West Elm goes beyond retail with new boutique hotels

The hospitality industry is experiencing a renaissance, giving travelers more options for lodging than ever before. But while big hotels and home sharing services like Airbnb duke it out for travelers, a new brand of boutique hotel is poised to disrupt conventional options — giving customers the best of both worlds.

On Monday, Brooklyn, NY-based West Elm announced plans to open hotels in five major cities around the US. The home furnishing company, which is part of Williams-Sonoma (WSM), is partnering with DDK, a hospitality management and development company, to bring boutique hotels to Detroit, Minneapolis, Charlotte, Savannah and Indianapolis by the end of 2018. For consumers, the new hotels will offer all of the convenient amenities of a hotel, as well as the local and homey feel of an Airbnb.

According to Peter Fowler, head of West Elm’s hospitality and commercial furniture businesses, the company sought out cities and locations that were constantly overlooked despite their unique vibes. “Places like Detroit just have such interesting downtown rejuvenation, and our location there in midtown has a great story,” Fowler told Yahoo Finance. “There is a resurgence to rebuild neighborhoods and we’d like to be one of the early adopters in those areas.”

Boutique hotels are known for their original decor, intimate settings and unique amenities, and while major chains still dominate the lodging market, big brands like Hyatt and Hilton are forming their own boutique properties in order to attract younger travelers. It’s competitive, but according to IBIS World, the hotel industry will continue to grow for the next five years — which means there is room for new players like West elm.

Looking to compete with other value brands, Fowler predicts room rates will be between $175 and $400 per night at West Elm Hotels. He notes that final pricing will depend on the city and size of the room. Each hotel is expected to have 100 to 150 rooms, typical boutique hotels have anywhere from 10 to 100 rooms.

The idea for hotels was sparked three years ago when West Elm was looking for ways to extend the brand and its presence beyond retail. It started with West Elm Workspace, which highlights furniture designed for communal workspaces. After creating experiences for customers at home and work, West Elm wanted to reach people when they were away home.

“We’re passionate travelers ourselves, so it’s just natural for us to want to create a 24-hour experience for people to see the world through the eyes of West Elm,” said Fowler.

While the hotels will be decked out in West Elm – which sells contemporary and modern furniture — that doesn’t mean the spaces will feel like a showroom. About 60% of the hotel will be custom designed for each location, and the retailer plans to feature local artists and themes in each property. With that said, they do plan to provide easy access for customers to purchase items if they fall in love with say, a dresser. For reference, a sofa from West Elm can cost anywhere from $999 to $1,999. A dresser will cost you at least $899.

West Elm currently has a deal with Springhill Suites by Marriott, where rooms in certain locations are decorated with exclusive designs from the company. Fowler says this relationship won’t be affected by the new boutique hotels.

“We’re going after unique, downtown locations, and the Springhill Suites are not typically located in those markets,” he said. “ For this reason, we don’t see a conflict of interest.”

West Elm’s foray into hospitality isn’t the first time a retail store has showed interest in the hotel business. In August 2015, Restoration Hardware announced plans to open a 14-room hotel next to its flagship store in New York’s meatpacking district. An opening date has not been announced.

For West Elm, the challenge now is incorporating its design concepts with all of the amenities guests are used to. From technological innovations to streaming entertainment from your own device, Fowler says his team will explore all options to make the simple things in life even better.

“Our goal is to really achieve whole-hearted hospitality,” said Fowler. “To fulfill all of the basic needs, but also adds that extra little kick that makes you want to come back and replay the story.”

Brittany is a writer at Yahoo Finance.

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