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Why Home Furnishing Retailers Are Getting into the Hotel Business

Have you ever wanted to buy an accessory or piece of hotel room furniture only to find out that item is not for available for purchase? Two home furniture retailers are going to make buying not just one item, such as linens or beds, but the entire room possible as they expand beyond their sales floors to roll out a chain of company-branded boutiques where guests can shop for furniture and decorative items while staying at their properties.

[See: The 50 Best Hotels in the USA 2017.]

Restoration Hardware will open a boutique hotel in 2017 and West Elm will debut properties around the U.S. in 2018, allowing guests to fully experience what it's like to live with their furnishings during their travels. "The idea of a shoppable hotel is super exciting for a lot of people," says Peter Fowler, vice president of hospitality and workspace at West Elm. With that in mind, here's why retailers are entering the hotel space.

Boutique Retail Hotels Are Coming to a City Near You

While Restoration Hardware has not publicly announced plans for a hotel concept, NYC & Company, the destination marketing bureau for New York City, lists the Restoration Hardware Hotel opening in 2017 on Gansevoort Street in the trendy Meatpacking District of Manhattan. The 14-room hotel will host a restaurant and act as a showroom and "experience center" for the company's products, according to the tourism bureau.

Last fall, West Elm announced its foray into the hospitality business with five hotels opening in cities across the country in 2018. The boutique hotels will open in five cities, including Indianapolis, Minneapolis, Detroit, Charlotte, North Carolina, and Savannah, Georgia, because each destination has experienced a major urban revitalization in the last 20 years. "These cities all share in common that people around the country have heard about these places and are fascinated to find out more," Fowler says. "We're creating the set for their storytelling," he adds.

Each of the West Elm properties will feature between 100 and 150 rooms and offer amenities such as rooftop bars and pools, restaurants, game areas and gardens in interesting buildings and urban centers. The Indianapolis outpost will be located in a former Coca-Cola bottling plant in need of renovation; meanwhile, the Savannah property will be adjacent to the famous Forsyth Park along Drayton Street.

The Business Model

West Elm, which currently has more than 100 stores around the world and is the fastest-growing brand within the Williams Sonoma portfolio, says its hotels will be an extension of their brand, which aims to reach customers at home, work and away. While their home furniture brand has taken off, the company has also launched a successful commercial line to target office design and are now targeting customers during their travels as well.

Restoration Hardware and West Elm are not the first retailers to expand their business model into the hospitality business. Jimmy Buffet's Margaritaville brand launched hotels across the country, including a Pigeon Forge location in Tennessee in a popular development called The Island, expanding beyond their popular restaurants. And Hard Rock might be a more widely recognized example of translating restaurant success into a line of hotels with other examples, including Virgin Hotels, an extension of Sir Richard Branson's airline and Virgin brand, and Baccarat New York, a boutique filled with lavish interior spaces showcasing the brand's iconic Baccarat crystals.

[Read: The Best Free Hotel Amenities and Experiences.]

But West Elm and Restoration Hardware are taking a different approach. West Elm's vision differs in that it is "probably one of the only scalable models for a brand to grow that is not a franchise and that is really driven for the right reasons of creating credible hospitality experiences," Fowler says. The company has partnered with the hospitality management company DDK, which have run some of the most renowned food and beverage offerings at hotels around the world, Fowler adds.

In-Room Retail

What will it be like to shop your hotel room? At West Elm Hotels, the shopping component will not be overdone, Fowler emphasizes. "It's an experience that someone can sit in and then jump online and buy if they choose to," he explains, highlighting that there will be no price tags or heavy branding in the room. "It's not a catalog experience," he adds, noting that only if a guest inquires will they be directed to that product. Plus, any purchased products will be shipped directly to guests' homes rather than the guest taking the item home with them, he adds.

Approximately, 80 percent of the furniture and decor for each of West Elm's new boutique hotels will be custom-made and inspired by the individual city. "We're using Indianapolis as an inspiration bank for a new collection," Fowler says. And in Detroit, the company drew on the spirit of the city, which Fowler describes as "a very textured mix of industry and the arts." According to Fowler, "that sort of energy really inspired the furniture we're designing for Detroit." The company is also drawing on Detroit's resilience, global influence, ingenuity and invention, he adds. "Our goal is to draw on all of that inspiration and create unique collections for people," he says.

[See: 10 Innovative Hotel Room Designs.]

The Experience

How will the guest experience differ than a traditional hotel? Guests likely will not notice a dramatic shift. The properties are comparable to other boutique hotels, though Fowler points out that West Elm Hotels will be one of a few boutique properties in many of these cities. The West Elm Hotels will focus heavily on top-notch service and a locally driven guest experience. "We are creating a lot of touch points, such as a bar entertaining experience in the room to custom furniture to how we're going to connect the local community to guests," Fowler says. "There's a huge shift that's happening as we see work-life, travel and leisure blending and merging and the needs really molding together," he says. "We think we are uniquely placed to be a part of that travel experience for people," he adds.

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