Is it possible to innovate in the hotel industry, a business fraught with failed ventures and razor-thin profit margins?
CitizenM, a "budget luxury" hotel chain founded in Amsterdam in 2009, seems to think so. The rapidly-expanding brand markets high design at a low price, claiming to reinvent the way we "sleep, sleep, work and play."
At CitizenM’s newest hotel, which opens near the Tate Modern in London on July 4th, visitors will enjoy Vitra-curated furnishings, iPads that control every aspect of their rooms, and free meeting rooms outfitted with flatscreens and blackboard paint. Rooms, which feature massive beds and sleek Corian fixtures, will run for the rock-bottom price of £99-199. (Granted, that’s not cheap, but for London, it’s quite reasonable.) A design bookstore, and art commissioned from young collective AVAF (Assume Vivid Astro Focus), Jeroen Jongeleen and Mario Testino, adds to the hotel’s art world cred.
While all the bells and whistles are certainly cool, what CitizenM is actually reinventing is the business model. My first thought, upon reading about the brand, was "how the hell does a young budget hotel chain expand worldwide in three years?" And furthermore, how do they charge so little for rooms?
CitizenM is doing to hotels what IKEA did for furniture: using prefabrication to lower costs, using a process called Industrial, Flexible, and Demountable. Every room in a CitizenM hotel is pre-assembled in a factory owned by the brand in Holland. Designed by the Amsterdam architecture office concrete, the rooms arrive on-site nearly complete. Each hotel (so far, Amsterdam, Schipol, Glasgow, and the two forthcoming London locations) is made up of hundreds of identical rooms that have been stacked to create the finished building. It’s a process that was pioneered in the 30s and 40s, and is widely used in the home building industry.
"We like to think that citizenM is an evolution in the hotel industry," the company wrote in 2008. "But since citizenM likes to be a little bit modest, we won’t shout about it. At least not too much." It’ll be interesting to see if their model will reach a point of diminishing returns, where shipping costs and real estate becomes too expensive. The company has plans to open a Times Square location later this year, and is unsurprisingly focused on expanding into Asia.