Pinsker: What was it about how people traveled, say, 20 years ago, that this experiential component just wasn’t on hotel owners’ radar?
Weinstein: Some will say it’s a response to new competition from the sharing economy; 20 years ago, people weren’t booking on Airbnb. But I like to think that it’s just more of an evolution of consumers’ sophistication: Because of the internet, people are just more informed and aware. And it’s somewhat of a competitive thing—it’s the industry recognizing what’s working, what people will gravitate toward, after the success of those boutique hotels.
Pinsker: But, going back further into the history of hotels, do you think that there was a time when people were truly just looking for, to use your phrase, “a box”?
Weinstein: I don’t think so. I think it’s about how the big companies scaled up decades ago. When you’re trying to build 100 Hiltons, it’s a lot easier to build something formulaic than to make each have its own feel and look. Now they know they can’t get away with that anymore. But they could in the ‘70s. Franchising meant building boxes, which were easily replicable and had a good return on investment.
Pinsker: You mentioned Airbnb. Is there a consensus on how hotel companies feel about it, and rental platforms like it?
Weinstein: I’m not sure, and some of the executives in the industry aren’t sure, if Airbnb is really hurting the industry too much, because the industry has been performing so well. But at the same time, they recognize an alternative is emerging. Not only is there Airbnb, but in the luxury space, there’s a site called One Fine Stay and another called Oasis, and people who have second and third houses can rent them out without having to undertake the effort themselves.
So that has the industry trying to figure out, “Okay, how do we offer the same type of local experience that one would have in a home?” And that goes back to the local experiences I was describing earlier.
Pinsker: Are there any other big changes in the past decade that the industry is still adjusting to?
Weinstein: I think for years and years, consumers saw a price for the room, and figured that was just the price for the room. But price changes a lot, based on demand. And consumers now, because of the online travel agencies, the Expedias and the Pricelines of the world, have become much more educated about price. But before that, I think they had no clue that they had options.
Pinsker: The hotels probably liked it that way.
Weinstein: They probably did, but the hotel industry created the beast. They’re the ones who gave inventory to the likes of Priceline and Expedia—to simplify a bit, if they hadn’t done that, those sites wouldn’t exist. It was an interesting confluence of events back around 9/11, when the internet was really getting rolling, and the hotel industry was really struggling. And so they were looking for every way to sell rooms, and these sites gave them a different distribution mechanism.