Mary Beth Cutshall knows design can make or break a project. The nearly 30-year hospitality veteran—who was profiled as the Exit Interview subject in Boutique Design’s January + February edition—spent over half of her career in operations, food and beverage and sales and marketing at both the property and corporate levels before making the move into business development.
“I think designers are an important part of the development team. They bring white boxes to life with color, texture, form and visual art …” says Cutshall, who now serves as Hospitality Ventures Management Group’s (HVMG’s) senior vice president and chief business development officer. “As a person who runs the numbers and oversees pro formas, the project has to make financial sense short term and long term, which means the design choices have to have hold up as to not impact the next buyer and support the exit plan. A designer can be indispensable by making design choices with both the short- and long-term goals in mind.”
Read on for web-exclusive responses from Cutshall on the relevant visual trends and social issues the hospitality industry needs to understand to succeed in this rapidly evolving sector.
What types of hotel assets are on the top of your wish list? What markets should investors want to be in, and which should they steer clear of (at least for now)?
My 2018 target list includes both full-service and select-service portfolios and individual assets through value-add acquisitions and additional third-party management assignments with existing and new capital partners. We’d also be interested in possibly acquiring a management company if we’re presented with the right opportunity and the organization is a cultural fit.
Regarding which market an investor should target, it really depends. It’s important to understand the long-term viability of each market and spend the necessary time doing deep due diligence. Now more than ever, it’s critical to identify potential new supply threats and changes to a submarket’s demand generators. Market dynamics are shifting, companies are relocating and going off past numbers isn’t enough.
Are distressed assets something your partners are seeking? Are they still a scarcity, and if so, do you think that will continue to be the case?
HVMG has pursued, acquired and taken over value-add hotels for a couple of decades. It’s one of our sweet spots, and over time we’ve created significant investment value for our investors and partners. So, we’re always looking for more of those types of opportunities.
That being said, there are less value-add hotels available than there were 8 years ago. My team looks at many deals to find a property we think has identifiable upside and value maximization potential.
Will 2018 be the year of the hard brand, soft brand or no brand? What will differentiate the winners from the losers?
I think guests are looking for new and unique experiences, so I believe there’s the opportunity for all types of hotels to be successful in this environment if they’re doing things right. What I think will really divide the winners from the losers will be minding the true nuts and bolts of this industry: talent recruitment and professional development, a strong company culture that connects with associates, innovative thinking and the ability to exceed the guests’ expectations with service.
In terms of hotel and F&B design, what do you see as hot—and not—for 2018?
According to the HVMG Restaurants and Bars division, here’s what’s hot and what’s not:
- Design for Independence: Design the restaurant to feel like a true independent establishment. It must have a separate entrance from the hotel and be located in a dedicated area.
- The Story: The design needs to articulate the concept’s story and not be just another bar sitting in a hotel atrium.
- Open Kitchens: Let this be the star of the restaurant. The kitchen has become the new “dinner and a show” experience. Guest will linger longer, and they’ll spend more money if they do.
- Artifacts: Unique items to look at and admire behind the bar and in the dining room will also reinforce and communicate the concept’s story and differentiate the restaurant.
- Neon: It’s making a comeback. Only time will tell, but it may be here to stay.
- Local Art: Unique, local and authentic art installations on a big scale add drama and personality and will satisfy the guest’s desire to connect the local area.
- Table-Side Everything: Custom made carts for cocktails, cooking or coffee service. Originally thought of as a fine-dining detail, these days it’s making its way into more approachable and casual restaurants.
- Breakfast Rooms: Serving breakfast and dinner in the same place dumbs down enthusiasm for dinner business. If possible, try to find separate places for each.
- Mid-Century Modern: This trend has become almost as overplayed as reclaimed wood.
- Dark Spaces: Light, bright and airy is the new direction.
- Televisions: They’re eyesores behind the bar, and playing news channels 24/7 negatively changes the restaurant’s atmosphere. Don’t do it.
- Aged Brass: Too much too fast.
If owners can invest in one area of the hotel to increase value, which is it and what’s the best strategy?
I have to call out three: 1) Sleep experience, 2) bathrooms and 3) the Internet.
Guests increasingly are seeking an elevated sleep experience. These days getting enough zzzz’s is touted as being just as important to health as going to the fitness center and working out.
In regards to bathrooms, if you look at residential trends, you can see that bathrooms are a focus area. It’s a major target for home renovations and typically these trends and demands eventually waterfall into the hospitality business. Guests want an up-to-date bathroom and quality shower experience.
Last but not least is strong and consistent Internet. This is a go or no-go for repeat business. If guests are having connectivity issues, property market share will quickly decline. There’s no middle ground with this one from the guest perspective.
During the Women Leaders in Hospitality breakfast and panel discussion at BDwest last year, you noted that “Airbnb is having a bigger impact than we realize.” Is that still the case? What aspects of the model should hoteliers be sweating—and learning from?
I still believe that Airbnb is a disruptor to the hospitality industry, but to what extent is still unclear. I also think VRBO has become more relevant as Airbnb introduced the home-sharing concept to a wider audience.
Airbnb and its business model are here to stay and we must learn from them to stay relevant. Today’s guests are more interested in experiences. For some cities, Airbnb has expanded its business model to include offering activities and tours that guests can book as part of their stays. I think it was a really smart move and one that’ll help the company continue to grow share and loyalty, as well as differentiate itself from other home-sharing companies and hotels. There’s a lot for hospitality industry leaders to learn from Airbnb in terms of developing new ideas for energizing the guest experience, creating loyalty and designing hotels with a fresh perspective. In my opinion, the hospitality industry has room for more “outside the box” creative thinking.
Work-life balance is a buzz phrase that comes up often, but seems the hardest to achieve from the c-suite. How important do you think it is to productivity? Is it something you value, struggle with or gave up on long ago?
I think balance is something we all struggle with. I’m a passionate and intellectually curious person, so my interests far exceed the time I have to dedicate to them all. A mentor once told me, “Success happens more easily when we’re clear what our primary priorities are.” It’s a philosophy that resonated with me and helped me focus and dedicate my time to what’s most important in my life.
That being said, I think managing one’s life is like writing a book. Books are written one chapter at a time, not in one sitting. It’s important to pace yourself and recognize that there’s a time and a chapter for everything. You’ll get it all done, but not all at the same time and that’s OK.
I prefer to use the term “blending” rather than “balancing.” It’s a small mindset shift, but it changes the internal conversation from having to make an “either/or” choice to one where my main priorities are integrated and fluid. It works better for me and helps me do a better job at managing life’s demands with a healthier perspective and that typically translates into greater fulfillment and a lot less stress.
HVMG is refreshingly atypical when it comes to the gender diversity of its leadership. In terms of the industry at large, how hard has it been to break into the “old boys’” network? Any advice for other women, especially those who are earlier on in their careers?
It’s refreshing and a privilege to work at an organization like HVMG. It’s truly an example of a company that has been successful with leadership diversity. According to a research study conducted in partnership between the American Hotel & Lodging Association (AHLA) and the Castell Project, as of 2016, men within the hospitality industry are 10 times more likely to be promoted to the principal/partner or president levels than women; four times more likely to be promoted to the executive vice president/group president level; and more than twice as likely to be promoted to the senior vice president, vice president or district level. The study went on to show that there’s a preference for promoting men at all levels and it may suggest that there’s cultural bias. My advice for other women is to find a champion who will nominate you to participate in the Castell Project skill training and executive coaching process, and introduce you to a network of other successful, dynamic women.
On that note, tell us a bit about the Castell Project and how it came to be. Why is its mission so important? And how can hospitality companies tap into the nonprofit’s tools to help their business, as well as promote diversity within the industry overall?
Women currently comprise 59% of hospitality industry employees and 65% of hospitality college program graduates. While the industry recruits and retains female students and employees, historically women have significantly lagged in obtaining key influential hospitality leadership roles. Over the next decade, this will impact the ability of hospitality industry companies to attract and retain talent.
The Castell Project Inc., is a 501(c)3 nonprofit that provides hospitality companies with the tools and support to accelerate development of their women executives, the largest component of their workforce and the greatest source of future leaders.
Most hotel companies lack the internal resources to offer leadership development of this caliber. However, providing leadership development tied to an industry network earns loyalty and supports retention of the most talented employees. Statistically we know loyal and happy associates translate into more profitable companies. The Castell Project was developed to provide the platform to accomplish this goal for hospitality industry companies.
With support from industry partners, Castell is delivering impactful and structured leadership development for talented, high-potential women executives, including a workshop with professional trainers specialized in developing women executives, ongoing training and networking opportunities. The Castell Project also delivers innovative research on diversity in the hospitality industry.
To read Cutshall’s Exit Interview, flip to page 88 of Boutique Design’s January + February edition.