What is dematerialization?
Dematerialization is the process of converting a physical asset into a digital or electronic form.
Dematerialization in the Hospitality Industry
For centuries, the core of the hotel business has been essentially the same everywhere. Sell rooms, check in the guests, serve breakfast and check them out. But now Online Travel Agencies (OTAs) have taken over the booking element, apps like Deliveroo and Uber Eats offer a myriad of breakfast, lunch and dining options, and Airbnb is challenging even the room portion of the business.
This disruption has forced hoteliers to rethink their value proposition around a simple question:
What services can hotels offer that digital upstarts can’t ?
Unique on-site hotel guest experiences
One answer to this question has been to provide guests with unique on-site experiences. These can exist in many forms, but they should all tie into the hotel concept. Most importantly, they must be hard to replicate, be it by rival hotels or Airbnb-type platforms.
Take French Theory, a new hotel recently opened on Paris’s Left Bank. The hotel showcases its ties with France’s music scene via a number of outlets including in-house LP players and a basement “Audio Lab” featuring a listening room and a recording studio. Guests can book the studio, or just sit back and enjoy as visiting musicians launch an impromptu jam session (later streamed on the hotel’s Spotify channel).
In Kyoto, the BnA Alter Museum has combined hotel and art gallery, adorning all their rooms with works by local artists. The hotel also offers residency programs and art-related events for guests and locals alike.
If an experience is unique (at least locally), matches with the hotel concept, and can be monetized, then it can bring value to a property.
Service quality and operational excellence
The other option is to double down on service quality and operational excellence. It turns out many Airbnb users would happily trade a so-called authentic setting for the comforts of quality bedding and good coffee in the morning. Depending on the hotel location and its target audience, paring back the guest experience to its key components can be a winning strategy.
CitizenM hotel rooms essentially consist of a bed and a shower room, but the quality of both is top-notch. Some hotels invest so much in one particular feature that it becomes a well-known part of the brand, as is the case with Westin’s Heavenly Bed: a bed so successful it is now its own independent brand, available for purchase online. The bottom line here is that not all hotels have to provide dozens of amenities (dog spas, water sommeliers, …). As long as the guest expectations are fulfilled, that can be enough.
Examples of dematerialization of hotel outlets and services
This article is extracted from the Hotel Concept Handbook, developed by Creative Supply in partnership with EHL and has been used to create winning hotel concepts. For hoteliers, it helps to create integrated, compelling concepts that attract the interest of guests and industry professionals alike by linking storytelling to operations or design. The Hotel Concept Framework is taught every year to students at EHL.