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A Design-based Innovation Strategy for the Hotel Industry

Bo-Young Kim (Brunel University, Jai-Beom Kim (Sungkyunkwan University, Ray Holland (Brunel University,

Nowadays and more than ever, design reflects the customers needs and the hotel industry has taken full advantage of this factor. The modern cultured tourist, catered for by the hotels focused on design and lifestyle, is the so-called lifestyle guest. This growing user segment can be described as art and design interested, early adopters of fashion, media and technology, and also share a passion for quality or even luxurious living. To meet such demands, many modern hotels have utilised a more consumercentric renovation strategy by incorporating design-oriented factors. This study presents the direction of such hotel innovation through analysis of design-based strategies of domestic and international hotels, collection of various customer requests, and by suggestion of conceptual models of design strategies as a guide to innovating when developing a new hotel.

A number of service sectors have transformed reflecting the experience economy. Entertainment and infotainment increasingly takes place in a highly aesthetic and eclectic atmosphere where it becomes further styled and designed [1]. This phenomenon is also evident in the hotel industry by witnessing the transition from natural environments and / or pure historic sites locations to designed or staged environments and events in which aesthetic dimensions play an increasingly important role [2]. Although hotel design and aesthetics research is still in its infancy, its importance on hotel management application has been pointed out in consumer behaviour literatures as well as in other disciplines. Without any doubt, design is a key marketing variable that carries appreciable competitive importance in the marketplace of most business industries, especially those industries that are faced with saturation of consumers and market stagnation [3]. Furthermore, many products today can be differentiated from others only on the basis of aesthetic and design criteria. Therefore aesthetic elements and design issues of the hotel business constitute important dimensions for information processing and attitude formation of consumers [4]. By treating design as a strategic tool, a hotel and its immediate geographical environment can gain a sustainable competitive advantage. This research discusses the role of design within the new or changed hotel consumer demands and behaviour and

future business development.

The paradigm shift of the hotel industry

Urbanization created by modernization and industrialization has brought tremendous growth of hotel demand along with city development issues such as population's centralization, living environment changes, consumption emphasis, and internationalization. Furthermore, the modern traveller is more experienced, more educated, more destination-oriented, more independent, more flexible, and more environmentally conscious. The main differences between the old and new consumer is threefold, firstly the sharp increases in disposable income for a large section of society, secondly, the allocation of that income on leisure goods and service, and thirdly, access to information [5]. For these reasons, the modern hotel not only offers a place to sleep, but also provides its guests with an escapist experience through its design, and five senses including spectacle and amenities. Staying in a hotel is no longer a question of getting only a nice, clean and comfortable room. It is much more. It is an experience, an event, a happening. However, this does not mean that todays guests do not require service and quality. On the contrary, guests want to pay for the pleasure of staying in a nice hotel but they do demand that everything is at high standard. They sleep and shower there, both highly personal activities which, depending on the mood of the individual, might require mere functionality or a higher level of sensory or emotional simulation. According to a recent survey by PricewaterhouseCoopers Hospitality and Leisure Group, the European lifestyle hotel sector is confident of continued growth, with plans a further 6,800 new rooms over the next 5 years. The survey 'Mapping an Innovative Niche Sector in Europe: Goodbye Boutique and Hello Lifestyle Hotels' also identified that there is a lack of clarity to determine what constitutes "design". The survey further identified that German and Spanish brands Sorat and Meli Boutique lead the field of European lifestyle hotels with 2,203 and 757 rooms respectively, followed by Sweden's Malmaison (740 rooms), Spain's Derby Hotels (720 rooms) and USA's Art'otel brands (661 rooms). Now the large hotel chains are seeking to emulate the uniqueness of hotel sector that grows in popularity as value-orientated consumers (corporate and leisure) seek individuality. The survey found that corporate users account for 68% and leisure users 32% of the customer mix, and those 'lifestyle' operators surveyed stated that they would foresee little change in this mix over the next five years [6]. [ Table 1 ] The classification of lifestyle hotel
New hotel trend Lifestyle Hotel Boutique Hotels (Themed & Aspirational Hotel) Hip & Cool Hotels (Fun & Stylish Boutique Hotel) Cases Hotel de Buci (France), Albergo Cesari (Italy), The Scarlet (Singapore), Medusa (Austrailia), Dylan Hotel (USA) James Hotel (USA), 25 Hours (Germany), Hi Hotel (France), Maritime Hotel (USA), Malmaison (U.K.)

Funky Hotels (Cultural & Historical Unique Hotel) Tablet Hotels (Unique Hotel for Global Nomards) Design & Designer Hotels (Artistic and Creative Design Hotel)

Ice Hotel Quebec (Canada), Malmaison Oxford Castle (England), Imperial Boat House(Thailand), Fantasyland (Alberta) Amangani (USA), Le Manoir aux QuatSaisons (U.K.), The K Club (Ireland), Marona (Mexico), The Peninsula (H.K.) Skt Petri (Denmark), KLAUS K (Finland), Resonate Club (Japan), Farol Design Hotel (Portugal), Hillside Su Hotel (Turkey)

Lifestyle hotels offer, above anything else, individuality. It stands in contrast to many chain hotels that are designed and furnished to similar specification. Essential features of lifestyle hotels include unique identity, modern character, smaller properties, high levels of personal service, reflective of the personality/style of their designer and/or operators and owners, and stylish designled architecture and interiors, often offering high quality high tech in-room facilities [7]. The traditional view of a hotel and its design was strongly tied to social and cultural values. Today, in order to better accommodate the customer's sensitivity and viewpoint, design conscious hotel management offers a variety of hotel trends to suit each customer.

The design-based Innovation strategy

On these backgrounds, design has become one of the key elements in the evolution of the hotel product and not only for unique entrepreneurs opening unique hotels. Starwood launching in 1998 its hotel concept W, is the first example of a traditional box hotel company turning to the lifestyle hotel sector. In the hotel business with respect to the evolution of the cultural and emotional market, design and style have become a basic requirement to attract clients and are no longer enough in their own right. - Designer-based innovation Semiramis is Karim Rashids first hotel project. Royalton Hotel The groundbreaking Royalton, located in the heart of midtown Manhattan, introduced the world to the concepts of Hotel as Theatre and the Art of Lobby Socializing by Philippe Starck. Donatella Versace, whose 277-room Palazzo Versace opened on Australia's Gold Coast in 2000. John Rocha is getting in on the act by designing the interiors of The Beacon Hotel in Dublin.

- Design project-based innovation The launch of the redesigned Fox in Copenhagen was fulfilled by Automaker Volkswagen in 2005. Bulgari, the Rome-based firm is the latest venerable luxury goods company, emphasizing Bulgari style to the Ritz as the first project. Bulgari's second project is a resort too. It is set to open next year on Bali. Birger Jarl Hotel in Sweden is the first hotel with the concept of modern Swedish design by 22 designers. 3Rooms Italy, Milan is three expensive designer suites in the 10CorsoComo complex. This intimate hotel project offers personal hospitality to a weary traveller.

- Design consultancy-based innovation From traditional luxury brands to independent contemporary boutiques, HBA/Hirsch Bedner Associates has designed more than 600 of the worlds greatest hotels, resorts, and spas such as The Fullerton Hotel at Singapore, and Phoenicia InterContinental at Beirut and Lebanon. Ilikai hotel undertook renovation plan with Powerstrip Studio. Marriott Rewards worked with product and experiential design firm IDEO, which followed members from their check-in through their stay and interviewed them to find out what they wanted from the program.

The conceptual model of the design-based innovation strategy

This research discovered that the design-driven innovation strategies consisted of a special pattern that depended on the combination of four factors; designer, design group or design firm, profit value, and non-profit value. For the pattern arrangement, this research suggests the conceptual model built on four design-based innovation strategies; (1) professional design strategy is partly and short term one for the aesthetic remodelling by professional interior designer like Raymond Morel and Christian Derory (who have worked for Murano Urban Resort in Paris); (2) consulting design related to the business level for the innovative hotel management by joining with a hotel design consultancy company such as HBA, KIMTON, Moganhotel Group and Yabu Pushelberg; (3) In the creative design strategy, the hotel develops a new brand reputation hooked to attractive innovation for keeping the

new customer by engaging a star designer like Karim Rashid, Phillipe Starck: (4) promotional design through new storytelling and events to maintain promotion of the hotel by communication designers, advertisers, media groups.
[ Table 2 ] Design strategic types for hotel business innovation Subject Objective Profit value (Direct effect) Non-profit value (Indirect effect) Designer Professional design strategy Creative design strategy Design Group (or Firm) Consulting design strategy Promotional design strategy

As hotel experiences become available to an increasing population, the hotel industry is faced with, more a experienced and quality conscious consumer who demands unique personalized tourism experiences in an aesthetic and authentic atmosphere but, at the same time, is looking for comfort, convenience and choice of everyday life to which they have become accustomed. More and more hotel and tourism enterprises attempt to create such an image personality through an aesthetic, design or architectural corporate identity. There is a consensus that the design-based innovation strategy is topical issue for remodelling and creating business in the hotel industry. This research shows the successful case studies and suggests a conceptual model for the creative hotel innovation strategy.

[1] Fesenmaier, D.&Gretzel, U. (2002). Searching for Experience: The Future Role of the Consumer in the Leisure Experience, Conference Proceedings, Leisure Futures Shaping the Future of the Tourism and Leisure Industry, Innsbruck, April 11-13 [2] Rutes, W., A. & Penner, R., H. & Adams, L. (2001). Challenges in Hotel design, Hospitality Design, vol 20, no 4, 82-85 [3] Hundt Druck: Kohl. Bloch, P.H. (1995), Seeking the Ideal Form: Product Design and Consumer Response. Journal of Marketing, vol 59, 16-29 July [4] Kotler, P. & Rath, G. A. (1984). Design A powerful but neglected strategic tool. Journal of Business Strategy, vol 5, 16-21 fall [5] Veryzer, R.W. (1995). The Place of Product Design and Aesthetics in Consumer Research, Advances in Consumer Research, 22, 641-645 [6] Liz Hall (2002). The Future's Bright, The Future's Boutique, PricewaterhouseCoopers LLP (UK) [7] Riewoldt, Otto (2002). New Hotel Design, Watson-Guptill Publications