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<\/a><\/p>\nThe Ace Hotel Group which spun from a single hotel founded back in 1999 at the hand of Alex Calderwood reinvigorated\u00a0the traditional hotel model. By offering something completely original, Calderwood created the definitive hip hotel chain and broke hotel convention. While a complete pioneer in regard to its design, the first Ace Hotel in Seattle, Washington also offered affordable rooms with communal bathrooms under the same roof as large luxury suites and was created out of Calderwood\u2019s desire to create a place where his friends \u2013 DJs, artists, creators, musicians \u2013 would want to stay. The Ace Hotel Group is now a branded operating company with seven properties and over 1,000 rooms currently under management. It is scheduled to\u00a0open its new Pittsburgh property this week with the New Orleans opening\u00a0following next year.<\/p>\n
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Business Model<\/strong><\/p>\n Hotels are generally high-margin businesses but getting them up and going takes a lot of wheeling, dealing, and capital. The Ace Hotel Group\u2019s business model is centered on enhancing the value of properties through an innovative and locally-inspired approach to design and development. This is done through its relationships and partnerships with financiers, developers, and a number of the creative community. Essentially each new hotel is handpicked and designed to fit specifically within its location.\u00a0I found this especially interesting because it makes their business model, in a sense, a bit inconsistent as the design and development can’t simply be replicated. The firm creates and captures value by finding a challenged, sometimes historical, property in a less than desirable neighborhood and repurposing it in the Ace image by instilling local culture and collaborating with local businesses to create an authentic feel. It has leveraged this business model to bolster its brand which has allowed it to split its revenue among hotel rooms, bar\/restaurant offerings, and merchandise.<\/p>\n \u201cWe don\u2019t think of ourselves as a hotel company. We\u2019re more about creating community and a cultural venue.\u201d<\/p>\n -Brad Wilson, president of the Ace Hotel Group<\/p>\n \n Operating Model<\/strong><\/p>\n Ace\u2019s operating model hinges on resourcefulness and the behavioral change garnered by the rise of the millennial and the creative class. It is no longer all about the in-room amenities, spending lots of time in the comfort of your room, or standardizing properties quickly across regions. Resourcefulness begins in the development process in which Ace opts against gut renovations and tries to use as much of the existing architecture as possible. This unconventional style has led to quirky room layouts, and its New York property having about 54 different room types. This would prove disconcerting to the average hotel company, but the typical Ace Hotel customer unbothered by such a quirk and may actually find delight in a slightly different room on each stay. Due to the shift in behavior and rise of the creative class, Ace is able to employ a streamlined operating model that pairs varying room sizes\u00a0with large social spaces and unique restaurants\/bars. Rooms are typically fitted with the likes of inexpensive yet highly functional industrial supply lamps and unpainted metal doors, and the large communal spaces offer free Wi-Fi, coffee and tea from boutique brands, intriguing art, and lots of interaction. Restaurants are helmed by popular local chefs and draw a constant flow of people. While hotels of the past kept everyone at a social distance, Ace has always been about encouraging interaction.<\/p>\n Atelier Ace, an in-house creative services firm, provides interior, graphic and product design, marketing, PR, development, digital presence and event & cultural engineering for the properties. The upcoming generation desires uniqueness in product offering and has an affinity for film, fashion, theater, and other forms of art. Atelier Ace feeds this desire by initiating various partnerships and events which have ranged from geek-chic \u201ccodeathons\u201d with the Clinton foundation to fashion shows. This is another critical component of its operating model and a source of competitive advantage.<\/p>\n<\/a><\/p>\n<\/a> <\/a> <\/a><\/p>\n<\/a> <\/a> <\/a><\/p>\n