YOTEL’s business aim is straightforward: to combine the design and value innovation of Japanese ‘capsule hotels’ with the style of business-class air travel.
Intriguingly, these hotel rooms, billed as ‘luxury’ are priced at a rate of £40 (Economy) and £80 (Premium) in prime locations.
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YOTEL wants to deliver a four-star experience at prices that undercut four-star hotels. If its founders succeed in this – apparently contradictory – aim of combining luxury with value, then the rest of the hotel business had better sit up and take notice.
Given the airline analogy, it is hardly surprising that the first YOTELs will open within airports. However, the vision of CEO and founder Gerard Greene extends much further.
His aim is to revolutionise the world’s hotel business and he clearly enjoys challenging the status quo.
This is no doubt influenced by his business partner in YOTEL, the high-profile Simon Woodroffe (founder of YO Sushi). Greene has a lot at stake personally, even selling his home to set up YOTEL.
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By GlobalDataI visited him at his office in Marylebone, London, where a prototype Premium room has been set up. It is only 10.5m2 but manages to pack in a wealth of features and amenities.
Greene is questioning some core assumptions about hotel design and service, but what is actually under the skin of his affordable luxury proposition? I started by asking what a typical YOTEL will feel like as you enter.
Priestman Goode, the firm involved in designing Airbus’s futuristic passenger jets, was commissioned to design two core room types: Economy and Premium. The design process itself was painstaking and took a couple of years.
Greene outlines what the guest can expect. “There is a central corridor with rooms opposite each other,” he says. “Imagine a passenger plane or cruise-liner where every room has a window seat.
“The corridors are an interactive experience, unlike in most hotels where they are just dead space.”
Greene certainly dislikes ‘dead space’ and has also removed the typical hotel lobby; YOTELs have just a small reception with automatic check-in and check-out.
There will also be a ‘galley’ area as you come up to your floor, with service similar to that provided by an airhostess on a flight.
As Greene puts it: “There is a service element to the hotel.” He does not want it described as a budget hotel.
He poses another challenge to conventional hotelier thinking when he refers to hiring people who thrive in a high-volume retail environment.
In this sense, successful healthy sandwich chain Pret a Manger is seen as a benchmark for its efficient and friendly staff.
INNOVATIVE USE OF SPACE
Greene leads me into the prototype Premium room and immediately highlights a surprising amount of storage space, given the size of the room.
“As you enter you’ll see the luggage storage area. For two people it is efficiently designed so that each person has their luggage space one above the other. There is more storage at the top in case you have been shopping, and also a safe.”
The bed can be kept in a sofa position – fine for one person to sleep in or sit and watch TV – or it can be extended to its full width. (This process is motorised for safety and convenience.) Even if there are two people and the bed has been extended to its full width, you can still get around the room.
Next we enter a relatively large bathroom. At one third of the size of the room it is much bigger than I had expected. This is no accident, as Greene explains: “It’s a generous bathroom, yes. I always think a bathroom is one of the key elements of a hotel room. Ours has luxury fittings and ample storage.”
There is also a full-length mirror and a barrier to the bedroom, which can be frosted up.
INTERACTIVE TCHNOLOGY
Also very prominent is what YOTEL terms its ‘techno wall’. An iPod can be plugged straight into the room’s sound system so you don’t need speakers and international sockets.
There is a flat screen TV, more hanging storage, mood lighting at different levels (like aircraft lighting) and special ‘play lighting’.
There is also a telephone and air-conditioning system and a leather surround area with built-in speakers.
I am struck by the open, modular feel of the in-room environment. You can sit at the desk in the room all day and there is a pull-out chair for that very purpose.
There’s a further twist, says Greene: “You might even leave the room door open, quite unlike in conventional hotels. If you are in a group, you can put four rooms next to each other at the end of the corridor and use it as shared space. It’s deliberately interactive.”
Interactivity is crucial at YOTEL. There is interactivity in the room in the way that the bed/sofa/storage area can be rearranged. The ‘techno wall’, with its high-tech gadgets, and the modular workspace are both interactive.
There is interactivity between rooms, as they can be booked in clusters and their doors opened at the ends of corridors, and there is social interactivity in the galley areas and business class lounge.
As well as being convenient, YOTEL is conceived as a fun and sociable experience. Innovation is clearly important to Greene: “When people talk about MP3s they mention iPods in the same breath. We are hoping to define the market in the same way.”
The size of YOTELs will vary too. At airports they are looking at 40 to 50 rooms and in central London between 200 and 400.
The Economy Room is apparently a lot smaller – half the size at half the price. I ask Greene to explain how such rooms can seriously be described as luxury.
“The Economy rooms are aimed at a different market,” he replies, “but they’ll have the same design elements and quality. They’ll be lower in price simply because of less space. It’s about luxury at an affordable price.”
CAN LUXURY BE AFFORDABLE?
This idea of ‘affordable luxury’ is difficult to pin down. For a start, how do you make it economically viable?
Greene is adamant it can be done: “We are trying to challenge all the usual parameters. I stayed in a five-star hotel in Istanbul recently and the bathroom was actually smaller than ours. We have pulled the costs right down. All the room components come from China in parts and are assembled on-site. It will be packaged up as a franchise so that partners can put it together themselves.”
This may address the cost side of the equation, but can a flat-pack built hotel really deliver on luxury?
“Yes,” says Greene. “We will have fun, smiling staff and many other service elements. We will meet the expectations of a four-star hotel with the flat screen, the high-tech amenities, the nice towel, the quality mattress and so on. The difference is to pay a lower price you have got to accept a smaller room.”
Importantly, the deal on offer is perfectly transparent: less space but a desirable and fun place to stay.
So is it only in room size where YOTEL is cutting corners? “Absolutely” is Greene’s confident response. “Everything else is right up there with any four-star hotel. We are trying to reinvent how hotel products are viewed and what is already on the market is therefore not relevant.”
To deliver affordable luxury, the main weapon YOTEL has deployed is creativity. To develop its edge, it has not referred to the rest of the market but returned to fundamentals with a blank sheet of paper.
It has not been afraid to draw from influences well outside the hotel business. Greene’s aspiration is, he says, to “completely change how a hotel is done in order to provide maximum value to the customer”.
SMALL ROOM, NOVIEW?
I tease Greene that with his beloved internal windows you don’t get much of a view. But he is dismissive: “It’s not the norm to get a great view in London and most people don’t need it. They want to stay somewhere cool and funky, but don’t want to pay £200 for it. They also don’t want to feel like a second-class citizen in a B&B.”
Ruthlessness has been demonstrated in other areas, for example the lack of a restaurant, but Greene is not bothered by this. “We are in central London!” he exclaims, “where there are over 10,000 restaurants.”
He is just as dismissive of Stelios Haji-Ionnaou’s ‘no frills’ easyHotel: “We don’t see ourselves in the same category, as they offer no added value. If you want to attract a good clientele you must have comfortable beds. It is a basic requirement. We also provide good quality sheets and don’t expect people to clean their own rooms!”
DEFINING THE MARKET
I ask Greene who he sees as the primary target audience for YOTEL. “It’s the same audience as YO Sushi – it’s the attitude that counts,” he says.
“Kids from MTV, businessmen in suits, ladies who lunch, women with kids, the media crowd – YO Sushi gets all those groups, and YOTEL will be no different. Ultimately, we want them to feel the ‘YO’ experience: energetic and inspired. That energy cuts across our brand.”
He seems confident of finding his market from several sources, but I ask if this is an unfocused strategy.
“Let’s consider a self-employed architect,” he responds. “He comes to London and doesn’t want to spend £250 on a designer hotel in midweek. He can stay here for £80 a night and still get the same buzz of somewhere ‘designer’.
“But you also get the people who would normally pay £60 to stay at an awful B&B in King’s Cross. Suddenly they think, "Wow, for an extra £20 we can stay at YOTEL." For this audience it becomes an aspirational brand. Therefore, we will attract customers from all sides – from nasty B&Bs, from budget hotels, from expensive design hotels, from mediocre three-star hotels. We’ll nick business from everybody and put them all to shame!”
So how fast will the YOTEL concept be rolled out? Greene’s answer is uncompromising: “We have spent a lot of time developing the right product,” he states. “Now we believe in it, we will roll it out as fast as possible – bang!
“The first airport YOTEL will be up and running later this year. London will be a year later, our ultimate target there being 1,000 rooms. Then we will go to around five major cities in the UK, followed by YOTELs all over the world starting with the major airports.”
So his ultimate goal is complete world domination then, I ask slightly tongue-in-cheek? “Yes, definitely,” Greene replies with alarming seriousness. He is clearly a man on a mission.
