Graduate Hotels has grown to 22 hotels in college towns in six years. Now it intends to face down new competition by branching out to larger urban markets where it can continue to appeal to people involved in universities but also attract other clientele.
Ben Weprin, founder of the boutique Graduate Hotels chain that launched in college towns in 2014, had a specific number of properties he wanted to have waving the brand flag by 2020. That number was 20.
Graduate Hotels has achieved that, even in the midst of growing competition from other boutique brands and even larger hotel conglomerates such as Marriott International and Hilton that realize the value of appealing to a college campus’ captive audience.
The first Graduate Hotel opened in Athens, Georgia near the University of Georgia. Subsequent properties have been introduced in college towns such as Oxford in Mississippi, Lincoln in Nebraska, and Tempe in Arizona. Weprin’s AJ Capital Partners develops Graduate Hotels.
So what’s next for Graduate Hotels? The plan for the independent brand is to graduate to larger cities where they can appeal to not just prospective students, visiting parents, alumni, professors, and patients at on-campus medical facilities.
While the company intends to always situate its hotels near college campuses, Graduate Hotels President David Rochefort said the brand can appeal to a wider audience.
The company is looking at about 100 markets to enter, including Los Angeles and Washington, D.C. It hopes to open more than one hotel in New York City. There are also plans to debut hotels in Cambridge and Oxford in the United Kingdom in 2021.
“Those are global cities, in many ways, in terms of how they attract tourism,” he said. “It still has a university lens in terms of how we are telling the story of local communities. Those are cities that are very different. They are not small towns, college towns where the college is the only thing going on. We’re playing in a lot of the same dynamics as any other hotel would be.”
It’s the only way they can compete with the growing number of companies, big and small, that see college towns as lucrative places to invest in.
“You have three markets: the student market, you’ve got the alumni base. Then you’ve got other markets from the community too,” Bonnie Knutson, professor at the School of Hospitality Business at Michigan State University, said.
Utilitarian Is Out
It used to be that hotels near or on college campuses were nothing more than utilitarian buildings for prospective students, their parents or alumni to store their luggage and sleep while in town to engage in some sort of school activity.
Now, collegiate hotels are joining the Ivy League of hospitality.
Developers are taking a cue from the boutique hotel sector and producing more design-focused properties that offer amenities reflecting the colleges they cater to. Think libraries filled with books by alumni and events such as poetry readings, art exhibits and lectures. They are also curating their food and beverage outlets in a more sophisticated way.
“We’ve got a very experienced traveling, demanding consumer base out there,” Knutson said. “Every hotel in the country is starting to upgrade. They all want the Instagrammable location and property. They’ve got to have Wi-Fi. They’ve got to have food that doesn’t cost a lot. They’ve got to have tech centers. They’ve got to have everything you can want and think of because they’re competing, even though on a smaller market, with your Hiltons, your Marriotts and other big names.”
Study Hotels is another brand that is competing directly with Graduate.
Study has hotels at Yale in New Haven and University City in Philadelphia. The Study at University of Chicago and The Study at Johns Hopkins in Baltimore will open in 2021.
Paul McGowan, president and founder of Hospitality 3 and Study Hotels, said he came up with the idea for the concept while touring hotels with his daughter in 2007.
“I realized very quickly the accommodations on many campuses were less than adequate for anyone who expected a comfortable experience,” he said. “The ability to connect with the university and celebrate the university life was lacking.”
McGowan sees Study hotels as amenities to the colleges. The schools are reflected in the design and amenities. For instance, at the Yale property, McGowan chose the same kind of glass used on the campus’ Gothic buildings. In Philadelphia, he enlisted a local blacksmith and glass blower.
At the Johns Hopkins University property, the Living Room will feature a bookcase with works by authors affiliated with the school as well as museum cases and a variety of artwork.
Each room at all the properties has a leather reading chair to encourage scholarly pursuits, a work desk and large windows with views of the campus.
“It was about creating a place that fed off the campus,” McGowan said. But “we’re not kitschy in any way. We’re not trying to go in and overload the spaces with school memorabilia.”
Rochefort said Graduate is entering into more public-private partnerships with universities. It is working on six so far and is in talks with up to 15 other universities.
“We built our model out. We built our fan base in particular,” he said. “Universities have become more interested in our product. A big part of our future growth is in a lot of these direct partnerships.”
Graduate stands out, he said, because it is the only company that customizes its properties to whichever university it is serving.
Tell that to Ed Small, president of Smart Hotels LLC, which develops and operates campus hotels in close collaboration with the universities.
Sometimes the university owns the hotels. Sometimes Smart Hotels leases property from them with The Olympia Companies managing the hotels.
Smart has developed six hotels, including one at Duke University and its medical center in Durham, North Carolina. It has another six in the pipeline.
“Each project we do, each site is a customized approach,” Small said. “We look at what is the need, the best fit for that campus at that site given the existing concept.”
Even Airbnb and other short-term rentals have become popular options for people near college campuses.
Knutson said even with all the competition, Graduate, in particular, continues to have a solid business strategy that will make it resilient.
“They were really strategic at picking Division 1 schools that have a large student body, a lot of relatives and friends,” she said. “And they have amenities to offer not just to students but to the community. There are other things besides the association with the college that can build a good revenue and following.”
What Does the Future of Lodging Look Like?
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Photo credit: Shown here is the lobby at the Graduate Berkeley in California. Graduate Hotels has grown to 22 hotels near college campuses in six years. It plans to continue its expansion, especially in key urban centers such as Los Angeles and Washington, D.C. Graduate Hotels