Hospitality Industry
1 min read

Retail and Hospitality convergence

EHL Insights
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Hospitality retail was once little more than a lobby corner shop and some display windows. But in recent years, hotels have started to see the marketing and revenue potential retail presents. When it launched in 2006, the Hoxton Hotel London’s front desk, which doubles as a retail counter, was a pioneer. Since then, brands like 25hours and W Hotels have gone to great lengths to integrate retail into their value proposition.

 

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MUJI hotel room

The rooms at MUJI Hotel Ginza are designed in the brand’s minimalist style, and furnished almost exclusively with Muji products.

An increasing number of new real estate developments are bringing retail and hospitality closer together. It makes sense. Both activities aim to optimise revenue per square meter and offer an immersive customer experience. The lavish reopening of La Samaritaine in Paris by the LVMH group in 2020 features a department store operated by duty-free specialist DFS alongside a Cheval Blanc hotel, thus making full use of the available space. And existing hotels are not waiting on the sidelines: Italy’s iconic Pellicano hotel group partnered with luxury e-tailer MATCHESFASHION in the summer of 2019 to provide a pop-up store aboard a 1930s yacht, servicing the group’s three Italian properties and offering an exciting experience to their guests.

 

“Hotels have started to see the marketing and revenue potential retail presents.”

Hotel maison du monde Nantes

The Maisons du Monde hotel lounge has a distinctively homely vibe, and can serve as a showroom for the brand’s products.

 

Many retail companies have actually ventured into the hotel business in an effort to contextualise their products and engage their customers in a less transactional, more meaningful way. Within the past two decades, fashion and jewellery brands Armani, Fendi and Bulgari have all opened hotels, as have home decor companies Muji and Maisons du Monde. Hoteliers, however, have been slow to do the opposite. Compared to these concepts with strong individual identities, chains like Westin and Hilton are missing an opportunity to assert who they are, and create a full brand universe.

“ Retail companies use hotels to contextualise their offering and engage their customers in a less transactional way.”

As customer expectations towards hotels evolve, the traditional model in which rooms create revenue and facilities serve as support is fading. And whilst hotels will continue to rely on their rooms as their main revenue source, a thoughtful retail strategy can help drive the overall perceived value of a hotel — and offer a welcomed additional revenue stream.

Written by
Written by

Founder of Creative Supply & EHL Alumni

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