True to its reputation for doing things a bit differently, The Standard hotels group is embarking on a new endeavor not often attempted by hoteliers: it’s launching its own online distribution platform, just for independent hotels.
Following the success of its own same-day app, One Night Standard, which debuted in April 2015, parent company Standard International is today launching the One Night app, available on the iOS App Store and Google Play.
With One Night, guests can make last-minute hotel bookings at The Standard Hotels in New York and Los Angeles as well as other independent hoteliers that include the Gramercy Park Hotel, Nomad, Refinery Hotel, Palihotel, Petit Ermitage, and Viceroy Santa Monica, among others. Not including the Standard’s own hotels, there are at least 16 founding hotel partners.
The app is similar to HotelTonight in concept, although One Night’s same-day booking window (3pm to 5am) is longer than HotelTonight’s (same-day booking is available through 2am), and HotelTonight also lets you book up to seven days out whereas One Night does not.
Amar Lalvani, CEO and managing partner of Standard International, said the idea to incorporate other hotels was motivated by a desire to help other independents increase their business. Since One Night Standard’s app debut, the company has seen an increase of 4 percent in revenue per available room (RevPAR) and an average bump of $52 in ancillary revenue per room. Of the bookings made via the app, 70 percent were from new guests who’d never stayed at The Standard Hotels before.
He also said that data demonstrated how last-minute bookings could actually increase revenues, instead of cannibalizing them, especially because so many locals (65 percent) were using the app. “We’re not just stealing market share or discounting rooms,” said Lalvani. “We’re actually increasing the size of the pie.”
“This is certainly an innovation for hotels that do not share a common brand or common ownership to cooperate this way,” said Bjorn Hanson, clinical professor with the NYU Preston Robert Tisch Center for Hospitality and Tourism. “I think it’s a good thing — not a bad thing — but it is unusual. The hotel industry has a history of viewing other hotels as competition, even if they may not physically be near each other.”
Strength in Numbers
Lalvani said that while the success of One Night Standard had been established, it was clear that opening this up to other hotels would simply be a good business move, especially since there are only five Standard properties and five sister hotels via the Bunkhouse Group.
“I’m not naïve to think that 100-percent of your room nights are going to be spent at The Standard,” said Lalvani. “We’re going to be the best we can be, but we recognize that you’re a customer who likes different things. We would rather show you hotels that we like, that we’re proud of, and that we can consider partners. It’s a different way of thinking; it’s more collaborative in nature, and it’s also just the reality of how people live and how they travel. I might as well give them options of places that we like and profit from them as well.”
The app would gives other independents more leverage in shifting their market share away from OTAs like Expedia, Booking.com, and Priceline, and to do so in a way that emphasized the hotels themselves as opposed to their nightly rates. “I don’t want to state it too extremely but, perhaps, the only people [hoteliers] like less than a competitor may be the OTAs (online travel agencies), you know what I mean?,” Lalvani explained.
There is no cost for partner hotels to join the app, and the order in which they appear on the app is always random, without prices being emphasized (you can swipe to see the nightly rate). Standard International makes an unspecified commission from each booking made, at a rate that’s lower than most OTAs, Lalvani said. It also has say in who can join the app, ensuring the list of participating hotels is carefully curated.
“This [app] makes perfect sense,” said Hanson. “The commission rate that independent hotels pay for OTAs or third-party distribution channels are often higher percentages, and they often tend to see a higher percentage of their reservations booked through those channels, so to have an alternative like this can have a significant financial benefit.”
“With any third-party distribution channel, there’s always a sense of hesitation,” said Daniel Entenberg, general manager of the Gramercy Park Hotel, which is a founding hotel partner on One Night. “How will my property hotel be presented or portrayed by on someone else’s third-party site or booking engine? You’re always skeptical with how you mix your property among others.”
However, Entenberg added, because of the caliber of hotels being included on the app, he was convinced that being part of One Night would be an opportunity for him to grow both his hotels’ hotel’s occupancy and rates.
“You want to ensure your hotel is aligned with similar properties that look to deliver a comparable guest experience or align with what you deliver as well,” he said. “When we heard about properties that hotels like The Carlyle and our sister property, 11 Howard, and all these other great, other established marquee properties hotels here in the city already signed on, we thought it would be a great connection for us to have.”
“To the extent that the participating hotels share special appeal because of the positioning they’ve created for themselves as some of the more renowned, unique, and successful independent hotels, they can share, almost, a halo effect together,” Hanson noted. “So to increase the size of the pie this way makes perfect sense.”
An entirely separate company, One Night, which is owned by Standard International, will run the One Night app, and all partner hotels have direct access to their respective guest data — something that is not usually provided to hotels when their guests book on an OTA (unless they’re Red Lion).
“We’re never going to use it [the guest data] and we’re going to give it to you,” said Lalvani. “That’s actually a big difference. We stand up to our word and we have a contractual relationship with these hotels. We tell them, ‘We’re not doing this for the purpose of getting your data. We have enough data.’ We’re contractually bound. We’re making sure that’s in there.”
Entenberg confirmed that, saying his hotel has a signed confidentiality agreement with Standard International.
Jimmy Suh, chief revenue officer for Standard International, added, “We will be passing along the guest contact details [to the participating hotels] so that they, in turn, in the future, can market directly to them [guests] as well, all within the delivery of confirmation details to the hotel. One of our founding principles for the app was to be a good hotel partner.”
Inside the One Night App
The One Night app is somewhat similar in design to One Night Standard, but it’s got a few more bells and whistles and it adopts a classic black-and-white design scheme instead of The Standard’s signature red. Using the app itself is also fairly intuitive and designed to be on demand, as we saw during a demonstration.
Two of the standout features of the app, as noted by Gramercy Park Hotel’s Entenberg, relate to its design and its hour-by-hour destination guide, tailored for each hotel.
“For a property like ours that is very much aesthetically driven from the design side of things, it’s my belief that One Night has a beautiful design that complements our hotel’s brand aesthetic, our unique culture, and our ability to deliver a guest experience in a way that differentiates us for our customers,” he said. “All of that is translated through the One Night experience.”
All nightly rates posted on the app are a best rate guarantee, Lalvani said.
To promote the new app, Standard International will first be marketing it via social media, primarily on Instagram and relying on some user-generated content, as well.
As we’ve noted before, the hotel industry hasn’t always had success in launching their own booking platforms. One of the biggest challenges facing Room Key, a booking site created by Choice, Hilton, Hyatt, InterContinental, Marriott, and Wyndham, has had to do with its lack of marketing and promotional dollars. It’ll be interesting to see if The Standard’s social-media heavy approach to marketing One Night will be able to reach enough of the right users to be successful.
While it is launching first in New York and Los Angeles, One Night will eventually expand to San Francisco, Austin, Miami, Las Vegas, and Chicago in the coming months. Standard Hotels will also remain bookable via the One Night Standard app and the One Night app.
When asked if the app may grow to include functions like messaging, check-in, check-out, concierge services, or to develop into a loyalty program for independent hotels, Lalvani said The Standard would continue to be an “incubator” for new ideas and technologies.
Should One Night eventually into something bigger, NYU’s Hanson said, “That would be more than just an innovation; that would be a transformational approach.”