CitizenM and Life House redefine hotel relationships in their own way

quick take

CitizenM is willing to take a profit hit to attract long-term guest loyalty, while Life House is looking to limit amenities for guests to maximize profits for owners. The sustainable business model award goes to CitizenM.

dennis schal

CitizenM and Life House are anti-hospitality in their approaches to hotel-guest relations, and their strategies also differ from each other.

Ernest Lee, director of growth at CitizenM, said traditional hotels have things backwards when they entice guests to prove their value to brands for greater rewards. Instead, Lee argued, CitizenM is first trying to prove its value to guests to earn long-term loyalty over a 10-year period, for example.

That’s why CitizenM recently launched its CitizenM+ membership program for $120 per year. Among its features, the subscription offers 10 percent discounts on “free” stays and late checkouts, among other perks.

While that may sound like a money-losing proposition, Lee said CitizenM’s short-term sacrifice will lead to long-term gains in guest loyalty. He compared it to people who thought Amazon was crazy for offering free shipping for Prime members.

CitizenM, Lee said, focuses on the “mobile citizen,” whether the guest is traveling for business or pleasure, and seeks to learn how to provide better service in an era of decentralization where people can live and work in any place.

Meanwhile, Rami Zeidan, founder and CEO of Life House, said that although the company does have some branded hotels, it is mostly a business-to-business game for hotel owners, trying to find ways for them to make maximum profits. Life House concentrates what to give guests at scale and what not to give them.

Life House’s Zeidan and CitizenM’s Lee discussed “Getting Ahead of Future Lodging Changes” with Skift Senior Hospitality Editor Sean O’Neill Thursday at the Skift Future of Lodging Forum in New York City. York.

Software is a huge competitive advantage for a property, Zeidan said, and Life House tries to eliminate finance departments and revenue management staff, say, in a hotel to extract costs. Life House handles these functions so frontline employees on the property can do what they do best, he added.

Life House tries to automate hotel operations so property employees can “clean rooms, put on a smile.”

Life House does not recruit from the hospitality industry and their revenue management people often do not have revenue management experience. The company is creating software to automate revenue management and make it easier, Zeidan said.

Lee is CitizenM’s chief growth officer and said other hotels should consider similar positions because these roles can improve options for long-term growth rather than simply focusing on annual reports.

Life House’s Zeidan said independent hotels will find it increasingly onerous to join a big brand due to high franchise fees. The “TripAdvisor effect” and social media means brand loyalty will decline because guests know in advance what they’ll get at the property, he said.

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