Skift Forum Europe: Ennismore CEO Sharan Pasricha on Reimagining Hospitality

Sharan Pasricha didn’t necessarily know he would become a hotelier. The CEO of London-based Ennismore got into the hospitality business by chance, after a failed attempt to purchase Soho House in 2006. It was then that he bought his first hotel in London’s Shoreditch neighborhood. Today, his company has a portfolio of eight hotels, seven under the flagship Hoxton brand, with two more Hoxtons on the way, as well as the launch of a new co-working brand later this year.

Since that first hotel purchase, Ennismore’s Hoxton brand has come to epitomize a new breed of boutique hotels that are highly design driven yet accessible — both in terms of price point and the crowds they attract.

The Hoxton brand operates on a somewhat elevated select-service model, if you will, placing heavy emphasis and investment on the amenities and features that bring guests the most return on investment, like complimentary continental breakfast delivered to their doors or Instagram-ready lobbies filled with dining and beverage outlets helmed by local chefs. It’s all part of the brand’s effort to reimagine the boutique and lifestyle hotel experience.

Skift recently sat down with Pasricha in the lobby of one of his newest hotels, the Hoxton Williamsburg, which opened last year in Brooklyn, New York.

Pasricha will speak on April 30 at Skift Forum Europe in London about that very topic — reimagining hospitality — and what’s next for the industry. Here’s a preview of what you might expect to hear from him there.

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Skift Editor’s Note: Please note this interview has been edited for clarity and length.

Skift: What’s needed to reimagine hospitality and how did you go about that with Hoxton?

Sharan Pasricha: So I guess it’s a couple of things. The first is consumers’ and guests’ habits are fundamentally changing. Where you stay today says a lot more about who you are as an individual than where you stayed 10 years ago. So people are a lot more socially aware of the place they’re staying in and as a result, are very selective about the choices they make when they’re staying.

The second thing is that there’s no doubt that there’s a huge rise of experiential travel. People are tired of functional travel, and they want to ensure that when they go and visit places, whether it’s staying in an Airbnb or going to a key city or going to a new island, it reflects the place they’re going and staying in. And I think we’ve seen a huge shift where hotels are being a lot more reflective of the environments and the local communities and the neighborhoods that they’re in.

This is certainly new to a lot of brands but integral to what we do as a Hoxton. Community and making sure that we are the gateway to the neighborhood is an essential part of every one of our hotels. And as a result, every hotel we build looks completely different but — we’d like to think — feels exactly the same.

And we spend an awful amount of time, frankly years in advance, before moving into some of these neighborhoods, to really get to know the local communities. Whether it’s through our Hox Friends program where we’re inviting hundreds of people from the local neighborhood to be part of selecting what goes in the bedroom, to naming the cocktails, to helping with food tastings, to being selected to preview the menu, to being part of our opening week, just makes them feel part of the experience and part of our journey, which has been quite exciting.

Relatedly, we’ve seen how the workplace has changed and how hotel travel has changed and how hostels have changed. There’ll be a convergence, in my view, of the living space, the work space, and the hotel space. And I think you’ve already seen that with some interesting concepts that have come into the market.

And you know, this is our year where we’re launching a co-working business. Frankly, we’ve been in the co-working business for 10 years. We just haven’t charged anyone for it.

The lobby of the Hoxton Williamsburg, where Skift recently interviewed Ennismore CEO Sharan Pasricha. Source: Ennismore

Skift: Tell us more about the co-working brand you plan to launch this year.

Pasricha: We’ve got two projects, one in Chicago and one in London, where we’ve got offices that are part of a hotel.

Our lobbies have been this hub where people meet: They work, they’re interviewing, they’re working from it, and actually, we’ve embraced it. We enjoy it. It’s a big part of our hotel and our public spaces.

And we thought, well, how amazing would it be to kind of provide the next level of an experience to somebody who spends three hours in our lobby, who wants to get on a call or get on a conference call, have a meeting space?

So we’ve created about 1,000 desks between Chicago and London for about 2,500 members, and really it’s an extension of our lobby and super residentially inspired.

Community is at the heart of everything we do. But, we’ve got multiple bars, multiple kitchens, hundreds of bedrooms, and our opportunity is to align the workplace and the hotel and our community in one.

It’s kind of fun to imagine members of our co-working spaces who are working to meet a deadline and pulling all-nighters. Guess what? Now they’ve got a bed to actually sleep in. They don’t have to curl up under their desk to sleep right?

So, we’re finding lots of ways to link in our amazing restaurant and bar programing, our culture programing and our bedroom programing, with our co-working spaces, and it is integral to our proposition.

Skift: Would Ennismore ever consider getting into homesharing?

Pasricha: Homesharing is still frowned upon and/or illegal in a lot of cities around the world for a certain number of days, so we’re still scratching our heads thinking about how you could create an economically viable product in some of these interesting cities.

For us, we’re more akin to Airbnb anyways. Because, people stay in Airbnb because they want to experience a local neighborhood through the eyes of somebody who lives there. And actually, people who come and stay with us do exactly the same.

I think homesharing is evolving and changing. I think you’ll have a lot of the homesharing companies now building towers or residential towers, where they’re now creating these co-living consolidated blocks which are becoming a bit of a trend. And it’s required, too, in some cities, because you know, homesharing is not allowed or it’s not permitted, or it’s taxed highly and it’s difficult to get around.

I think our product is already very complementary to the world of people living together who want to see a city through a local lens. I think there is an opportunity in the not-so-distant future to think of a product where you have a slightly extended stay product, where you know, people stay for longer. And I think with this convergence of hotel, co-living, co-working — I think there’s a universe of the future that integrates all of them. And there’s some really interesting brands out there that are doing some interesting things in that space.

Skift: Any brands that stand out?

Pasricha: I think there [are] different brands that do very different things. You know, we love what Airbnb [does], bizarrely, even though we’re a hotel group, which is not what many hoteliers would say but, I admire what they’ve done. They’ve disrupted the industry per se.

But we are more akin to Airbnb than we are with traditional hotels because the guests that come and explore and stay with us want that experiential experience, rather than a very functional product and function.

Now there’s always going to be a role for functional hotels in this world. I mean, of global hotel stock, there’s only 2 percent of the global hotel stock that is boutique or lifestyle. But it’s 10 percent of the global inventory of future hotels that will be in this space. So it’s not a trend anymore. It’s here to stay. People want to have these unique experiences.

But our rendition or our version of that experience is a lot different from a lot of our competitors. You know, we own the real estate and real estate is such a big part of our experience, and therefore we’ve got to know our neighbors and we’ve got to know our community — and we spend a lot of time and money, frankly, getting to know them and immersing that experience into the overall guest journey.

A bedroom at the Hoxton Portland. Source: Ennismore

Skift: Has it been more challenging to achieve scale when you have that approach to real estate?

Pasricha: Yes, I think so. We just started our journey of growing asset light. We know we’ve been approached by a lot of hotel owners or private equity firms who could manage their assets on their behalf, which we’ve started to do now going forward. It is a real shift in our journey thus far. But you know, like most businesses, you need scale, and these are expensive assets to build and they take a hell of a lot of time.

I mean, this is five years you know; Hoxton Williamsburg was five years of my life I probably won’t get back. But you know, I am immensely proud of what we managed to create and the impact we’ve had on the local neighborhood.

But if we want to scale quicker and faster, we’re going to have to partner with like-minded investors or like-minded hotel owners, as long as they understand what makes the Hoxton unique and different, you know there’s a lot of synergy there, so we’ve started to do just that.

Skift: Do you worry that might dilute the experience or the brand in any way?

Pasricha: With scale comes, at times, compromise, and as storytellers, which is the heart of our business, you’ve always got to make sure it’s brand first. You know, we’re not led by the stock market or we’re not led by an IRR [internal rate of return] stick that bashes us on the head every single day.

Every decision we make is a brand decision with the guest at the heart of our thought process, so we don’t have to build 15 hotels a year. And as a result, we’re very selective about who we partner with. And more importantly, we’re very selective about the cities and specifically the neighborhoods we get into. So, that process means you’ve got to kiss a lot of frogs. Which we spend a lot of time doing.

Skift: Let’s backtrack to Airbnb. What did you think of Airbnb’s desire to acquire HotelTonight, from your perspective as a hotelier?

Pasricha: I mean, I get it. Brian [Chesky, Airbnb CEO] wants to cover the entire landscape of travel and experiences, and frankly, there’s already a bit of a war between Airbnb and Booking.com and you know, every quarter there [are] announcements of who’s doing what and why.

So, I get it, it makes a lot of sense. I think HotelTonight has been an innovator in what they created, and since then there [have] been brands that [have] definitely sort of been inspired by what they’ve created and gone on to copy it.

I think it’s another piece of ammunition in their artillery to control the whole booking journey. It didn’t come as a surprise per se. I think it’s interesting, and it seems to be in part of Airbnb’s strategy to kind of control that whole experience.

Skift: Do you use either one of those channels as distribution channels?

Pasricha: You know, roughly 80 percent of our business comes direct to us. We have a huge brand, storytelling, [and] digital innovation team that focuses on capturing as much mind share and market share of our guest direct because that’s always the best experience. But yeah, we certainly use a lot of these distribution channels, certainly when we’re opening into new markets.

But you know, they’re always strategic or they’re short-term or they’re project led. Any brand wants to control their own guest journey and guest experience, and I think we’ve been very successful at that, even in some of the newer openings we’ve had where a large proportion of our bookings have come direct. So thankfully, thus far we haven’t had to use them as much as perhaps some of the others have.

I’m pretty sure we would have used HotelTonight. We’re doing something with One:Night with Amar [Lalvani, CEO of Standard International] and his guys, which is sort of a rendition of HotelTonight. So you know, the business model makes sense. After a certain point in the day, you’re not going to be able to shift some of the inventory, and therefore that model does that and it works and I’m sure we have used that.

Skift: What about Airbnb?

Pasricha: I couldn’t tell you. I’m pretty sure we’ve discussed it internally. I don’t know if we’ve actually got rooms on them.

Even if we have, it’s been something to test and try. I’m not sure if it’s in any way part of our strategy.

The entrance to the Hoxton Paris. Source: Ennismore

Skift: What are your thoughts about Amazon and Google and their entry into the hotel or travel businesses? What are your thoughts on those two tech giants getting deeper into the hotel business?

Pasricha: There’s no question Google could disrupt the industry over night. And it’s a bit of dichotomy because, on the one hand, Booking.com pays them billions of dollars of years in advertising. On the other hand, they could flick a switch and do what Booking.com [does], and they’re already starting to do that.

I guess somebody at Google’s scratching their head thinking about you know, is this a market they want to get into and do they want to capture entire mind/market shares? The truth is, it’s not just travel; they could disrupt multiple industries that are the biggest revenue generators for them as advertisers at some point, and the guys at Google need to think about you know, do they want a client where advertising revenue is their biggest income generator or do they want to try and do it themselves as a disruptor and own that piece of the market?

Travel is so huge and such a big part of the ecosystem. I could see why they’re making strides into the world of travel, and I get it and it makes sense. But the dichotomy they’re going to have to face is all of a sudden Booking and Expedia and all these guys who spend billions on them in advertising, that tap is going to dry up pretty quickly. So, I have no doubt that some interesting conversations [are] happening in the boards of Expedia, Booking, and Google as Google gets closer to eating Expedia’s lunch and Booking’s lunch and vice versa. So watch this space and we’ll see how it plays out.

Amazon’s really interesting, right? I’ve been a huge fan of Jeff [Bezos, CEO of Amazon] and what he’s managed to do by using innovation and scale. I think very few companies have managed to disrupt multiple industries and drive innovation at that scale, and he’s really pioneered it.

I think voice is very interesting, if you think about it. I mean, I’m a huge data geek. I get really excited about data, and I get particularly excited about voice. I imagine a world in the not-so-distant future where I’ll come to my office and I’ll speak to this little gadget that’s on my desk and I’ll say, “Gadget tell me about pickup last night.” Or, “Gadget tell me about our P&L” or “Gadget, how are we tracking against forecast” or “What’s our business in the books?”

And I think that’s not a trend, but that’s going to come very, very quickly. So I think voice is going to be a larger share of people’s daily lives. You’ve already seen that with Google System and Siri and what have you.

But I think using voice, both from a customer perspective and from a business perspective, is only going to increase. I would love to rock up to work and speak to a digital assistant that gives me real-time data. And it’s already starting, both in our business and with our customers frankly.

We set up an innovation lab a year ago. I was inspired by Bezos because, you know, I was listening to an interview of his, and when somebody asked him and said “Jeff you had an amazing quarter, your company’s now a gazillion dollars and you’re a trillionaire,” he said, “Well, what you really mean is we had an amazing quarter three years ago, because frankly I don’t work on any projects that are this quarter. All the projects I’m working on are two, three years out.”

That really inspired me because we’re designing spaces that are three years out, even as we speak. And at the time, we didn’t have too many people in the business looking at [the questions] what is the future of travel or what is the future of the check-in desk? Do you need the check-in desk in the future? How will work spaces change? How will restaurants, bars, and coffee shops change?

We put together a small innovation team, led by a futurist. Somebody who focuses purely on trend forecasting, what’s happening in the future, [a] creative director, and an insights director. And that small team of ours, all they do is work on projects two to three years in advance.

And with part of the work that they’re doing, voice is a big part of it. We’re really starting to think about how we can integrate voice in guest experience. Of course, there’s the paranoia of having a digital assistant there listening to everything we’re doing and what that means. And there’s not a day that goes by that there’s not some article about one of the big social media giants having issues with safety and security. So people are worried about it.

I don’t know at what point that bridge will be kind of connected, where people are comfortable to have a digital listening device in their room and feel comforted about their ability to capture data safely. So we’ll see.

Skift: What else is the innovation lab working on at the moment?

Pasricha: We’re spending a lot of time on technology generally. I’m spending 30 percent of my time as a CEO on technology. I think the hotel industry suffers from being sandwiched between a lot of archaic systems — legacy systems and technologies that frankly, at times, look like MS-DOS from the 1980s.

And you know, we’re in the guest servicing business, but we don’t know anything about our guests, frankly. We know nothing about our guests. And yet we’re in the guest-knowing business. Sometimes I’m amazed that our hotels run at 90 percent occupancy without us really knowing about our guests’ habits and preferences, and our guests gladly share information with us provided we do something about it in a positive way.

Of course, there’s GDPR [General Data Protection Regulation] across Europe and different rules and laws in the U.S., but to try and really provide a true single customer view of your guests’ preferences and habits, doesn’t exist in the way that I would like.

We’re spending a lot of time investing in technology. Five years ago, we were hiring graphic designers and interior designers and digital designers in our business. Today, I’m hiring software engineers. And these engineers are busy knitting together some of the systems that we have, to provide a true single customer view. But they’re also innovating and disrupting to think through how we can use the power of AI [artificial intelligence] and Big Data and analytics to help provide a seamless and amazing guest journey.

I think we provide an amazing guest experience in some of the most exciting neighborhoods with design and storytelling and amazing restaurants and bars, in some of the most exciting cities in the world. To amplify what we already do well, using technology is going to be an essential part of our future.

Come See Sharan Pasricha Speak at Skift Forum Europe