Summary: As the place where first impressions are codified by guests, the lobby experience must be strong. Thinking broader, a great lobby also contributes to a hotel’s overall reason to visit which in turn supports occupancies and higher nightly rates. Moreover, a vibrant lobby is a space where visitors will want to linger, resulting in greater food and beverage sales.

When it comes to any renovation or property improvement plan (PIP), the name of the game in today’s ever-uncertain and highly parsimonious hospitality landscape is ‘value engineering’ in terms of being as cost-effective as possible with any capex. This often means that all expenses have to be justified on a financial statement in terms of their direct and quantifiable attribution to revenue performance, reduction of opex or increase of net contribution.

And yet, hotels don’t quite work that way. Even as data scientists, revenue managers and the like extol their metrics as the be-all and end-all of operational success, true hospitality nevertheless perseveres as an artform. Our business is one that can never be precisely measured because we deal in human emotions, through what we all refer to as the guest experience.

As a result, there are often expenses that may appear illogical through the scrupulous eyes of the numbers people or a price-sensitive owner, without any immediate or traceable impact on KPIs like TRevPAR or GOPPAR save for how these upgrades will make a guest feel. The lobby is one such area of supposed irrationality, but it deserves a second thought at any property that’s starting to allocate funds for a renovation.

Numerous properties that are already in, or aspire to be in, the hospitality hall of fame have this attitude. One program that we have going at our consultancy is called ‘The Mille Club’ where we apply learning from those hotels around the world that are already charging over a thousand dollars per night (‘mille’ derived from the Italian for a thousand) to help other brands figure out a strategy for growing their rates to this level and beyond. Without exception, every Mille Club member property has an amazing lobby experience, and putting a plan in motion for creating a similarly elevated ambiance at other hotels is a project that we strongly advise all our clients to undertake.

To convince owners regarding the capex required to make a great lobby, we tell them that sometimes you have to spend a little more in order to make a lot more.

Setting the Tone
Everyone has heard or understands at their core that first impressions are everything. You only get one. In hotel parlance, we call this the ‘sense of arrival’ to encapsulate the entire onsite arrival from the exterior drive up to the porte-cochere, the uniforms of the valet team and the manner in which the bellhop assisted with the luggage through to the lobby décor, the artwork, the music billowing out from the adjoining bar and the friendliness of the front desk team during check-in.

Every element here counts, and the best hoteliers sweat over making each detail perfect and wholly congruent with the hotel’s theme in order to elicit a given mood from the visitors, be they travelers with a room upstairs or locals looking to hobnob. The lobby’s appearance, layout, flow, lighting, seating, acoustics and even smell (think fresh flower arrangements or a branded scent) all play a role in setting the tone for a great experience throughout the guest’s stay.

Notably, the word ‘tone’ requires some elaboration in terms of its use borrowed from music. Taken straight from Wikipedia, a musical tone is a steady periodic sound characterized by its duration, pitch, intensity and timbre. What this means for hotels is that the first impression establishes the emotional directionality and elasticity for the remainder of the trip. A great first impression sets the bar high so that the guest is excited and intrigued, while a poor or unremarkable opening encounter puts the guest into an apathetic or defensive mood that is often hard to recover from.

As it relates to the notion of the intangibles within a hotel, a guest who is excited about a vibrant lobby atmosphere is more likely to linger there, more likely to order a cocktail before heading out on the town or more likely to seek out a reservation at the hotel’s onsite restaurant instead of going onto Google to search out the nearest hotspot. The opposite is also true; if the lobby doesn’t have a vibe or doesn’t invite a social scene, then it will be sizably harder to nudge visitors to stick around and spend. We would argue for one scarier step further in that gloomy lobby ultimately discourages guestroom bookings.

A Strong Reason to Visit
What the two of us classify as a hotel’s ‘reason to visit’ goes one step further than the onsite first impression by considering the engagements that a potential customer has before they arrive and what motivates them to book in the first place. Outside of pure price elasticity for pure heads-in-beds operations in the select service and economy segments, what is the core emotional reason for why a guest has selected your property?

While this ‘big why’ will always have the throughline of ‘location, location, location’ for any entity in commercial real estate, hotels are a bit of a unique breed. That reason to visit may indeed be a beach or proximity to the convention center, but there’s typically something more – the je ne sais quoi as the French have so eloquently coined for these seemingly irrational contributors. These intrinsic elements can include but are not limited to a world-class spa, a scenic golf course, a cool pool scene, impeccable guestroom amenities, a Michelin-starred restaurant, curated activities, a fantastical bar, a tony rooftop, a wondrous lobby experience and, yes, old-fashioned guest service.

Within all these components that comprise the overall guest experience, it is difficult to single out the lobby as the key determining factor for why a guest chooses your hotel versus the one across the street or why a guest is willing to pay, for instance, a hundred dollars more per night to have immediate access to your lobby as their temporary homebase. Nevertheless, without that gregarious lobby experience, would that reason to visit be quite as strong?

To circle back to the Mille Club, peruse the literature for any hotel with an ADR north of a grand and you see that the lobby is typically an architectural marvel in its own right used to market the property. Thematically, some go the more classically lavish route with scintillating chandeliers, ornate marble and gilded balustrades, while others go strive more towards nouveau riche with postmodern finishes and artwork that no one really comprehends. Irrespective of the tactics, the emotional gut punch is always the same: this is a ‘bucket list’ property befitting of a luxury lifestyle and a place that will help you self-actualize on a deeper, limbic plane. In short, the splendor of the lobby gives the onsite experience meaning and that meaning warrants astronomical nightly rates.

If you were to try to quantify this relationship, perhaps the place to start is by reading into magazine editorials, travel writer columns and guest reviews. Check to see how often the lobby is referenced as worthwhile or a central component that justifies a hotel’s nightly rate. While you can evaluate this anecdotally by glancing through some editorials, reading some top-ten lists and scrolling through TripAdvisor, nowadays one might deploy an AI-driven sentiment analysis tool to interpret the multitude of hotel reviews on the internet to spit out an answer that basically suggests, “Yes, a lobby’s design has an impact on occupancy, nightly rates, media impressions and ancillary spend.” Prove us wrong.

To Crowd or Not to Crowd
The basis of crowd theory is that people want to go where other people already are. This isn’t necessarily because said people are insecure by trying the novel or that they are boringly average. Rather, the presence of a crowd – a scene, if you will – is a mental shortcut that indicates the place is actually good. Hence, creating a scene in your lobby through an orchestra of different tactics and capex serves as a heuristic for visitors to positively evaluate your business, both by locals seeking out their libation as well as by hotel guests looking for reassurance that they are in for a great night’s stay.

While this principle is as old as the human race itself, as we progress through the 2020s, there are new evolutions afoot that will influence the future of lobby design. Namely, we must now take into account the digital nomads, the bleisure segment and work-from-anywhere crowd who are knowledge workers enabled by flexible company policy and fast internet connectivity, allowing them to earn their bread while living almost entirely on the road.

That road can be a short-term rental; it can be a cruise ship; it can be a campsite with a Starlink; and for our purposes, it’s our duty as hoteliers to convince these emerging cohorts to select our properties. First and foremost, solid WiFi is obligatory as are accessible power outlets. Next is comfortable seating, as lumbar discomfort is an easy way to dissuade lingering.

But while these design elements also pertain to nonworking visitors in your lobby or at other facilities on premises, maybe it’s best to take a step and ask whether or not you want to designate your lobby space as a green zone for remote workers. Might their somewhat-antisocial presence detract from others opting to sit down and order a beverage?

This is an important question to answer during the opening stages of a new development or PIP as it will influence the layout and furnishings. While we cannot answer this because the solution is different for every hotel and every brand, we will close with this olive branch: consider carving out a secondary lobby or living room area for these types of guests.

For the former, this might entail a recessed alcove tucked away from the main thoroughfare of the path connecting the entranceway to the front desk. The latter is a big more upscale and requires some extra operational support. Both of us are big fans of the ‘living room’ which is a quieter, members-only area wholly separate from the public lobby where snacks and beverages come free of charge. Those members can be any guest with a valid room keycard, only those guests staying in a premium-tier room or as something you sell on a subscription basis. Regardless, a living room should exude privacy and exclusivity; a place where people can concentrate on getting real work done or also engage with likeminded peers should they so desire.

From a pure cost-efficiency perspective, the living room concept, while an opulent lobby, is irrational. Many offer alcoholic refreshments gratis, representing a huge expense, and yet the presence of that living room provides prospective guests with a strong reason to visit that eventually, albeit circuitously, supports healthy occupancies and rate growth. To reiterate, sometimes you have to spend a little more in order to make a lot more, and your lobby is definitely not an area where you should cut corners.