Try to remember the last time you wanted to visit a hotel gift shop. Not because you were dying for aspirin or needed a gift for your kid, but because you were actually interested in the goods it sold. Try. It's like trying to remember using a hotel phone for a long-distance call.
Lee Ann Sauter wants guests to want to visit hotel shops—and started a company, Seaside Luxe, to ensure that they do. The concept stemmed from her 2007 stay at the Hualalai Four Seasons, in Hawaii. "The gift shop was the same mess I see at every hotel," she recalls. So she bet the hotel's CEO that she could do it better. After getting sign-off to open a store in an unused lobby alcove, Sauter, who had been a buyer for brands like Gap and Tommy Hilfiger, called in favors from high-end vendors and scrutinized design details. Within a month of her shop's opening, the resort's retail revenue had quintupled.
That success gave rise to Seaside Luxe, which now overhauls and operates shops for other resorts. "Hotel retail is a gray area," says Anne Lloyd-Jones, managing director of the consulting firm HVS Global Hospitality Services. "Properties need it but pay little attention because shops aren't revenue sources in the way rooms, food and drink, or golf and spa are." Some chains, such as W Hotels and the Morgans Hotel Group, have brand-specific signature stores. But most hoteliers lack buying experience and just stock shops with basics, or lease the space out. Notes Lloyd-Jones, "Seaside is the only company treating shops as profit centers."
Sauter and her team assume operations of four to eight stores per hotel, handling the design, buying, and staffing for Seaside Luxe boutiques, as well as the beach, spa, and golf shops. Out go the shot glasses and novelty tees; in come apparel and accessories chosen with the hotel's clientele and region in mind. The service includes analytics on shopping patterns and events befitting a Rodeo Drive boutique, such as trunk shows and visits from fashion designers.
While Seaside's crew does the heavy lifting, hotels foot the bill—and get the revenue. Sauter receives an annual fee, plus sales bonuses. Seaside now has deals with four U.S. resorts and is in talks to expand worldwide. "Not every venture has to be high end," she says. "Basic sundries shops can be successful." And maybe even memorable.
A version of this article appeared in the December 2012/January 2013 issue of Fast Company magazine.