citizenM: Reinventing the hotel chain model
Launched in the Netherlands in 2008, citizenM hotels offer “affordable luxury” to business and leisure travelers who frequently move between cities for professional or personal purposes. This informed and connected clientele of “mobile citizens” appreciates design, modernity, and comfort, but might not have the budget or desire to spend big money for a five-star hotel, and has been largely forgotten by the traditional hotel chains. Michael Levie, co-founder of citizenM, explains how citizenM won over these clients by shaking up the codes of his industry.
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Before starting citizenM in 2008 with his partner, Rattan Chadha, Michael Levie had over 22 years of experience in the operations management of multiple international hotel chains, including Sonesta and NH Hotel Group in the United States, the Caribbean, the Middle East, and northern Europe. His career path has given him an invaluable perspective on the practices of his industry.
In the 10 years of its existence, citizenM has seen remarkable growth. After the opening of its first hotel in Amsterdam, it quickly expanded in target cities, first in Europe (Glasgow, London, Rotterdam, Paris, Copenhagen), then in the United States (New York), and today in Asia. It has received multiple awards for its groundbreaking concept and employs over a 1,000 people across the globe. The secret to its success? Breaking from the usual practices of the hotel sector.
An overly standardized industry
Throughout his career, Michael Levie, cofounder of citizenM, noticed how the services offered by established hotel chains were extremely similar. Each one offered the same kinds of rooms, reception areas, front desks, restaurants, and bars, up to and including the list of supplementary services available at an extra charge. These codes, which had been in effect for over 50 years, had never been challenged. Where did this resistance to change come from?
“If we look at managers at the same level across industries, then people working in our industry are less educated than those in others. Internal promotions are given on the basis of experience, not diplomas,” Levie explains. The result: an environment less inclined towards change and innovation. “Our profession has made little progress, and changes have been marginal. It has been particularly slow to adopt new technologies and take advantage of the ways in which data can improve its procedures.”
Levie saw an opportunity to execute radical changes and respond to the needs of a neglected market. “I had no trouble finding partners from different fields who shared my views,” he says. Rattan Chadha, his partner and the founder of the ready-to-wear brand Mexx, was also struck by the lack of quality hotels for this group of sharp-eyed, budget-conscious travelers. “If you want to reinvent an industry, you’ve got to put together a solid starting team, one where each member is convinced that the lines of play need to be shifted,” Levie emphasizes.
Focusing on client needs
Levie and his partners identified the areas that needed to be reworked by putting themselves in the shoes of their clients, the aforementioned “mobile citizens.” “We began by concentrating on their needs. We reexamined our industry’s practices from their point of view and that led to us making numerous changes.”
Excerpt from Business Digest N°294, March 2019
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