Chip Conley founded boutique hotel chain Joie de Vivre when he purchased a pay-by-the-hour motel in the Tenderloin district of San Francisco in 1987. The Phoenix Hotel launched Conley’s career as a pioneer of the boutique hotel movement. He ultimately grew JDV’s portfolio to 52 hotels before selling it to Geolo Capital in 2010.
At age 26, he could see that the future was boutique hotels, and he played a significant role in defining what that looked like. Later, as strategic advisor for hospitality and leadership at Airbnb, he could see the future was in the sharing economy, and he helped define what that would look like, too.
During a casual talk at HotelSpaces, Conley shared tips for what hoteliers need to do to define themselves and set themselves apart from their competition.
How Do You Define Who You Are?
His first tip was to find a tool for deeply understanding their core customers' needs; his was magazines.
When Conley first bought the Phoenix Hotel, he knew he wanted to create "a crossroads for creative people," especially musicians and artists. The problem was, he didn't know how to do that. So, in a meeting with his team, he told them to come to the next meeting with a magazine that they felt defined the personality of the hotel. At the next meeting, five of the seven people showed up with Rolling Stone. They came up with five adjectives that they felt defined the personality of Rolling Stone: funky, irreverent, adventurous, cool, and young at heart.
"In the process of creating the hotel—the design of the rooms, the kind of restaurant we created, the kind of staff we hired—we came back to these five adjectives," he said. "It really helped us to create almost an editing function of what we would do and not do. This approach helped us to understand the core soul and personality of the hotel."
Conley also gained some valuable insight from one of the Phoenix's regular guests in its early days, the infamous Harvard psychologist Dr. Timothy Leary, a man in his 70s who did not fit the demographic of the hotel (tattooed twenty-something musicians) but he did fit the psychographic. Leary told Conley, "In a boutique hotel, you are where you sleep," meaning that when a boutique hotel is doing its job right, "it almost feels like the perfect habitat for its core customers in such a way that the customer feels like the personality of the hotel is rubbing off on them." In the case of the Phoenix, a person might feel a little more funky, irreverent, adventurous, cool, and young at heart for having stayed there.
Each of Conley's hotels had its own personality, its own five descriptive words, and its own version of "identity refreshment" for its guests. "We realized we were not in the boutique hotel business," Conley said. "We were in the business of refreshing the identities of our customers."
What is Your True Essence?
Conley's second tip for hotel leaders was to discover the true essence of their business.
"The most important question any business leader can ask is, 'What business are we in?'" he said. It was by asking this question repeatedly at Joie de Vivre that they came to understand they were in the "identity refreshment business." He did the same thing again at Airbnb, which led the company to discover its core identity as being in the "belong anywhere" business.
His third tip to hoteliers is to use feedback as their compass and to adopt a customer feedback loop that creates constant, instant improvement in their product or service. One problem in the hotel industry is that it doesn't have a very good feedback loop, he said. He was able to address this issue at Airbnb by creating a peer-to-peer review system that both host and guest have incentives to use, but hoteliers need to figure out the feedback loop that actually works for them.
Conley concluded by saying that when a brand clearly defines who they are, they can meet their customers’ desires before the customers even know what those desires are. That is how brands can ensure that they are part of the future of hospitality, and not collateral damage of the latest industry disruptor.