Pop-Up Stores in Hotels Seize the Opportunity as Domestic Travel Bounces Back, While International Travel Lags Behind

When Elizabeth Preis, the Chief Marketing Officer (CMO) of Anthropologie, a retailer based in Philadelphia, made the decision to establish a summer pop-up store that would run until Labor Day, she realized that connecting with customers required a fresh approach. Previous Anthropologie pop-up locations had been set up in malls and art galleries, but a new strategy was needed. Mall foot traffic had decreased significantly, with Placer.ai reporting an 18% drop from pre-pandemic levels in April and a 23% decrease in March. In response, the brand opted for a unique move by opening its very first pop-up store within a hotel, deviating from the norm. This innovative concept was unveiled on Memorial Day at The Reeds hotel in Stone Harbor, conveniently located close to Anthropologie’s headquarters in Philadelphia. The primary objective, as described by Preis, was to tap into the resurgence of travel and hotel stays across the nation. This approach would allow retail options to reach individuals who had refrained from flying or staying in hotels for an extended period, sometimes even over a year. Preis stated, “We frequently engage with our customers and understand their inclination towards novel experiences and unexplored destinations. Hence, collaborating with a hotel seemed like a natural progression for us. The Reeds, situated in proximity to Philadelphia, provided an ideal opportunity to test this concept.” In a similar vein, Dior is presently hosting a pop-up store at the Rosewood Miramar Beach hotel in Southern California. This pop-up, like Anthropologie’s, will remain operational from Memorial Day through Labor Day. In another instance, Chanel is gearing up to launch a pop-up store at the Clubhouse Hotel in Spain, with plans to run it until September. Both of these pop-ups will showcase new collections, focusing on summer attire. It’s worth noting that these pop-ups operate under a rental model, differing from revenue-sharing partnerships. The growing trend of pop-ups within hotels, as opposed to the more traditional locations such as tourist-heavy neighborhoods like SoHo in New York City, aligns with the phenomenon known as “revenge travel.” This trend entails a surge in domestic travel, compensating for previous limitations. AirDNA’s data for June indicates that while international travel from the U.S. remains sluggish, domestic travel has been steadily on the rise since the start of 2021. The demand for short-term accommodations within the U.S. has increased by 24% in the last six months, with coastal destinations and resorts witnessing a remarkable 42% growth. April marked a significant milestone, as hotel demand in the country surpassed 2019 levels for the first time since the pandemic’s onset. This stands in stark contrast to the dire repercussions that the hotel and travel industry endured in 2020. For instance, California reported a staggering 90% decline in hotel occupancy tax revenue between 2019 and 2020. Nevertheless, in April 2021, the state’s hospitality sector managed to recover by adding 400,000 jobs that had been eliminated the previous year. Ron Gorodesky, the President of Refined Hospitality, which owns The Reeds, remarked, “The pace of travel’s resurgence is remarkable, and The Reeds has consistently enjoyed full occupancy rates since spring. This trend is set to continue throughout the summer. While the initial summer season certainly contributes to these positive booking trends, travelers are now eager to resume their journeys due to the widespread vaccination efforts.” It’s noteworthy that Anthropologie is the first retailer to collaborate with The Reeds since the pandemic’s onset. Interestingly, many of the brands engaging in hotel-based pop-ups are tailoring their product assortments to suit vacation-friendly preferences. For instance, Anthropologie’s pop-up is dedicated to showcasing summer dresses and swimwear. Similarly, in early June, swimwear brand Love Brand & Co. launched an exclusive collection at a pop-up shop located in the Nobu Hotel Ibiza Bay, also situated in Spain. The complete recovery of international travel, along with its lucrative tourist segment, is not anticipated until 2023. Currently, international travel is operating at less than half of its pre-pandemic levels, with the absence of Chinese tourists resulting in a loss of over $10 billion in revenue for businesses in the U.S. last year.