In basic microeconomic terms, hotels are confronted by a fundamental challenge: how to manage virtually inelastic supply (at least in the short run) with fickle and ever-changing demand.
One recently launched hospitality startup thinks it's found the answer.
Denver-based Collective Retreats offers luxury tent accommodation that can be moved from place to place, according to demand dynamics.
The group is betting that the trend towards 'glamping' (glamorous camping) is more than just a fad.
The tents have nothing to do with the army or the boy scouts. They come equipped with 1’500-thread-count sheets, chandeliers, coffee service, an en-suite bathroom, and housekeeping services. Wi-Fi is available, but no TVs, and there’s an onsite restaurant, as well as the possibility to book in-tent spa experiences.
“We have the reliability of a five-star hotel, but the local, authentic, indigenous nature of what you’d find from something more like Airbnb,” notes co-founder and CEO, Peter Mack, a 10-year veteran of Starwood Hotels & Resorts.
The company doesn’t seek to own the property or the land on which the tents sit, but does own the tents, which give it a flexible portfolio of accommodation to offer guests.
Instead, the company concludes deals with the owners of property where it wishes to place its tents. Otherwise, ADR (average daily rate) is around US$500.
On to Central Park?
Following its initial location in Vail, Colorado, Collective Retreats has expanded to Yellowstone (in Big Sky, Montana) and now the group's 'camps' accommodate between 10 and 20 tents.
The company is also planning to set up camp in California’s Sonoma Valley, New York’s Hudson Valley and Texas Hill Country.
According to Mack, the company eventually plans to include treehouses and even Airstream trailers in its offerings.
“My goal is, if we do a good job, five years from now we’ll have a retreat in Central Park, in the Metropolitan Museum,” boasts Mack, who adds that, “We’ll be in all these places where people otherwise can’t stay and that their stay becomes part of the experience instead of ‘I stay here and I do stuff there.'”
Funded by key entrepreneurs
Collective Retreats was originally self-funded by Peter Mack himself, but has now attracted some modest investment from various well-known hotel sector entrepreneurs and financiers.
Collective Retreats initially raised US$560’000 and has now reached its goal of US$2.5 million.
Given its asset-light structure, the company needn't pay for infrastructure and is using the money it has raised to invest in the guest experience, according to Mack.
Direct channels preferred
Regarding distribution, Mack has stated that he wants to keep things as direct as possible, relying on the power of word of mouth; he is convinced that the company can maintain this distribution strategy going forward. “If you think about where the OTAs [online travel agencies] come from, it was originally distressed inventory. We can move our inventory around … we can increase and decrease room counts pretty quickly. We don’t have a need to fill distressed rooms. That helps us maintain proprietary booking channels.”
However, if the company is going to scale meaningfully, it will probably need to adopt a broader approach to distribution.
Nevertheless, a standard OTA may not be the appropriate channel for a lodging product that is so centred on guest experience, as opposed to just selling a room.
Platforms that propose curated, luxury experiences, such as The Sybarite, could be something for the company to explore.
A new twist on loyalty
In spite of its still small size, Collective Retreats has already launched its own highly personalised guest loyalty scheme, which seeks to distinguish itself from traditional hotel rewards programmes.
Instead of encouraging guests to 'earn' and 'burn' points, Collective Retreats’ programme offers recognition and the ability to collect actual goods like personalised merchandise (e.g. a bandana) and to receive rewards in the form of 'special experiences'.
Guests are not identified by a number, but by their own personalised “travellers’ mark” – a designation that includes symbols which represent their traveller type. This is determined on the basis of a short questionnaire about their personality and travel preferences.
“People aren’t numbers,” declares Mack, adding that, “We’ve built our whole platform around this combination of really recognising people for what they want and who they are and giving back to them for that … every time we speak to them we’ll use that mark of theirs. When you show up on property, your door, your menus will have that mark on there. Each retreat has its own symbol mark, too.”
Will the big chains follow this trend?
The answer is they already have.
Marriott offered its loyalty members “safari tents” outfitted to resemble eight of its own lifestyle brands (including Moxy, Renaissance, EDITION, Autograph Collection, etc.) during the second weekend of the Coachella festival in Indio, California, in mid-April.
While this is an event-specific installation, it is similar to Collective Retreats’ concept of mobile accommodation.