Smart hotels Israel : the making of a smart and small hotel chain

One of the basic principles of business is the idea of economies of scale. This is a simple concept that states that a larger company enjoys a more efficient cost structure than a smaller one. The percentage of fixed costs is lower, overhead per unit goes down and the company’s bargaining position with suppliers, clients and other interested parties improves.

My experience in the hotel business has taught me that the advantage is stronger in  hotel chains.While it is true that a hotel needs to have a minimum number of rooms to be profitable, a small hotel of 30-40 rooms can also make a profit if it is managed wisely. However, hotels that are organized in chains can share costs like marketing, sales, supplies and more, and so make each one more efficient.
On the other hand, being part of a chain also has its drawbacks. Many guests today are looking for a unique experience that they cannot find in other hotels. One of the challenges of the business is finding the balance between keeping a hotels uniqueness, that gives a marketing advantage, and taking advantage of economies of scale, that give a business advantage.

Copeland Hospitality has had the priviledge to work with the Azulay family who  manages Ayala Hotels.Over the past years  the business has expanded beyond established Ayala Tours and their properties now include several small hotels including Montefiore and Jerusalem Inn in Jerusalem and Ramon in Mizpeh Ramon and soon to come Eyal Hotel also in central Jerusalem.. We have been working together in developing and repositioning these properties in a chain.
Our work together started with creating a coherent brand and concept. The goal was to create a brand that would enable marketing the hotels together and sharpen the message to the target audience : tourists (most guests in these hotels are leisure travelers), relatively young with limited budgets.

After much thought, we pinpointed a few points that unite all the hotels:

• centrally located and within walking distance from major attractions such as the old city and food market
• small hotels – a size that can create an intimate feel for guests but still remain profitable
• attractive price
• efficient service
• comfortable hotels that have everything you need but lack extras such as pool, spa, lounges etc. that have upkeep costs that reflect in room rates.

Drawing inspiration from doing everythng smart; location, few features , value price and tech savvy services,we chose the name SMART for the new chain: When you choose these hotels you are making a smart choice.
A hotel in the right location, the right look, the right size and the right size : smart in every way.
Of course this is also an advertising message to the customer. We are actually saying to them “smart customers choose smart hotels, so if you are smart you have to pick us”

The new look: small smart hotels

We addded to the team  a graphics agency that created a creative look and feel and a visual story for the new brand. Here you can see some examples of the visuals that reflect the sophisticated, clean simple concept of the chain.

The new logo: clean and simple lines. Below the chain logo the name of each hotel appears in color. A different color for each location.

Back of business cards: the  feel of the text is meant to allude to the location of the hotels right in the middle of the action.

The hotels were renovated to fit the new brand. Designers added new color, lighting, textiles, styling to create a younger and more vibrant look. My experience in large international chains was actually an advantage here, and helped me outline new work practices and procedures for this small local chain. We succeeded in joining functionality and design, and between maintaining a unique guest experience and improving the bottom line.

Jerusalem Inn: Dining room

Montefiore Hotel: guest bathroom
Smart Hotels are an example of a small chain that is succeeding in creating a umbrella brand that reflects also the individuality of each hotel.  For example, I recently wrote about my work with Indigo Tel Aviv (link), owner by a huge chain (intercontinental) that has a boutique feel through the use of local landmarks in its design (in this case the diamond exchange and Shenkar school for fashion design. The more chains utilize this way of management, they will succeed in improving their bottom line as well as creating an experience that will keep guests coming back.