By Adam Mogelonsky, Larry Mogelonsky

Renovations are necessary, but so is controlling expenses. This can often lead to value-engineering where every element needs a quantifiable justification towards revenue performance. And yet, hotels don’t quite work that way. Even as data scientists, revenue managers and the like extol their metrics as the be-all and end-all of operational success, true hospitality nevertheless perseveres as an artform. The lobby is one such area where emotions run high and there’s no clear line between capex and profit.

Numerous properties that are already in, or aspire to be in, the hospitality hall of fame have this attitude. One program that we have going at our consultancy is called ‘The Mille Club’ where we apply learning from those hotels around the world that are already charging over a thousand dollars per night (‘mille’ derived from the Italian for a thousand) to help other brands figure out a strategy for growing their rates to this level and beyond. Without exception, every Mille Club member property has an amazing lobby experience, and putting a plan in motion for creating a similarly elevated ambiance at other hotels is a project that we strongly advise all our clients to undertake.

To convince owners regarding the capex required to make a great lobby, we tell them that sometimes you have to spend a little more in order to make a lot more.

Setting the Tone

Everyone has heard or understands at their core that first impressions are everything. You only get one. In hotel parlance, we call this the ‘sense of arrival’ to encapsulate the entire onsite arrival from the exterior drive up to the porte-cochere, the uniforms of the valet team and the manner in which the bellhop assisted with the luggage through to the lobby décor, the artwork, the music billowing out from the adjoining bar and the friendliness of the front desk team during check-in.

Every element here counts, and the best hoteliers sweat over making each detail perfect and wholly congruent with the hotel’s theme in order to elicit a given mood from the visitors, be they travelers with a room upstairs or locals looking to hobnob. The lobby’s appearance, layout, flow, lighting, seating, acoustics and even smell (think fresh flower arrangements or a branded scent) all play a role in setting the tone for a great experience throughout the guest’s stay.

Notably, the word ‘tone’ requires some elaboration in terms of its use borrowed from music. Taken straight from Wikipedia, a musical tone is a steady periodic sound characterized by its duration, pitch, intensity and timbre. What this means for hotels is that the first impression establishes the emotional directionality and elasticity for the remainder of the trip. A great first impression sets the bar high so that the guest is excited and intrigued, while a poor or unremarkable opening encounter puts the guest into an apathetic or defensive mood that is often hard to recover from.

As it relates to the notion of the intangibles within a hotel, a guest who is excited about a vibrant lobby atmosphere is more likely to linger there, more likely to order a cocktail before heading out on the town or more likely to seek out a reservation at the hotel’s onsite restaurant instead of going onto Google to search out the nearest hotspot. The opposite is also true; if the lobby doesn’t have a vibe or doesn’t invite a social scene, then it will be sizably harder to nudge visitors to stick around and spend. We would argue for one scarier step further in that gloomy lobby ultimately discourages guestroom bookings.

A Strong Reason to Visit

What the two of us classify as a hotel’s ‘reason to visit’ goes one step further than the onsite first impression by considering the engagements that a potential customer has before they arrive and what motivates them to book in the first place. Outside of pure price elasticity for pure heads-in-beds operations in the select service and economy segments, what is the core emotional reason for why a guest has selected your property?

While this ‘big why’ will always have the throughline of ‘location, location, location’ for any entity in commercial real estate, hotels are a bit of a unique breed. That reason to visit may indeed be a beach or proximity to the convention center, but there’s typically something more – the je ne sais quoi as the French have so eloquently coined for these seemingly irrational contributors. These intrinsic elements can include but are not limited to a world-class spa, a scenic golf course, a cool pool scene, impeccable guestroom amenities, a Michelin-starred restaurant, curated activities, a fantastical bar, a tony rooftop, a wondrous lobby experience and, yes, old-fashioned guest service.

Within all these components that comprise the overall guest experience, it is difficult to single out the lobby as the key determining factor for why a guest chooses your hotel versus the one across the street or why a guest is willing to pay, for instance, a hundred dollars more per night to have immediate access to your lobby as their temporary homebase. Nevertheless, without that gregarious lobby experience, would that reason to visit be quite as strong?

To circle back to the Mille Club, peruse the literature for any hotel with an ADR north of a grand and you see that the lobby is typically an architectural marvel in its own right used to market the property. Thematically, some go the more classically lavish route with scintillating chandeliers, ornate marble and gilded balustrades, while others go strive more towards nouveau riche with postmodern finishes and artwork that no one really comprehends. Irrespective of the tactics, the emotional gut punch is always the same: this is a ‘bucket list’ property befitting of a luxury lifestyle and a place that will help you self-actualize on a deeper, limbic plane. In short, the splendor of the lobby gives the onsite experience meaning and that meaning warrants astronomical nightly rates.

If you were to try to quantify this relationship, perhaps the place to start is by reading into magazine editorials, travel writer columns and guest reviews. Check to see how often the lobby is referenced as worthwhile or a central component that justifies a hotel’s nightly rate. While you can evaluate this anecdotally by glancing through some editorials, reading some top-ten lists and scrolling through TripAdvisor, nowadays one might deploy an AI-driven sentiment analysis tool to interpret the multitude of hotel reviews on the internet to spit out an answer that basically suggests, “Yes, a lobby’s design has an impact on occupancy, nightly rates, media impressions and ancillary spend.” Prove us wrong.


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