Unlocking Affordable Hotel Stays in Expensive Markets

August 8, 2018


In recent years, the global hospitality industry has done its part to confirm the adage that necessity is the mother of invention. Shifting tides of taste and technology have re-shaped what people want and expect from a hotel stay.


In some cases, this means creatively paring down aspects of the guest experience (as much as back-of-house operations) in order to lower the price point. More hotel developers are seizing an opportunity to make the world's most desirable urban markets more accessible.


One of the very best examples is, of course, the sprawling metropolis of Tokyo. Seen from up high, it's one of the most impressive urban jungles in the world. On the street-level, there is no end to the discoveries that can be made. Unfortunately, many travelers who see their way to land of the rising sun can hardly afford to stay in the capital for long. A reservation in one of the centrally-located high-rise properties can have a devastating effect on moderate travel budgets, while the recent crop of designer hostels - although clever and appropriate for certain demographics - aren't for everybody.


Where is the middle ground? I recently discussed Ian Schrager's Public Hotel NYC, which offers USD $200 rooms in lower Manhattan while aiming to deliver luxury. The idea is to cast off outdated elements of the hotel experience, narrow the focus to what matters today, and make the entire operation more accessible in the process.


But if New York City is ripe for a sophisticated nod to the budget-conscious, Tokyo hangs even lower on the branch. Huge numbers of people would spend more time and money in the city if only a comfortable room could be secured for a reasonable price. Andrew Sessa of Conde Nast Traveler writes, "It's a huge oversight for a country whose tourism has grown an average of 33 percent each year from 2010 through 2015, and is about to host the 2020 Olympics."


Among the first to correct this oversight is Hoshino Resorts, an established brand with a reputation for luxury. The company's newest offshoot, OMO, is a departure from the lavish properties under its umbrella, including the Hoshinoya Tokyo.


Rooms at OMO are described as "compact, yet user-friendly and full of entertaining features." At a glance, this may seem like a polite way to describe a Japanese capsule hotel - but look closer and you'll be surprised. The fresh, modern, private living spaces appear to offer a lot of comfort for the price - which, by the way, is less than AUD $200 per night.


The service aspects of OMO are also noteworthy. Japan's capital is known for being rather opaque to the uninitiated - especially without knowledge of the language. The uniqueness in Hoshino's OMO brand is that it proactively seeks to help guests make sense of their surroundings, and to avail themselves of the city's hidden gems (e.g. local temples or little-known whiskey bars). The staff members responsible for delivering on this front are known as OMO Rangers.


As the brand expands into other cities (and, presumably, other areas of Tokyo), certain amenities will be present at some locations and not others. The first Tokyo location, currently open for reservations, features a spacious "lobby lounge" and café. Other locations will offer rooms only - but they will all have OMO Rangers to augment the guest experience.


Each year, a fresh crop of statistics show just how fast the travel industry is growing. We don't need to repeat those numbers every single week - but we know that a small percentage of those travelers would throw $700 at a bed for one night. The hotel industry's next big disruption - unlocking comfortable and affordable stays in the world's most desirable urban landscapes - may one of the biggest yet. The front runners for this will surely reap the benefits.


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