Redesigning Hotels to Suit Millennials' Tastes

Guy Heksch runs restaurants for the giant Marriott chain and knows what younger guests want from their hotel.

The Marriott's new 'Moxy' hotel in New Orleans.
Guy Heksch

Check-in is done at the bar; a DJ puts guests into a party mood, and the rooms are intentionally small so guests won’t want to hang out in them. This is the concept of the new Marriott brand “Moxy,” which opened a branch in New Orleans this week – and which is deliberately being marketed to Generation Y (born between 1980 to 1994) and Generation Z (born after 1995). The idea seems to be less grabbing them today than assuring them as clients in the future.

The Marriott chain has more than 5,500 hotels in more than 100 countries, which it is gradually moving to adapt to a younger crowd, under the guidance of Guy Heksch, 42, manager of the Marriott group’s restaurants and bars (“Senior Director, Restaurants and Bars Global Operation”).

“We don’t create lobby bars any more, but bars with a concept,” he says. “It could be around the drink or the design. In the past, the hotel’s bar and restaurant would be designed by the same people who designed the rooms and hallways.” Not so any more.

Rest assured that Marriott isn’t neglecting its older clients, but generation Y and Z people are opinion leaders at this point, Heksch says. “Our studies show they will constitute 50% of total tourism clientele in the year 2020.” Which means change needs to come, because what worked until now won’t do the trick any more, he says.

Focus groups held by the chain showed that these younger generations view the classy Ritz (a Marriott branch) as a hotel for their grandparents, not them. For them, the Marriott is an excellent brand, but it’s outdated: They want something trendier, Heksch says. The chain is working on that very thing.

The chain expects to open 20 Moxy hotels by year-end 2017. Note that the Marriott is actually a hotel management chain, and it hopes that the new brand will attract more hotel owners, through faster return on their investment – one reason being that construction costs on Moxy hotels are lower; its business model requires fewer employees than other hotels; and the rooms are smaller.

Another aspect of the new strategy is that for the first time in its history, the Marriott chain decided to look at locals — and not only hotel guests — as clients for its restaurants and bars. “The first question guests ask the concierge is where locals go to eat and drink,” Heksch says. “Our slogan is 80% local customers, 20% guests. The fact that somebody may visit us three times a year doesn’t mean we should focus on him.” Running a restaurant and bar just for guests is simply unsustainable, but if locals like them, they’ll bring in other people.”

Heksch is a scion of the Federmann family, which owns the Dan hotels chain. So he’s been living the hotel life from an early age. Somewhat like an Israeli Eloise, he spent his early formative years at a hotel, the King David in Jerusalem, run by his father Yossi Heksch. He himself has been in the business for eight years, advising on developing concepts for big 5-star chains and Michelin-starred restaurants, and feels lucky to work in something he loves. He’s worked with star chefs like Mario Batali and Alain Ducasse and describes himself as a food and drinks junkie, having trained as a sommelier and taught to cook in Michelin-star eateries in Europe. Though he’d travel across half the world to experience a new delicious food, he doesn’t scorn the simple worker’s restaurant, and his favorite spices are salt and pepper.

The Marriott's new 'Moxy' hotel in New Orleans.
Guy Heksch

“I want sweet to be sweet and sour to be sour, with as little mucking about with the raw materials as possible,” he says.

Heksch lives in Washington and visits Israel frequently. He will be visiting soon, for the fifth international conference on hotel design and development by the Israeli Hotels Association, where he will be sharing his views on coping with the changes mandated by generations Y and Z regarding restaurants and bars at hotels.

“The Y generation wants an authentic food and drink experience, making them want to leave the confines of the hotel. So hotels have to create a new, fresh concept, to tell a local story inside the hotel itself,” says Romi Gorodeski, VP at the Hotels Association.

What they don’t necessarily want is kosher food in hotels, he says.

‘Obviously somebody is getting screwed’

Should the bar and restaurant necessarily speak a different language than the actual hotel? “They should be distinguished, but be similar in nuance. They don’t necessarily need to speak the same language,” answers Heksch. “Restaurants and bars don’t need to be ‘faithful to’ or to relate to the brand of the hotel. Historically, the Ritz Carlton restaurant, for example, would have to be grand, with silver cutlery, white tablecloths, waiters in suits who were forbidden to have facial hair or visible tattoos. Today we say it’s okay to behave alternatively. What matters is that the restaurant is relevant to the local crowd, never mind what it says on the building.”

If the restaurant or bar aren’t like the hotel, what’s special about the fact that they are inside the hotel?

“Nothing,” says Heksch. “I want people to say the name of the restaurant and when asked where it is, to say the name of the street and that it happens to be inside a hotel. Let them say ‘I ate with chef this or that at the Carlton,’ not ‘I ate at the Ritz Carlton.’ People don’t need to know it’s at the Ritz Carlton until they get there. It does not have to be important that the restaurant is inside the hotel.”

These days the restaurant will open to the street, not the lobby, he adds. If the restaurant doesn’t have a door opening to the street, the Marriott chain won’t buy the hotel – “It’s that important to us. Customers don’t want to pass through the lobby any more.”

Also, when somebody says “Ritz Carlton restaurant,” or “let’s have coffee at the King David Hotel in Jerusalem,” the association is “expensive for no good reason,” Heksch points out.

In fact, a hotel’s fortunes depend heavily on its restaurant and bar. For example, about a third of the Marriott chain’s income comes from hotel restaurants and bars, and events. A hotel has to have a restaurant or bar, says Heksch. Otherwise the hotel just becomes a glorified Airbnb and a collection of rooms with an elevator is no great attraction. Certainly he can’t flog a Ritz Carlton room for $1,500 a night if he has no proper bar and restaurant. Then there are the events the chain caters, which are not small business. They can hardly send out for pizza.

Since they maxed out the amount people will pay for rooms, says Heksch, the only way to continue to grow profits is to sell extras, which includes food and drink.

In 2015, the Marriott chain’s income from food and beverages was somewhere in the range of $3 billion to $4 billion, on which it netted about a third.

“Today’s generation is looking for value, so forget about charging extra-high prices. It won’t work. We got used to very high profits, and the owners for whom we run the hotels got greedy. They were getting profits of 30% from us on food and drink, and at profit levels like that, obviously, somebody is getting screwed.”

Actual restaurants net around 12% to 14% of turnover, Heksch adds. In short, life is changing and so must the Marriott. It has to lose that image of coffee in a hotel costing more than coffee anywhere else. And if a hotel charges more for coffee, it better have a good reason, such as a better brand of bean, not its name.

As the Marriott makes itself over for generations Y and Z, it has had to enter the social media age. Today the chain rewards workers who manage to get something good about the chain shared.

“We are great at selling rooms but lousy at selling restaurants and bars at our hotels, because that isn’t our area,” says Heksch – but people believe their Facebook friends and the like. It’s an authentic form of media, and it can rule whether a restaurant becomes the next big thing. The chain now has a division of 15 or 20 people working around the clock, watching for every mention of Marriott on any screen. That chain, for one, has noticed the correlation between ratings on websites and apps, and revenues.