A short history of Hotels - be my guest
Dec 21st 2013 | BANGKOK | From the print edition of the Economist
THE lobby of the Mandarin Oriental in Bangkok, regarded as one of the world’s finest hotels, smells of orchid blossom and money. In the late 19th century it was the only big hotel in Thailand. Malarial imperialists braved high seas and battled jungles to reach this outpost of modernity, with its electricity, billiards and baths. By the time a ship’s officer called Joseph Conrad got to the bar he could croak only “of wrecks, of short rations and of heroism”. The Oriental has since added a multitude of facilities including a spa and nine restaurants, but its function as an oasis for the privileged has not changed.
The rest of Bangkok has. Nip through the garden to the banks of the Chao Phraya river and skyscrapers loom all around. Hop into a long-tail boat powered by a jerry-rigged car engine and you roar past towers clad with logos of international hotels: Hilton, Peninsula, Shangri-La. Two miles north-east, Bangkok’s racecourse is besieged by yet more hotel brands: Conrad, Crowne Plaza, Four Seasons, Holiday Inn, Hyatt, InterContinental, Kempinski, Marriott and more.
Bangkok is not alone. Aside from a few isolated spots, the world has been conquered by hotel chains. Today branded chains operate 7.5m rooms, according to STR Global, an analysis firm. About half of these are posh (“luxury” or “upscale” in industry parlance). Every night a population the size of a small country sleeps beneath a few corporate logos. The five biggest hotel loyalty schemes claim 198m members—more than the world’s trade unions can boast, if you exclude China.
Trade and diplomacy take place in hotel chains, as much as in boardrooms and the United Nations general assembly. The negotiations in November 2013 over Iran’s nuclear programme were held at the InterContinental Geneva. Hotels are where people plot takeovers and debate global warming. In the emerging world the well-off marry, party, lunch and shop in hotel chains. The locations of celebrity deaths have evolved with the industry. In 1978 Sid Vicious of the Sex Pistols allegedly stabbed his girlfriend to death in the Chelsea in New York, a warren of bohemians. In 2012 poor Whitney Houston passed away in a Hilton.
Traditionally hotels were glorious illusions. In the 1930s George Orwell worked as a plongeur, or kitchen dogsbody, at Hotel X in Paris. In “Down and Out in Paris and London” he described how French grandeur existed a double-door away from kitchens in which filth ran “like the intestines through a man’s body”. Prolonged exposure to hotels’ artifice could induce madness. The billionaire Howard Hughes lived for years in suites, growing claw-like nails and peeing in jars. But for short-term guests, the theatre was fun.
The uniformity and ubiquity of today’s hotel chains may owe more to “1984”. Employees speak from memorised scripts. Rooms are identical, their windows sealed. The poor are excluded unless they work there. Little wonder that hotels attract rage. There have been 18 big terrorist attacks against them since 2002; from Kabul to Jakarta angry young men have bombed five-star establishments and machine-gunned their guests.
So next time you fix your wake-up call and slip beneath sheets that are folded according to a manual, ask yourself what you are getting into. Are you are a robot in a corporate dystopia? The pampered exploiter of a global underclass? Or, these days, you might be participating in a bold, worldwide social experiment.
Puttin’ on the Ritz
There have been three epochs of hotels. The age of the grand hotel ran from 1860 to 1960 and its origins can be found near the site of Orwell’s torment, near the Opéra. Le Grand Hôtel was opened in 1862 by Empress Eugénie. With 800 rooms it was a palace—“like home”, she said—and designed to celebrate French science and art.
As ocean liners and railways connected the world, more grand hotels were built. They were independent, or part of small groups, and had a distinct character. Often they were wallpapered in nationalism. King Alfonso XIII of Spain built a Ritz in Madrid to keep up with London and Paris. When the rebuilt Waldorf Astoria opened in New York in 1931 in the depths of the Depression, Herbert Hoover called it “an exhibition of courage and confidence to the whole nation”. As the cold war began Joseph Stalin planned the vast Hotel Ukraina in Moscow as a symbol of Soviet might.
In the 1950s a fast-talker from Texas called Conrad Hilton decided to build hotels abroad, declaring them part of America’s fight against communism. Hilton was right to believe that Western hoteliers were destined to go wherever jets flew their customers: globalisation and the rise of emerging nations have led to a decades-long boom. But he failed to foresee what would happen to hotels’ identity. To go global, chains needed to muzzle their nationalities and abandon the grand hotel model.
From 1960 began the second age of the hotel. The old trade of feeding and watering people was industrialised.
In hindsight two innovations have proved essential. The first was to separate the property business from the business of looking after guests. The growth of debt markets has made it possible to spin off hotel buildings to separate owners, who usually borrow heavily against them. Marriott hived off its real estate in 1992. In 2013 Accor, based in France, became the last global hotel group to embrace this logic.
Getting local owners to build and pay for hotels has let big hotel groups expand much faster. In the emerging world they can also outsource the murky work of developing land and dealing with officials and mafias. “They do the funny business,” winks the manager of a plush hotel in India, whose basement is periodically invaded by a Hindu chauvinist gang in search of bribes. In the West the ultimate owners are mainly investors. In Asia they are often rich families who live on-site in royal style. “They are not feeding their sons and daughters from the hotel. They are feeding their egos,” says one Accor executive.
In some cases the local owners also manage the properties on the group’s behalf. Given this separation of functions, how can the firms be sure that every outlet under their brand cooks the food decently and cleans rooms properly? The second innovation was contracts and franchising arrangements to govern the relationship between hotel chains and local managers. The fine print was specified in standard operating procedures (SOPs). Firms paid agents to stay in their hotels, sometimes incognito, to check these rules were met.
In the early 20th century Ellsworth Statler, an American entrepreneur, was the first person to codify the operation of a hotel group, using the motto “a room and a bath for a dollar and a half”. The Marriott family later turned the method into a science. The second-generation boss, J.W. Marriott junior, who still runs the firm, became a fanatic. “When I say that the company’s prosperity rests on such things as our sixty-six-steps-to-clean-a-room manual, I’m not exaggerating,” he wrote in his 1997 autobiography.
You’re in room 101, Sir
A veteran chef explains the grip that SOPs have. From Tokyo to São Paulo all omelettes must match a laminated picture (they should be cigar-shaped). A manager in Dubai says he follows 2,300 rules, including the phrases used to greet guests. A 2010 Hilton manual stipulates that staff must answer phones after three rings, that guests’ pets may not weigh more than 75lbs (34kg) and that scuba-diving boats must provide free pieces of fruit. A 2004 SOP book for InterContinental allows staff to wait until the fourth ring, requires drinks to be refilled when two-thirds empty and specifies that rooms must offer at least four pornographic films.
The industrial hotel has been an economic triumph. But over the years its uniformity has made it an emotional failure. Because of its impersonal blandness, frequent travellers have less fealty than pirates. They carry not one but several loyalty cards and spend only half or less of their budgets with one chain, according to Deloitte, a consultancy. “Unless I see a brand sign on the door I can’t tell the difference,” one hotel boss himself admits. Guests scroll through TripAdvisor’s candid camera shots and algorithmic scores as coldbloodedly as hoteliers design SOPs. The website is now worth more than all but two of the big hotel groups.
Even as the industrial model conquers new frontiers (see article), in the rich world guests are rebelling. Of the 100 leading hotels in the world picked by readers of Condé Nast Traveller, only around a third now belong to big chains. Airbnb, a website, lets low-rollers rent apartments by the night. It has had 9m guests and is big enough to have annoyed New York’s authorities, who want its users to pay more tax. Perhaps it will oust traditional hotels, as YouTube has sidestepped television networks.
If industrial hotels do not have an emotional connection with their guests, can they manufacture one? This hope is behind the modern cult of service. Yet perfect service is a slippery elixir: branding gurus speak in tongues to describe it; hospitality professors crunch regression equations to capture it and every hotel chain swears it is what makes them unlike all the others.
Some elements are quantifiable. For example, the best hotels often have long-serving staff (the average tenure at the Bangkok Mandarin Oriental is 14 years) and a happy atmosphere. In the 1980s a newish firm called Four Seasons managed to reproduce this magic across a handful of luxury hotels, with staff who made an understated effort to be helpful. Many still view Four Seasons as the benchmark. Its founder, Isadore Sharp, notes that Apple studied his firm when they were planning their stores.
But replicating intimate service on a mass scale is an inherently implausible goal—and when applied to the world’s 16,500 posh hotels, the mission has led to an arms race of obsequity. Once hotels competed through their facilities: first came shampoo bottles, then ergonomic mattresses, flat-screen TVs and spas. Now they jostle to engineer “emotional touch points” and “wow moments” with guests. Staff compile dossiers on customers before they arrive. A hotel in Colorado downloads pictures of your family from the internet and frames them. The housekeeper at a luxury hotel in Mexico matches the colour of the thread in guests’ sewing kits to their clothes.
The trouble is that many people do not want to be touched, emotionally or otherwise. The best hotels, thunders one globetrotting banker, are the ones guests hardly notice. Others like the flattery and grovelling but forget who did it. And the service craze may be making hotels less, not more, human. Should guests really expect authentic affection from staff whose weekly wage is less than their minibar bill? A creepy Harvard Business Review study of the 2008 terror attack on the Taj Mahal Palace in Mumbai examined the way staff had protected guests, often at the cost of their own lives. It asked, “What can other organisations do to emulate that level of service, both in times of crisis and in periods of normalcy?”
The bubble of servility may even corrode high-fliers’ judgment. In her book, “Plutocrats”, Chrystia Freeland describes being in a car with a Silicon Valley boss when Dominique Strauss-Kahn was arrested for allegedly assaulting a maid in his $3,000-a-night suite in New York (he denied the charges, which were later dropped). The boss confessed that “you start to feel the world should be built around you and your needs. You lose all sense of perspective.”
The third era of hotels offers a different solution to the problem of impersonality. It can be traced to 1980s New York. Ian Schrager and Steve Rubell had previously run a nightclub, Studio 54, in which Bianca Jagger once rode a horse and Andy Warhol held court. In 1984 they opened Morgans, the first boutique hotel. It was desperately cool and importantly different. The idea was for restaurants and bars to be packed with locals rather than being cross-subsidised ghettos for lonely executives. It suggested that hotels could target customers based on their interests rather than their income. “I’ve had a major impact,” says Mr Schrager. The “industry had lost its way”.
A decade later Starwood, a big hotel group, borrowed the boutique idea and created the W chain, which is the biggest new hotel brand in four decades. Now most hotel firms offer an expanding variety of flavours. For a century hotels have been categorised by their guests’ budget, or proxies for it, such as the star scale. This approach is now “nonsense”, says Richard Solomons, the boss of IHG, a hotel firm.
His company now runs a chain that offers Chinese hospitality, with banqueting suites and midnight noodles. Heavy metal fans can now stay at Hard Rock Cafe hotels. Fashionistas can gather in pads run by the jeweller Bulgari that boast “textural juxtapositions and chromatic harmonies”. There are eco-friendly brands and urban haunts for social-media fanatics. The furniture firm IKEA is planning a chain for young people. It is not too much of a stretch to imagine sub-brands for frisky retirees or nightclubbers.
The hotel of your dreams
The backlash against uniformity means that designers can take more risks. “There is no hotel that feels like home. Forget home,” says Adam Tihany, a leading designer. The SOPs are being relaxed, says David Richey of Richey International, a consultancy that used to audit such rule books but now advocates improvisation. Hotels’ procedures will have to become still more flexible as Chinese and Indian tourists go abroad in numbers—a surge that will vastly exceed the waves of travellers from Japan and Russia from 1980 to 2000. Meanwhile mobile phones and social media will force hotels to react to customers’ views in real time, says Frits van Paasschen of Starwood.
All these bespoke gadgets and features are arguably mere marketing gimmicks. The boutique approach can sometimes feel like another form of irritating unctuousness; the third age of hotels may be a mere fad, destined to be much shorter than their industrial age. Perhaps in the end the boutiques will themselves multiply and ossify into sterile chains. But there is another way to see them, and the future of hotels.
In the industrial era hotels were rigid autocracies, reproduced by rote and stratified by income. Now they are arguably evolving into communities of like-minded folk who, at least for a few nights, live in a system that transcends nationality and responds to who they are. Or who they would like to be: unlike most communities, hotels are temporary, absolving guests of responsibility or the need for personal consistency.
In the future the hotel may offer neither bland uniformity nor authentic warmth but a proliferating number of experimental worlds in which to insert yourself. Who do you want to be next time you hand over your passport and check in?