Ten years after opening the first CitizenM hotel in Amsterdam, the founders of the style-driven budget-conscious micro-hotel brand remain adamant that hospitality is in need of more innovation, better technology, and insights from outside the industry.
“In our industry, we paint a wall gray and we’re so excited — we think we’ve innovated and we haven’t done shit,” Michael Levie, co-founder and chief operating officer of CitizenM told Skift.
“I think that our industry still has a lot of growing to do, and what has happened is that, because of the lack of sophistication in technology … we’re in a position where these are essentially retail stores — nothing more, nothing less,” Levie explained. “We sell guest satisfaction here. What you’ll see in our industry, and what’s happening now, is we’re bringing in people from the outside [to help us innovate.]”
Levie, together with CitizenM chief marketing officer Robin Chadha, was showcasing the brand’s latest hotel, the newly opened CitizenM New York Bowery Hotel in the heart of New York City’s Lower East Side neighborhood.
While there, Skift spoke to both about their thoughts on automation in hospitality, distribution, and branding. Here are some takeaways from our conversation with them.
Automation’s Role in Hospitality
When asked about the role of automation in hospitality, Levie said that CitizenM employs it in such a way as to make sure that whatever staff are on site can devote all of their attention to helping guests.
According to Levie, there are three facets to the role technology plays in the hospitality industry: the traveler’s own “digital journey,” distribution, and “building systems” or property management systems, and point of sales, systems, etc.
To address these three different areas of hotel technology, Levie said that CitizenM decided to introduce its own “middle-ware” or device “that basically just transfers data” but at the “micro-detail” level to enhance the opportunity for a more personalized guest experience. That device is a platform called Ireckonu, a company for which Levie and CitizenM’s chief information officer sit on the advisory board.
“The moment you check out, I want to see what channels have you watched, what’s the temperature setting, what is your theme lighting,” Levie explained. “So, when you check in next time, I just pick a room that is the closest to the temperature [you like] so when you walk in, it’s comfortable. For me, it’s good for my ecosystem, right? I pay a little bit less and the setting is there that you left.”
“What we have done,” he continued, “was make it functional so that the data lives in our systems and the microdata travels and we can capture it. And we export it to a sales force so we can have good CRM [customer relationship management] and we have dashboards that allow us to monitor it. So, we can see everything functional in the room back in central, and the staff here only focuses on guest satisfaction.”
The Budget Airline Distribution Model
Levie said that when it comes to distribution, CitizenM takes a “budget airline” approach with best available rates only. And aiding the brand in its distribution is the fact that every single room is the same, and measures approximately 165 square feet in size.
“Our entire inventory is sold in mind with what we can achieve for the day of booking,” he explained. “So, whether you come through the GDS or through an OTA [online travel agency] to our own site, you get the same services. It’s a channel-independent type of service and we have a funnel and, in the end, what is important for us, what we look at is the gross rate for a room, what do we need to pay for the distribution, and what is the net rate of anything that we keep up.”
Being channel independent means that guests “decide what is most convenient to them,” Levie added, and one channel CitizenM is adding to its distribution strategy at the moment is Airbnb.
“It’s early stages and there’s no volume behind it, and I think it’s more gadgetry right now and trying it out,” Levie said. “People will book where it is the most convenient for them, so for us, we see Airbnb as just another channel.”
Unlike the budget airlines, however, CitizenM isn’t necessarily interested in upselling.
“I always joke that if you fly Ryanair in Europe and you need to go to the bathroom and you didn’t pre-buy it on your app, then you’re in big doo-doo in more ways than one,” Levie joked.
Making sure that everything is included, from fast Wi-Fi to free movies and more is what constitutes the brand’s concept of “affordable luxury,” said Chadha. “We’re over delivering and then you’re surprised by how cheap the price is, rather than starting at a cheap price and then charging you for everything on top.”
On Dealing with Increasing Consolidation and Standing Out
“On the Internet, everybody’s the same, right?” Levie asked. “We sell a night of sleep just like everybody else, OK? But the minute you lift up the hood, everything is different. The efficiency of space use in our construction and the method of construction [which is modular], the efficiency of how we run a select-service hotel so that it appears as a full-service hotel—those efficiencies together, make us different and keep us competitive.”
Ultimately, Chadha said, CitizenM’s “ambition is to become a lifestyle brand.”
Later, he noted, “We want to be the brand of choice for this cost-conscious traveler so we offer value.”