A Revolutionary Pivot or an Unscalable Experiment?
By RDG Principal Matthew Chambers
Only have ten seconds? The pandemic continues to foster innovative ideas. There's a luxury hotel chain offering subscription-based access to 60,000 different trips all over the world so that you can take your Zoom call from a socially distanced African Safari or poolside in the Maldives. Want to get away? Keep reading.
If you're like me you've probably got a subscription to Netflix and HBO, a recurring gym membership, and maybe even a monthly dog food delivery service (thanks, Amazon), but have you "checked into" a hotel subscription?
I can hear you now, "Matt, we're in the middle (end?) of a pandemic. I'm not looking to travel anywhere but to the curbside pickup at the local grocery store." I absolutely understand that, but vaccine distribution is on the rise, and hotels are trying anything to stay afloat right now and have come up with quite an interesting business pivot.
Large hotel brands like IHG, Marriott, and Accor are some of the major ones that are thinking outside-the-box and have launched (or are considering) monthly payment plans as remote workers seek to get out of the house and can seemingly work from anywhere. For monthly rates ranging from $1,100 in Singapore to $1,970 in Indonesia, IHG guests can utilize workspaces, rooms and facilities under a new "work from hotel" package.
This service isn't just limited for the corporate traveler though. In September, the luxury travel group Inspirato went completely subscription based. For $2,500 per month, subscribers can enjoy thousands of different luxury trips all over the world without ever having to worry about nightly rates, overbookings, taxes or fees. As someone with a wife, two kids under two and two pups, this probably isn't an ideal solution, but for a lot of people the possibilities are endless.
Again, the hotels understand the current pandemic environment, and they assure that they are upholding the highest of standards for sanitizing and cleanliness, but it's also a great time for this experiment. Hotels are struggling with maximum capacity restrictions and travel bans, just like many other businesses, but people can work from anywhere right now. Thus, barring any travel restrictions, IHG and Inspirato realized that there's a market for people that would rather socially distance themselves on a penthouse balcony in Switzerland or lead a Zoom call from the private pool lounge chairs than from their stuffy upstairs office. A truly innovative concept!
Your next question: this is all great, but what's all of this have to do with economic development? Obviously after last year we all need a vacation, but it's also no secret that 2020 turned the world upside down, and as Plato said, "necessity is the mother of invention". What I'm saying is, disruption creates space for entrepreneurial thinking and, today, the Covid-19 crisis is that disruption.
As economic development leaders, you've got to remember to stay positive, diligent, and always look for ways to assist the businesses in your community to help them find innovative solutions. Business retention and expansion are key cornerstones to the work that you undertake. Being able to offer the companies you meet with novel solutions or assisting with business pivots or helping to make new mutually beneficial connections could truly make the difference between the business staying in your market or going away completely.
Additionally, McKinsey & Company recently reported that one ripple effect of the pandemic in the US is a new wave of innovation and the launching of a generation of new entrepreneurs. Economic developers need to be ready to support these companies as they navigate the market ecosystem. Furthermore, the crisis has created an imperative for companies to reconfigure their operations, and those that embrace that opportunity to the fullest will be rewarded. An important role of economic development professionals will be to help businesses embrace this disruption so that we can all come out better on the other side.
Even RDG pivoted. In the onset of the pandemic, like any other business at the time, RDG could only guess what the future held. One thing was certain though, we knew we needed to develop a new innovative model to make our services more attainable to EDOs and chambers of all sizes as they sought to obtain much-needed resources. We predicted public sector dollars would be diminishing, at least in the short term, as tax revenues dropped. That's when we launched AccerRai$e in an effort reach as many communities as possible through a hybrid engagement funding model.
Remember, we're all in this together, but it's the organizations, businesses, and even cities that are able to embrace the situation and adapt that will be successful.
If you made it this far, thank you for reading. If you've got another second, we'd love to hear about some interesting business pivots in your community. So hit that reply button and make Rob's inbox explode.
See you in Belize!
Authored by Matthew Chambers.