earn a living wage.

The Future

While Chicago is the largest city in America to vote to eliminate the tip credit, it’s not the first pass such legislation.

The city joins Alaska, California, Minnesota, Montana, Nevada, and Oregon in doing so. Additionally, Washington, DC, will eliminate the tip credit fully by July 1, 2027. Phase one of DC’s tip credit elimination started May 1 of this year.

Of course, the news out of Chicago also comes on the heels of the FAST Act fight ending in California.

These developments beg the question: Which city or state will introduce legislation next, and how will it play out for workers and operators?

Image: Trace Hudson via Pexels

Poolside seating at luxury resort hotel in Cabo San Lucas

September 22, 2021by David Klemt David Klemt No Comments

Can Luxury be Accessible?

Can Luxury be Accessible?

by David Klemt

Can everyone experience luxury or is this category of hospitality inherently exclusive, serving only a small percentage of consumers?

During a panel discussion titled “Brand Identity: The Evolution of Luxury in Lifestyle Hotels” at Hospitality Design Expo 2021, one speaker answered this question.

Moreover, this speaker’s answer was simple and definitive.

What is Luxury?

Blame luxury brand marketing but it seems many people define luxury through the Three Es: exclusive, extravagant, and expensive.

However, as people reflect and rethink their priorities, a new view of luxury appears to be emerging.

Lee Shuman, director of project management at Peachtree Hotel Group, defines luxury through the Three Cs: comfort, convenience and contemplation.

Interestingly, comfort is included in the dictionary definition of luxury as well. (And yes, I know it’s cliché to point to dictionary definitions in articles.)

We’ve been hearing for a few years now that more people, particularly younger Millennials and Gen Zers, favor experiences over material items. Time is more valuable to these consumers than possessions.

Shuman’s Three Cs, then, speak to these consumers:

Obviously, people seek out comfort, particularly when it comes to hotels, resorts, restaurants, and travel.
Convenience reduces friction and removes pain points, allowing guests to spend their valuable time seeking out memorable experiences seamlessly.
When it comes to contemplation, Shuman says this is a design component that provides guests with several opportunities to notice and experience design “moments.” Contemplation also relates directly to experiences.

Operators who embrace and embody the Three Cs will meet guest expectations of luxury.

Can Luxury be Accessible?

Shuman answered this question succinctly: “Luxury has to be accessible.” Not can be accessible, not should be accessible, but luxury must be accessible.

Going further, Shuman said that “everyone in every strata should experience luxury.” There are a couple of ways to interpret this view of luxury.

Looking at this subject through the lens of convenience, one can take Shuman’s opinion on luxury literally. Everyone, regardless of the category or price point of hotel or resort (or restaurant, for that matter), should have access to luxury.

An alternate view that still relates to convenience is that if luxury is too exclusive, too few consumers will have access and the venue won’t be profitable.

Another viewpoint is that luxury needs to be accessible physically. In other words, if it can’t be touched, it’s not luxurious.

Per Shuman, guests don’t want luxury they can see but not touch.

Make it Happen

Shuman likes to see how guests are using a given property. Observing guests in situ provides him with insights that can be used enhance their experiences and improve design.

Hotel and resort guests are, from what Shuman observes, trending younger. Although, he said that could be because operators are aging.

As we’ve been learning, many younger guests are after experiences, comfort and convenience regardless of where they’re staying. Ticking those three boxes will help operators attract these younger guests.

Of course, older guests, due in part to a reshuffling of priorities during the pandemic, also have an interest in the Three Cs.

Shuman is also seeing that hotels and resorts must be enjoyable to use. Interestingly, he’s observing pools falling out of favor while the demand for well-designed health centers. His commitment to observing and learning about guests constantly provides these insights.

To make luxury accessible moving forward, operators should embrace the Three Cs, observe their guests continuously, and realize that luxury doesn’t necessitate excluding guests.

As consumer desires and expectations change, operators must adapt more and more rapidly. Increasingly, change is impacting the perception of luxury.

Yes, the Three Es still exist and likely always will. However, the Three Cs are informing a more modern view of luxury.

Image: GaPeppy1 from Pexels

Lit neon hotel sign with blue and purple background

September 20, 2021by David Klemt David Klemt No Comments

Meeting Expectations Through Hotel Design

Meeting Expectations Through Hotel Design

by David Klemt

During Hospitality Design Expo 2021, the show’s version of a live “Ask Me Anything” addressed meeting and exceeding new guest expectations.

On the design side, firms must meet the needs and visions of clients and brands. In turn, design clients are attempting to best meet their guests’ expectations in the short and long term.

Additionally, agencies are designing for the pandemic-driven new normal. The way guests use hotels and resorts has changed. Hotel and resort operators must adapt, and so must the designers with whom they work.

Gonzalo Bustamante, Executive Vice President, Design and Development, MGM Resorts International

Quick to point out that he comes from the design world rather than the hotel world, Bustamante is proud of how fast MGM embraced the pivot.

The company adapted to meet the needs of guests while also doing what’s necessary for the bottom line.

Bustamante feels we’re all living and working “in the new version of reality.” Therefore, moving forward, MGM properties will feature design based on the new normal.

When collaborating with designers, Bustamante looks for storytellers who can listen and stay on budget.

Kristen Conry, Senior Vice President, Global Design, US & Canada, Marriott International

What was once a guest desire, says Conry, is now an expectation.

For instance, guests expect hotels and resorts to build and operate sustainably; offer health and wellness features; and provide access to outdoor spaces.

Conry is curious about two specific elements of hotel and resort design.

One, she has an interest in how all-inclusive stays and properties will perform and progress.

Two, Conry wonders if hotel groups shrinking their carbon footprints will encourage guests to make more repeat visits. If a guest is motivated to support a particular brand because of their commitment to “green” operations, the hope is that they won’t cut back on hotel stays to shrink their own footprint.

Conry is encouraged by the increase in conversations designers and their clients are having about utilizing indoor-outdoor and outdoor spaces.

Gary Dollens, Global Head, Design / Product and Brand Development, Hyatt

Leisure travelers are returning to hotels, meaning they’re more important now to the bottom line, per Dollens.

However, there are two other developments that seem to have really caught Dollens’ attention.

One is hotel and resort properties operating with smaller teams. The second is that margins are “better than they’ve ever been.”

If groups can operate with smaller teams without impacting the guest experience negatively, why would they return to working with larger teams? Operators, encouraged by improved margins, are now used to new changes and are unlikely to go back to pre-pandemic operations.

For example, Dollens stated that Hyatt’s current RevPAR (revenue per available room) is up 19 percent compared to 2019. The company also acquired all-inclusive luxury brand Apple Leisure Group for $2.7 billion this year.

Helen Jorgensen, Vice President, Design and Procurement, Host Hotels & Resorts

Jorgensen and Host, like so many companies, adapted to working remotely.

Of course, teams used to gather to discuss design projects. Now, they gather digitally to review virtual room models.

However, it seems she’s eager to return to working in person. After all, while we’ve definitely made leaps and bounds in terms of technology, nothing beats experiencing a hotel room physically. There’s no better way—at the moment—to gauge the guest experience than actually touching and seeing everything in person.

Host and Jorgensen, like MGM and Bustamante, have been moving quickly. She expects Host to complete 16 major property renovations by 2023.

Part of those renovations has to do with room size and amenities. For instance, Jorgensen says suites will account for 19 percent of property rooms. That’s more than double current Host inventory, which is eight percent.

In terms of other design trends, Jorgensen expects sustainability to become more important to more guests. Certainly, that’s related to another trend Jorgensen identifies as crucial moving forward: wellness.

Larry Traxler, Senior Vice President, Global Design, Hilton

All-inclusive experiences are the future for hotels and resorts, per Traxler. Given the increased stress guests are experiencing on a daily basis due in large part to the pandemic, this makes sense.

Guests want to show up and know that everything is handled—eliminating friction is a luxury.

Speaking of which, luxury and lifestyle categories are performing very well for Hilton. However, extended stay is the current category leader for the brand.

When it comes to design challenges, Traxler and Hilton are focusing on a few crucial elements: F&B, outdoor experiences, and air quality.

During this session, Traxler said that F&B must evolve. Destination restaurants on property are performing well for Hilton.

That speaks to another crucial element Traxler mentioned: avoiding cookie-cutter design and experiences. Guests want unique experiences, and that extends to all markets. In fact, many guests want access to more outdoor areas, from balconies and pool areas to lawns and restaurants.

And while it may seem counterintuitive, Traxler says that hotels and resorts can improve property air quality without a “massive outlay” of money. In fact, Traxler says there’s no better time than now to build hotels, with Hilton projecting five-percent growth but achieving seven percent.

Summary

When it comes to hotels, resorts, and design, there are a few key factors operators should focus on now and for the future:

Luxury, extended stay, and all-inclusive categories are performing well.
The leisure traveler is returning.
Food & Beverage offerings must evolve.
The use of outdoor spaces is now integral to design.
Sustainability, health, and wellness are important to a growing percentage of guests. This includes air quality.
Smaller teams may shift from trend to standard operating procedure.
The time to build is now.

Image: Ph B on Unsplash

Canadian Border Services Agency sign on chainlink fence

August 9, 2021by David Klemt David Klemt No Comments

Today’s the Day: Canada Opens Border

Today’s the Day: Canada Opens Border

by David Klemt

The big day is here and Canada is opening their border to the USA.

Today, Americans and permanent residents can enter the country for “discretionary,” a.k.a. non-essential, travel.

Of course, the border is only open to travelers who can prove their vaccination status (full series).

Quarantine Lifted

As many Canadians are well aware, quarantining was mandatory for people traveling into Canada up until today.

Asymptomatic travelers, with very specific exemptions, were required to quarantine for 14 days upon arrival. The mandatory quarantine included a three-night stay at a hotel authorized by the Canadian government.

Oh, and the traveler had to cover the cost of the mandatory hotel stay.

However, that wasn’t all that was required. Travelers had to create and submit a quarantine plan. Foreign national who failed to submit a plan deemed suitable faced the risk of border agents turning them away.

Of course, the mandatory quarantine dissuaded Canadians from traveling across the border for essential travel. After all, Canadians weren’t exempt from hotel quarantine.

Requirements

Now, Americans or permanent residents residing in America aren’t receiving unfettered access to the border. Indeed, there are requirements that must be met for anyone hoping to cross into Canada from the US.

Per the Government of Canada website, in its entirety for clarity:

“Beginning on August 9^th, 2021 at 12:01 a.m. EDT, fully vaccinated United States (U.S.) citizens and permanent residents will be eligible to enter Canada for discretionary (non-essential) reasons, such as tourism, however these individuals must:

be fully vaccinated: to be considered fully vaccinated, a traveller must have received the full series of a vaccine—or combination of vaccines—accepted by the Government of Canada at least 14 days prior to entering Canada. Currently, those vaccines are manufactured by Pfizer-BioNTech, Moderna, AstraZeneca/COVISHIELD, and Janssen (Johnson & Johnson).
be residing in and travelling from the U.S.;
have a valid pre-arrival COVID-19 molecular test result taken in the U.S. (antigen tests are not accepted);
be asymptomatic;
submit their mandatory information via ArriveCAN, including proof of vaccination in English or French;
be admissible under the Immigration and Refugee Protection Act; and,
take a test on arrival, if required.”

So, if you or someone you know is planning to travel to Canada from America, make sure you follow the requirements precisely.

Operators, Be Ready

So far, news of increasing infection and hospitalization rates aren’t impacting Canada’s decision; the border is open as of today. Neither New York City’s vaccine mandate nor an increasing amount of counties and corporations implementing mask and vaccine mandates are deterring Canada.

Additionally, it doesn’t appear as though the Canadian government plans to implement other travel requirements (so far).

Canadian restaurant, bar, hotel, and entertainment venue operators need to be ready for an influx of guests. This is particularly true for operators in large metropolitan areas and well-known tourist destinations.

Pent-up demand for travel, experiences, reunions, weddings, and just escape should skyrocket with the Canada-US border reopening.

Also, should things go well, operators need to prepare for even more travels next month. While not written in stone, Canada plans to open the country’s borders to other countries on September 7.

Interestingly, this is also excellent news for those waiting to open a restaurant or bar. Plans to reopen borders should prove to be a boon for the Canadian economy. So, now’s the time to move forward.

Canadian operators must be vigilant about monitoring the border situation. Fresh opportunities arrive on your doorstep starting today.

Image: Hermes Rivera on Unsplash

July 14, 2021by David Klemt David Klemt No Comments

Hospitality Labor Shortage not Improving

Hospitality Labor Shortage not Improving

by David Klemt

Surveys and data focusing on the restaurant and hotel employment situation paint a stark picture.

The sobering reality is that operators can’t simply point to the pandemic as the reason they’re failing to fill available positions.

Instead, we need to focus on the problems hospitality workers continue to face.

It’s not going to be easy. However, it can lead to positive change. That change can help the hospitality industry recover and thrive long into the future.

Culture is Crucial

Per several sources, millions of hospitality professionals are washing their hands of the industry.

Unfortunately, foodservice and lodging workers are citing several reasons for the exodus:

Lack of livable wages.
Inconsistent wages.
Stress levels not worth level of monetary compensation.
Lack of benefits.
Lack of mentoring and/or career progress.
Industry volatility, particularly devastating as a result of the pandemic.
Unhealthy lifestyle: Long shifts, late nights, and alcohol and drug abuse.
Cultures of harassment and discrimination.

Obviously, it’s easier to blame labor shortages on the workers. Well, being easier doesn’t make it true.

Industry and workplace culture matters. Employee turnover rates were high long before the pandemic ravaged the planet.

Rather than make excuses, operators need to look at their restaurant, bar or hotel’s culture.

Barking orders and feeling infallible isn’t leadership. Admitting failures and shortcomings—and learning from them and implementing positive changes—is how successful operators lead.

Generic Job Listings

Last week, KRG Hospitality president Doug Radkey asked a simple but poignant question on LinkedIn: Are your job listings just like everybody else’s?

He suggests knocking it off with the old standards:

“Are you friendly, energetic, and highly motivated?”
“Are you an experienced and enthusiastic [insert position]?”
“The ideal candidate must work well in a fast-paced environment and be a team player.”
List of basic job tasks.

What’s appealing about such basic, generic ads? Why would rock star talent be moved to work for operators who post these types of ads?

Instead, Doug suggests the following:

Hire for values, not experience. Training can address systems and standards, not personality and drive.
Operators should be transparent about their core values, company culture, and potential for growth.
Showcase the approach to inclusivity, diversity, acceptance, and flexibility. That is, if that’s authentic. If not, that’s a flashing, neon red flag that requires addressing.
Offer a living wage, benefits, potential for personal growth, and education.
Produce a video of team members sharing why they work at the company. This must be genuine and honest.

A unique approach to ads, hiring and onboarding can lead to an increase in employee retention.

Yes, it’s more comfortable to avoid looking internally for the roots of problems. It’s more comfortable to avoid blame. And it’s more comfortable to point fingers anywhere but at ourselves.

That’s not leadership. And it certainly won’t improve any operator’s situation, nor will it improve the hospitality industry and its opportunity to thrive.

Image: One Shot from Pexels