Next Wave Of CHEAP ‘CHIC’

By Karyn Strauss, Senior Editor -- HOTELS Magazine, 2/1/2007

25hours Hotels Company is a hot, new chain from Germany offering style without the high price tag. Pictured here, the company’s new Frankfurt hotel.

WORLDWIDE A new infl ux of affordable

design hotels aims to tap into the lucrative Gen X and Gen Y markets.

No longer a new concept, this “cheap chic” segment seems to only

gain momentum. For over the last couple of years HOTELS has reported

on the many new stylish yet budget-conscious offerings from the

UK—EasyHotel, Dakota and Yotel—to Millennium & Copthorne’s M Hotel

in Singapore to Andres Balaz’s Hotel QT in New York. Next came

the big brands with their ambitious plans for Indigo, Cambria

Suites, aloft, Hyatt Place, among others. The latest crop of up-andcoming

alternatives expands the concept even further with properties

distinctly connected to their locales and the latest in entertainment

technology. The good news for the consumer is more choices than

ever before. The challenge going forward for hoteliers no doubt

will be the mounting competition.

While UK concepts may have set

the bar for cheap chic, the idea has

been quietly gaining ground across

continental Europe. As yet most often

one-off properties, such as the Hotel Fox

in Copenhagen, a lifestyle concept by

Volkswagen, or the hotel daniel in Graz,

Austria, where an espresso bar doubles

as reception, a new, German-based

concept called 25hours Hotel Company

is set to create a chain of such affordable

style-driven hotels across Europe, with

a goal of at least 10 properties by 2010,

according to Christoph Hoffman, founder

and managing partner. The core concept

of the company, which opened its fi rst

hotel in Hamburg in 2003 and its second

property in Frankfurt in December, is to

offer trendy, affordable accommodations

that are individually designed to refl ect

their location. “We’re not into cookie

cutter. Each hotel needs to be individual

to its destination,” Hoffman says,

adding, “Our marketing is about their

individuality.”

Up-and-comer CitiStay Hotels aims to offer contemporary design, high-tech amenities and reasonable prices for the Gen X and Y crowd.

With a target audience of “young

urban nomads,” 25hours hotels tap into

the local scene of each property to bring

a little something extra to the table. For

example, the new Frankfurt hotel is

called Goldman 25hours Frankfurt to

leverage its association with well-known

local nightlife owner Ardi Goldman, who

operates a restaurant and bar there. “So

we’re using his name to market it

locally,” Hoffman says, adding that

similar branding plans are underway

with a well-known chef for a new hotel

in Berlin. “Each hotel will have the core

25hours name with a concept name

related to the destination.”

The mission of 25hours properties is

not about meeting a star-rating, rather

the hotels are about answering a lifestyle

trend, Hoffman says. “I believe the

future trend of hotels will be very

different from what we know today. It’s

not about stars; it’s about a way of life

and communing together.” Similar to

trends seen by his U.S. counterparts,

Hoffman cites the growing number of

customers who opt to stay in affordable

hotels and then eat at 3 Michelin-star

restaurants. “There are fewer rules.

Nowadays people are more individual in

their decision-making process.”

The goal is to develop 25hours hotels

in major European cities, but to keep

development costs down, not necessarily

in the most prime neighborhoods.

The company currently is negotiating

for additional hotels in Berlin, Vienna

and Cologne and has set up subsidiaries

to grow the concept in Italy and France.

Generally speaking each hotel will have

up to 120 rooms, often each with its own

décor theme. All hotels will feature a

“living room” lobby concept, marketed

as a cozy gathering place. Additional

features such as restaurants and bars will

be determined by the needs of the particular

market. Rates will average around

€100 and include free Internet access.

Back in the United States, New Yorkbased

CitiStay Hotels LLC is one of the

newest players aiming to offer style- and

budget-conscious travelers alternatives.

“As a young traveler and coming from

the airline industry, I spent a lot of time

going around the country and found that

the hotels didn’t seem to fi t what my

generation wants and expects from a

hotel [in terms of] services, look and

feel,” explains Gregory Tubeck, the company’s

24-year-old founder and president.

“CitiStay was created over coffee. A few

of us sat down and discussed where the

industry was going and what we thought

we could do to change it. So many of the

big hotel companies are spending millions

trying to re-invent themselves and their

respective brands—trying to fl ip a switch

and have a whole different way of doing

business overnight.”

By contrast, Tubeck believes CitiStay

will offer a more authentic approach

to meeting the needs of these travelers.

“We’ve promised to create a brand that’s

honest from the start. We are not some

sub-brand hiding behind a huge

corporate structure.”

To emphasize its “anti-corporate” stance,

Tubeck says the service component—

friendly, accessible—will be a big part of its

modus operandi. From a design standpoint,

think clean lines and modern, functional

spaces with elevated features to save space.

The other major focus is technology. Podstyle

kiosks will be used for check-in, and

the company is building patent-pending

“CitiScreens,” a communication system—or

virtual concierge of sorts—accessed through

the guestrooms’ fl at-screen televisions. The

company will partner with local vendors,

including restaurants, day spas, theaters, car

services and the like, wherein guests can

order take-out, reservations and tickets from

their rooms and have all charges appear on

their folio. CitiScreens also can function as

a mini business center, Tubeck says.

The company also is working on

adding a twist to loyalty programs by

offering frequent guests a permanent

room keycard. They would then be able

to check-in online and through the use of

its electronic lock system, immediately

access their room upon arrival.

The first CitiStay hotel is set to open

in Miami by the fourth quarter of 2007.

Other development deals are pending in

New York, Boston, Washington D.C.,

Las Vegas, San Diego and San Francisco.

All properties will be conversions of

what Tubeck calls “undervalued properties,”

and all will be less than 100 rooms.

The company aims to grow to 12 hotels

in the next fi ve years, retaining full

ownership or by doing joint-venture

deals. And while a bit cryptic on discussing

rates, Tubeck says they will be

“signifi cantly under local market value.”

In other New York “cheap chic”

news, BD Hotels, which owns upmarket

The Chambers and The Mercer hotels,

among others, has opened the 347-room

Pod Hotel, a tech-savvy budget property

where about half the guestrooms have

shared bathrooms. With rates starting at

US$89, the former Pickwick Arms hotel

features iPod docking stations, free WiFi

and personal LCD-screen televisions.