Innovation. Innovation, innovation, innovation. Did you feel that?
As the word “innovation” has migrated from Silicon Valley into marketing materials worldwide, it may have entered the realm of triteness. The ex-buzzword triggers eye-rolling because of how much has been promised under its banner relative to what it has actually delivered.
Few sectors love innovation as much as real estate.
WeWork promised innovation of the office (and later schools, apartments, banks and life itself); infused with billions of dollars, it innovated itself to a legendary implosion.
Brooklyn’s Industry City enthusiastically talked up the “innovation economy” until its ambitious rezoning was blocked by the local City Council member. Every smart light switch or energy-efficient appliance promises an apex of synergies, profits and customer satisfaction.
But some of that optimism is waning, particularly among the techy startups on the vanguard of the war against the status quo.
In recent weeks, layoffs have hit disruptive darlings like Zumper, Side, Sonder and Better.com. Compass, the poster child of innovation in brokerage, turned $2 billion in investments into a $1.8 billion market cap.
The party isn’t over, but after a long rave, the deejay is starting to play the slow jams.
Amid this uncertain world for innovation, the Independent Lodging Congress hosted its Indie Cultivate event, a hospitality and travel startup pitch competition. More than 100 investors, founders and spectators gathered at the Wythe Hotel in Williamsburg for a Shark Tank-style competition to determine the One True Innovator.
Attendees certainly were innovative in their attire — there couldn’t have been more than five suits in the room. Instead, there were plaid button-downs and patterned jumpsuits, corduroy hats and polo shirts.
ILC founder Andrew Benioff (Phillies cap, blue jeans, T-shirt with blazer) kicked off the event with Bashar Wali (blue-and-white striped work coat). The two traded jokes about the latest Drake album and suggested “this tribe” was “nothing less than a family.”
The first round of pitches featured three startups, including exercise startup Modwell Design and independent hotel network Altered. The winner of the round, Course Restaurant Guide, was founded by Josh Sapienza, a hospitality industry veteran.
Sapienza led with the thesis that “hospitality is just mass personalization,” and his app certainly offers that. Using 37 “taste quizzes” and restaurant ratings, Course recommends restaurants for users in new cities. It also generates a ton of valuable, sellable personal data.
Course is meant to replace the restaurant lists that hotels offer guests, and while it won’t make concierges obsolete, it offers some improvement over the norm. The app goes granular: “Do you restrict or eliminate honey, agave syrup or maple sugar from your diet?” asks one of more than three dozen account initialization surveys.
Read more
Commercial
New York
Short-term rental startup Sonder cuts staff 20% after poor public debut
Residential
New York
Home equity financing startup Point raises $115M Series C
There wasn’t as much discussion of the macro trends that are plaguing hospitality and tech startups. There’s a labor shortage, and the people willing to sweep lobbies and schlep luggage want more money to do it. Inflation is on the rise. So are interest rates.
“The environment is tricky,” Brian Sparacino, president and CEO of Rebel Hospitality, said in an interview. “You’re trying to solve for all of the above.”
Judging a later round of pitches, Sparacino fell for Sensible Weather, a hotel-booking plugin that reimburses travelers if their plans get rained out. The company, founded in 2019 by climate scientist Nick Cavanaugh, recently announced a $12 million Series A funding round. Sparacino plans to roll the service out across his 3,000-key hotel portfolio.
“I don’t think that innovation in hospitality is curtailed under the current environment but, on the contrary, that it is actually flourishing,” Benioff said in an email. Indeed, there’s some cause for optimism in hospitality: A new report from CBRE projects that revenue per available room, a key metric for hotels, will rise by 75 percent this year. The firm expects occupancy rates to reach pre-pandemic levels by 2024.
In the back of the room, four index cards lay spread out on a table, each representing an overused hospitality buzzword: “luxury,” “personalized,” “connection” and “wellness.” Attendees were encouraged to write their own definitions for the words on Post-It notes — an opportunity to tweak the language, but not to innovate it.
Correction: The name of the Independent Lodging Congress was misstated in an earlier version of this article.