Skift Take

Years ago, leisure travelers typically rented cars at the airport. But many now hail rides to hotels instead. That behavior shift gives properties a chance to rent out electric vehicles.

Sometimes a promotional stunt speaks to larger trends that are worth noting. That’s the case with a new offering from Graduate Hotels. This is a story about how creative upselling can help a brand appeal to niche traveler segments. But it’s also about how to take advantage of shifting customer behavior.

Here’s the gimmick: Graduate, a set of 32 university-themed hotels in the U.S. and U.K. —  has begun renting electric FUVs, or “fun utility vehicles,” at its property in Eugene, Oregon.

Guests will be able to reserve one of three FUVs from a tablet at the front desk, said Jason Williams, general manager of the Graduate Eugene. The manufacturer provides and services the vehicle in a revenue share deal. The property sets the rental rate, currently $100 a day or $16 an hour.

Guests can use one to drive to the University of Oregon campus or local restaurants or they can use it for joyrides.

Other hotels may want to incorporate sustainable transportation offerings for their customers, said Mark Frohnmayer, founder and CEO of Arcimoto.

“Consumer behavior has shifted when it comes to how travelers arrive at many hotels,” Frohnmayer said. “A decade ago, almost everyone arriving at a resort in, say, northern San Diego would rent a car at the airport and drive to the property.”

“Today, with the advent of ride-hailing services, many aren’t renting cars at airports,” Frohnmayer said. “So hotel companies at leisure destinations have more of an opportunity now to get into the car rental business, so to speak.”

The motorcycle-class fun utility vehicle is made by Arcimoto, based in Eugene. The vehicles have a panoramic roof and removable doors, giving drivers the sensation of riding a Vespa while having the safety of, say, a Smart ForTwo. In bad weather, the FUVs are sealed up, and their seats are heated.

For hotels, electric vehicles offer a few perks. Staff can charge a vehicles’ lithium-ion batteries through any standard wall outlet. The machines are relatively low-maintenance, given that they don’t need refueling or oil changes, and the manufacturer offers service.

Graduate, owned by real estate developer Adventurous Journeys Capital Partners, is following a broader trend. Many hotel operators and owners are taking a page from the budget airline model by trialing a la carte pricing for services and amenities, as the Wall Street Journal recently reported, and as Skift covered in its 2019 Megatrends.

However, electric vehicles remain a novelty. Arcimoto expects to only make 425 FUVs this year, it said this week in financial filings. But the company is working on getting to mass production in a new facility by the end of next year. It has a goal of making 50,000 vehicles a year.

Due to regulatory and practical servicing reasons, Arcimoto, based in Eugene, Oregon, can only sell the vehicles or offer rentals to travel companies in California, Washington, Florida, and Oregon, where it has licenses and servicing facilities. But it plans to expand sales and rentals to Hawaii, Arizona, and Nevada soon.

“Our property celebrates all things Eugene,” Williams said. “So we’re also just super proud to be partnering with an awesome local brand like Arcimoto.”

Climate Friendly Marketing

Looking ahead, hotels and other travel companies need to keep their eye on the booming electric-vehicle market for replacing golf carts and other business-related vehicles they use on their properties.

Electric vehicles today come in more substantial, utility versions, such as pick-up truck and van models, than they did in the past. They also claim a lower lifetime operating cost and servicing overhead than traditional cars and trucks.

But the potential marketing and branding aspect of using electric vehicles is also notable. Electric cars and trucks have a cachet among some travel buyers.

“A certain segment of customers will increasingly favor brands that look like they’re walking the talk on climate change issues,” Frohnmayer said. “It won’t be cool for some guests if they see a brand is using lots of gas-powered vehicles. It’ll be a differentiator for a brand to be ahead of the curve on EV [electric vehicle] adoption.”

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Tags: experiences, FUV fun utility vehicle, graduate hotels, hotels, technology, upselling

Photo Credit: Shown here is an FUV, a fun utility vehicle that's electric and built by Arcimoto and for use at Graduate Hotels' property in Eugene, Oregon. Arcimoto