YOTEL-ing Me Free WiFi’s as Creative as You Can Get?

So, small-scale, scanty, stunted suites sound silly, sight unseen. But brazenly belief-brimmed brains built brilliance beam-by-beam.

Whether I am traveling for business or pleasure, I am beset by a unique feeling whenever I check in for my stay at a hotel: A sense of naive excitement and wonder, even if I have frequented the same hotel chain in the past. As the elevator ascends to my floor, a series of thoughts that most would find less-than-thrilling cross my mind. “Did I get a corner unit with good natural lighting? I wonder if they’ve upgraded the clock radio’s 30-pin connectors that haven’t been relevant since 2012! I bet the uneven jet from my shower head won’t sting this time. Man, this is going to be GREAT!”

More often than not, my hopes dwindle as soon as I swipe my key – two or three times, to ensure the scanner recognizes the card – and enter my room. While customer service and exceptionally congenial personnel are still considered to be paramount in the hospitality industry, there is major room for innovation, and YOTEL, an upstart hotel chain headquartered in London, has raised the minibar for smart and technologically-advanced hotel design to new heights.

YOTEL was founded in 2007 after its founder, Simon Woodroffe, found inspiration in both Japanese capsule hotels and luxury first-class airport lounges. YOTEL’s journey began as a chain of in-airport hotels which were available for 4-hour rental periods; its first location was in London’s Gatwick Airport terminal, and has since expanded to four airport locations in Europe. Customers were intrigued by what YOTEL could do with a small amount of space; they were able to fit a luxurious and comfortable bed, a monsoon shower, a flat-screen TV with multiple USB and power ports, and a workstation (with ultra-fast WiFi, of course) in only 75 ft2. That’s about the size of your average cubicle. [2] [4]

But why stop with airports? YOTEL took their expertise in efficient space allocation to the next level in 2011 when they opened their first full-service hotel location in New York. The rooms in their New York location are a bit spacier, but by being creative with application of technology, YOTEL’s leadership team has been able to do with 170 ft2 what many hotels are unable to do with 350-400 ft2, while also reducing the traditionally high overhead costs associated with the hospitality industry, with smart implementation of new and innovative technologies. [1] [2]

For starters, every room comes standard with an spacious queen bed. How does YOTEL accomplish this, given that a queen bed would occupy ~21% of the floor space, while still allowing for unconstrained movement throughout your room? The answer is simple, but surprisingly unprecedented in US hotel chains; YOTEL’s SmartBeds quickly and easily turn into a comfortable couch with the touch of a button. [1]

 

How else is YOTEL using digital technology to lower the cost of your stay? Well, say goodbye to the antiquated check-in process we all know and love; YOTEL’s electronic kiosks allow you to check in in under a minute, without having to wait in line for the one front-desk agent on staff. [1]

But wait; I want human interaction! What if there’s an issue with my check-in? Worry not – YOTEL’s Mission Control area has a dedicated employee on call 24/7 to assist you with anything you could possibly need, including procuring extra towels, concierge services, and last-minute dry cleaning. [1]

Once you’ve checked out, you may want somewhere to store your luggage for the rest of the day, since your flight doesn’t leave until later in the evening. If that’s the case, YOBOT, YOTEL’s quirky luggage concierge robot, has your back. [1]

By reducing the need for costly human capital and efficiently allocating space at their hotels, YOTEL has been able to improve net operating margins, fit 50% more rooms per site than a competitor with equivalent quality of experience, and maintain room floor efficiency of 85%. Are you as excited as I am about YOTEL’s innovative hotel concept? Well then, get even more excited – YOTEL plans to open a property in Boston’s Seaport District in 2017. [3]

How could YOTEL improve and scale the quality of their experience through technology? Well, there are a number of Smart Home Tech solutions they could consider implementing, but I would be particularly excited about a partnership with Ori Systems, a robotic technology company born out of MIT’s Media Lab, the founders of which have created a groundbreaking mechatronic unit that can turn a studio apartment into a spacious one-bedroom apartment. This would allow YOTEL to offer larger suites to high-end customers, while still sticking to its core ethos of space efficiency maximization. [5]

There are endless improvements that could be made through technology in the hospitality space, but thus far, none have leveraged technology’s potential so elegantly as YOTEL.

Thanks for reading! This is Mike Morgan, checking out.

[796 words]

[1] YOTEL New York Website

http://www.yotel.com/en/hotels/yotel-new-york

[2] YOTEL’s Wikipedia Page

https://en.wikipedia.org/wiki/YOTEL

[3] YOTEL’s Development Website

http://www.yotel.com/en/development

[4] Goodbye office space? The shrinking American cubicle

http://www.cnn.com/2011/LIVING/02/08/shrinking.american.cubicle/

[5] Ori Systems Website

http://orisystems.com/#welcome-home

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7 thoughts on “YOTEL-ing Me Free WiFi’s as Creative as You Can Get?

  1. Excellent post Mike, I really enjoyed it (especially the s-b word combination at the beginning)!

    It’s amazing how they were able to infuse a new vision to an old, rigid industry as hotel lodging. I wonder what the future holds for YOTEL in terms of growth strategy. Given that the lodging industry is so fragmented, they could easily climb their way to a regional protagonist role. YOTEL’s economics seem to be very attractive to self-finance that journey (especially taking into account they are bypassing most of the labor expense, so significant for every hotel, and minimizing the capital expenditures required to acquire large buildings to accommodate spacious rooms), but I think large global players, recently active in the M&A scene, will eventually try to engulf YOTEL (1). In my opinion, the main driver behind a potential acquisition wouldn’t be the opportunity to acquire an additional revenue growth source; rather, the neutralization of a player that could disrupt the industry’s bar for what a “reasonable” price is, which would present a significant financial challenge for traditional players that are bound with the weight of bulky footprints and massive workforces.

    (1) USA Today, “Marriott, Starwood merger is complete, loyalty programs will reciprocate,” http://www.usatoday.com/story/travel/roadwarriorvoices/2016/09/23/marriott-starwood-merger-complete-and-loyal-customers-get-reciprocal-benefits/90885318/, accessed November 18, 2016

  2. This is a super interesting concept. The scarcity of space in today’s increasingly urbanised world is a very important challenge for the hospitality industry going forward. According to a study on the prospects of urbanisation conducted by the UN, continuing population growth and urbanization are projected to add 2.5 billion people to the world’s urban population by 2050. Technological solutions that maximise comfort whilst limiting the need for space will be an important feature in allowing as many people as possible to be able to live in urban centres.

    The hospitality industry as a whole is lagging behind other industries in their use of digital technology. The McKinsey Global Institute developed a Digitisation Index to evaluate different industries on how effectively they are integrating technology and the hospitality industry ranked 20/22 (only ahead of construction and agriculture). Therefore, I am excited to see that companies like YOTEL are trying to push the industry’s digital frontier.

  3. After reading this article trying to figure out what was behind “brazenly belief-brimmed brains”, I had to check the web page for the hotel in New York. For $369 a night I could check out the folding beds next week, or for $295 I could take the booking.com deal for The Waldorf Astoria. For $74 less I was tempted to take the world-famous five-star hotel that Paris Hilton once called home, but I continued reading what Yotel offers: Fast WiFi, pay on arrival, gym, largest hotel terrace in New York, central location, luggage storage robot, 24/7 service, and mobile concierge app.

    Basically, this hotel is offering to see a cool robot store you carry-on and having to install an app to do what is usually done by dialing 0# in the phone. Although the experience may seem like a novelty, I wonder how many travelers will book this hotel again instead of cheaper traditional hotel chains. Is the technology in Yotel part of its operating model to drive savings in labor and real state, and to transfer those to its users? Or is it more of an attraction? I can see a great future for low-cost high-quality hotels in expensive cities like New York. I don’t see on the other hand a promising future for Yotel if their value added is the tech experience at a higher price.

  4. Like Pablo, I had to do more research into this hotel as it was very fascinating. I chose a random weekday in January (holiday season pricing just gets ridiculous) and compared with the Sheraton Tribeca Hotel I stayed at last month, which considers itself to be a 4 star hotel, apparently. The price difference was 119 at YOTEL vs 199 at Sheraton – better location, better amenities, and a more “hip” environment. I was amazed at how low the meals were priced ay YOTEL, and how large the bar space was – I presume they’re after a younger crowd, focusing on socializing outside of the hotel room rather than maximizing their time in the hotel they paid for. And compared to this Sheraton I stayed at, I will love to try staying at YOTEL. I must say I was a little surprised how the YOTEL website did not seem too “digitized”, I would love to see how they bring this innovation further into the hospitality industry.

  5. I remember running across YOTEL five years ago and thinking the robot luggage handler was really cool. However, like Pablo I wonder how much YOTEL is using technology to actual reduce costs, versus using their tech as a gimmick to attract customers (although the CEO has obviously insisted that is not the case).

    For example, in an interview with the WSJ this past June, the CEO mentioned being one of the first hotels to offer free wifi and smart TVs as examples as YOTEL being tech savvy. I would consider neither of those to still be particularly large technological advancements – I wonder if YOTEL is just trying to coast off their tech rep at this point? I think they need to constantly innovate to maintain their reputation – maybe a robot doorman could be next?

    http://blogs.wsj.com/cio/2016/06/06/yotel-rethinks-the-hotel-for-era-of-airbnb/

  6. This is a really great post! Yotel has done an excellent job identifying ways to economize hotels by designing efficient rooms and eliminating hotel staff at check-in. That said, I think there are even more ways that the hotel could cut down on labor costs, especially in the food & beverage segment. Labor is one of the major costs to running a restaurant, but also adds to the overall experience (good or bad). While some diners prefer to have a high service experience when they sit down for a meal, I think Yotel’s business model attracts consumers that would enjoy eating at an automated restaurant. There are already a few interesting restaurants in this space, including Eatsa, that offer automated dining service that eliminates front-of-house staff. Even if Yotel decides not to go this far in automation, they could speed up the ordering and payment process by having tablets available at each table. This would improve order accuracy and free up wait staff to serve more tables. Just some food for thought!

    Sources: http://www.wsj.com/articles/why-restaurant-automation-is-on-the-menu-1458857730
    https://www.eatsa.com/

  7. Mike, cool post! I know you like home tech, and your post demonstrates how home tech can improve margins and convenience. I question why consumers are slow to adopt space-saving furniture, such as the bed/couch device or the ORI system, for their own home? Why are other hotels slow to adopt luggage robots? Are human staff integral to hospitality? In other words, what is the tradeoff between human interactions that travelers are accustomed to versus efficiency and cost savings?

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