A few years ago I was in New York to join my son James at his first art show. Where would we stay?
I thought - Art = The Chelsea and made a reservation. When we arrived I chatted with a older looking man at the desk about how excited we were to be at the Chelsea and that we were in New York to honor our son's art career. He then immediately upgraded us to room 822 - Madonna's suite.
I had met Stanley Bard - the soul of the Chelsea.
In June, the board, impatient in the search for a greater return threw out Stanley and his son David and has replaced them with a firm who plan to redevelop the hotel.
I am not here going to beg the board to reconsider. I am instead going to point out how they can indeed make more money but with Stanley and David and by also keeping much of the Chelsea as it is - partly a residential hotel for artists.
Here is the essence of the argument. If you really want to make money today, you form groups or communities. Look at Facebook. By December 2007, it will have over 100 million members. What will it be worth then? Look at eBay. It makes its money by creating a safe space where people can do business with each other. Look at Google - it creates a world of email, search, documents, chat, Video, maps etc where we spen more and more time - Google, because they know all about us can line up ads that fit.
See what I mean?
Here is the choice for the board as I see it.
- Go with the new plan - this will involve making a massive additional investment in rebuilding the hotel. Anyone see the film the "Money Pit". We all know how renos go. In the interim, all that is really the brand - How the Bards host, the history and the residents, will be lost. All that will remain is a name and a hotel that will have to compete with all others in an arms race of smartness. What then? What will make the New Chelsea different? You will now have spent all the money and yet be in competition with hoteliers who have much more than you. Your brand will be less than nothing because it will be based on a hotel that you destroyed. Ask your self how you intend to sustain your investment based on this action?
- Now perceive the Chelsea not as a Hotel but as a "Club" that can build its membership from those that love it and want to use it. The Chelsea as it is is an icon and has already a large community of devoted fans and can tap into a very large community of people who would like to be identified with what the Chelsea - as it is - stands for. People like me. Formalize the goodwill that Stanley has attracted to the Chelsea over the decades. Do not spend a lot of reno money. Keep most of the residents. Focus on knitting together the community of those that love the place and newbies such as me who desperately want to have a non corporate experience. Work to thicken up the community that exists and add to it. Have a look at all the blogs and posts - that will give you a sense of what could be done. Add a virtual Chelsea to the real place. Make it part of the artistic scene. Have a sliding scale of fees based on frequency - rank the "club" by what people give back. The more you give back in terms of room nights and room rates, the more eligible you become to join the inner circle. It's a Robin Hood deal - I pay so that an artist and her kids can live there. We both help each other. The residents provide the atmosphere, I pay the bills. At the heart of this model are the Bards. Trusted Space has to be hosted authentically. No one knows better how to do this like the Bards.
This is not the fantasy of a "fan" but a cool business proposition. Group Forming is where all the money is being made today and where value is being created. Google bought YouTube because of its Group Forming capability. eBay bought Skype because of this. Here is how Reed's Law works (David Reed)
The Yahoo/Google paradox is at the centre of this. Yahoo does not make group forming the centre of its business model. Google does. Go down the route you have selected now and all the risks are that you will be Yahoo. Consider the route I offer and you could be the Google. The only Hotel in New York that can pull this off is the Chelsea. The Chelsea stands alone with the latent community formed and with the values established.
So dear board members - what do you really want? Do you really want to make a decent return or to join the commodity hotel rat race?
I would be happy to explain in more detail how this may work.
