As the host of the Lodging Luminaries podcast (Audible, Amazon), my goal is to talk with hoteliers who think differently about the future of our industry, and no one fits that mold more than Michael Levie, who is in charge of operations at CitizenM. The Netherlands-based hotel brand has taken a different approach since its launch, focused on serving a single demographic of today’s traveler and building a niche, tech-forward brand that simplifies both operations and the guest experience. CitizenM has truly built a culture of innovation, and our conversation highlights how “transformational thinking” is required in today’s dynamic hospitality environment.
Listen to the entire episode here or read highlights of the conversation below.
Q: As CitizenM grows, how do you keep your unique culture of thinking differently about tackling industry challenges?
Levie: One of the things that we try to do slightly differently than the rest of the industry is we focus on one segment, one pipeline group, one type of client that we call the frequent traveler. The people that are always on the roads – the mobile citizen. What you’re capable of doing, if you have one target market, you can really enhance those things that a target market needs and cut back and scale down on those areas that are costly and are not appreciated by that particular market. That also means that you’re not a hotel for everybody. So we try to be as transparent and clear as possible so people know what to expect, and we try to under-promise and over-deliver.
Q: You speak often about “transformational thinking.” What is that, and how does it shape the company?
Levie: We look at business processes and we analyze them from the core – why are we doing it? What’s the need or who are we doing it for? And we rethink: How would we, in the contemporary setting where we are today, how would we best set it up?
Secondly, we have a very empowered organization, so everybody participates in that process. It’s very democratized. People feel free to chime in, participate and be part of the solution. It’s cultural. A lot of organizations in our industry, almost all of them, are set up with a top-down hierarchy. We think that is not the way to run an organization that is dependent on its line staff for success. So, we inverted that pyramid so that the line staff is at the very top and the line staff are actually fully responsible and held accountable for guests’ satisfaction. But, as the people in the top of an organization, they’re incentivized to do well. At that point, we can fully entrust and empower these people.
That transformational thinking comes from an attitude, comes from being hungry, comes from scarcity, comes from never being satisfied.
Q: Our industry is known for lagging in digital adoption, which is often due to fragmentation of the key stakeholders. How have you overcome that specific challenge?
Levie: When we talk about technology, people tend to lump everything together, and I think it deserves a little bit more peeling back. I see three significant streams: One is your property systems. The most classic is your property management system, but there’s also your point of sale, your door locks, whatever systems you need in order to operate.
The second thing is your commercial view, and ours has changed. We do not sell by segmentation anymore, we sell by channel, and we have actually become brokers of our own inventory. So, here, you’re talking about revenue systems, channel management, and you want to take your gross revenue, knowing what your cost of acquisition per reservation is, to net revenue, to understand where the contribution comes from at profit level.
And then thirdly is everything that has to do with the guests – that includes our networks, the HVAC systems, lighting, but also the glitter.
To connect all these technologies, you get old waiting for interfaces and interface management. And I think the way we have resolved that at CitizenM is by creating middleware. Think of it as a gigantic pipe that is circular and allows systems to connect through APIs. The middleware is the neutralizer. The API to all these systems neutralizes it, so you can build dashboarding and you can decide which is your system of record. All of a sudden you can get organized, and that has given us a huge freedom to really excel and do better.