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					                                   Special Report: Top U.S. Hotel Chain Survey

Buyers Held All The Cards In ’03, Tide May Turn In ’04
                   BY BRUCE SERLEN                         sponse to cutbacks in travel were in a better negotiating        For 2003, U.S. hotels’ performance basically was flat


F
        ortunately for buyers, negotiations for 2004       position up to a point. “By cutting back on the num-         from 2002. According to Smith Travel Research, occu-
        room rates, in most cases, were well underway      ber of properties we use in a market, we were able to        pancy rates reached 59.2 percent, up 0.2 percent versus
        last fall when the hotel rebound really began to   drive greater marketshare to the remaining suppli-           the previous year. Average daily rate declined 0.1 percent
gain steam. Consequently, the industry consensus is        ers,” said Kari Knoll Kesler, sourcing specialist for        to $83.28. With 2003’s performance, ADR fell three years
that buyers managed to retain the upper hand—at            travel, meetings and promotions for ING Americas in          in a row. “This was the first time since 1930-1933 that
least for one more year.                                   Minneapolis. “But you reach a point where it doesn’t         nominal ADR declined consecutively this way,” said
    While the U.S. lodging industry’s performance ba-      make sense to consolidate any further if you can’t           Kirk Reed of PricewaterhouseCooper’s hospitality and
sically was flat in the first half of 2003, occupancy      guarantee availability.”                                     leisure financial advisory services group in New York.
rates and room revenues improved significantly in the         Rate loading remained a particular sore point. “Year          Meanwhile, revenue per available room, which is a
second half. The gains were substantial enough to give     after year, it still is a chronic problem that won’t go      more accurate indicator of hotel profitability, last year
hoteliers hope that the severe industry downturn was       away and no one seems able to address it successfully,”      increased 0.2 percent to $49.34, compared with 2002.
winding down after a two-and-a-half-year siege. At         said Greg Herrera, corporate travel manager at                   Industry room supply increased 1.3 percent in 2003,
year-end, industry analysts shifted their focus to the     Raytheon Co., in Long Beach, Calif., at last year’s annual   while demand in terms of number of room nights sold
first months of 2004 to determine if a rebound really      meeting of the National Business Travel Association.         gained 1.6 percent. Full-year 2003 room revenue in-
was taking place and if it was sustainable.                                                                                      creased 1.5 percent to $79.9 billion.
    Against this backdrop of change, the Busi-                                                                                      In contrast to such lukewarm results, in-
ness Travel News survey of top U.S. hotel chains                                                                                 dustry analysts are much more bullish on 2004,
particularly is revealing this year for the in-                                                                                  mostly because hotel performance strength-
sight it provides into buyers’ brand preferences                                                                                 ened appreciably in the third and fourth quar-
across various industry price points and cate-                                                                                   ters. “Industry operating performance began to
gories. The state of the market notwithstand-                                                                                    gain traction in the second half of 2003,” said
ing, the survey shows buyers to be demand-                                                                                       STR president Mark Lomanno. “We expect
ing when it comes to having their programs’                                                                                      this momentum to continue in 2004. Healthy
requirements met. Quality and consistency re-                                                                                    demand growth combined with continued
main paramount concerns.                                                                                                         moderate room supply increases should
    Among the large multi-brand companies,                                                                                       strengthen occupancies.” STR’s forecast was
Marriott International fared especially well in                                                                                  based on two assumptions: that the U.S. econ-
this year’s voting. Four of its brands—Ritz-                                                                                     omy continues to improve and that no major
Carlton, JW Marriott, Courtyard and Towne-                                                                                       terrorist attacks occur on U.S. soil.
Place Suites—placed first in their respective                                                                                       “The worst of the recent down cycle is like-
categories. Last year, none carried away top                                                                                     ly behind us,” said M. Chase Burritt, nation-
honors. By contrast, only one Hilton Hotels                                                                                      al director of hospitality services for Ernst &
Corp. brand—Homewood Suites—captured a                                                                                           Young. “Demand is gradually improving, pric-
top slot, while Starwood Hotels & Resorts Worldwide           These concerns aside, the growing impact of dis-          ing is stabilizing and the development pipeline still
could not even make this claim.                            count Internet rates hovered like a storm cloud over         is at relatively historic lows. These factors bode well
    As in previous years, survey respondents were asked    the entire industry. By year-end, an increasing num-         for the industry.”
to rank hotel chains on a range of criteria culminating    ber of hotel companies, including such major players             PwC’s Reed projects that occupancy rates will in-
in the brands’ overall relationship of price to value.     as Marriott, Hilton and Starwood, had implemented            crease to 61.2 percent in 2004 and to 61.7 percent
    “Much of your leverage depends on how successful       strategies that enabled them to take back from the           in 2005. This is still below the occupancy levels of
your relationship with the hotel has been in the past,”    third-party sites at least some pricing control over         63.3 percent achieved in the banner year of 2000,
said Bill Davidson, manager of corporate travel and        their inventory.                                             but it is 2.6 percent above the recent low point of
meeting services at International Sematech in Austin,         Travel buyers likewise were frustrated when In-           59.1 percent set in 2002. Similarly, PwC expects ADR
Texas. “Regardless of the economy, you were in a           ternet-only rates undercut their negotiated rates.           to climb 1.9 percent in 2004 and another 3 percent
much better position to drive bargains if you deliv-       Adding salt to the wound, buyers were not able to get        in 2005. RevPAR growth will jump 5.2 percent in
ered on past commitments.”                                 credit for these stays toward the volume commitments         2004 and then level off to growth of 3.9 percent the
    Buyers who had consolidated their programs in re-      they had made to these same chains.                          following year.



Ritz Receives Highest Mark In Every Deluxe Criterion
                                  BY BRUCE SERLEN                                        sult of falling revenues brought on by        refurbish the guest rooms, Gurtner said


R
         itz-Carlton Hotel Co. this year not only captured the top berth in the high-    the continuing economic downturn.             improvements to the physical plant are
         profile deluxe category of the Top U.S. Hotel Chain Survey, locking in the          “We’ve intentionally not cut back on      no substitute for service. “If you don’t
         title for the fifth consecutive year, but it swept the ballot, receiving the    any service that touches the guest,” said     maintain service levels, no matter how
highest score on each of the 13 criteria survey respondents were asked to mea-           David Keamy, area director of market-         much money you put into a property,
sure. Key factors ranged from ease in of two ascenders to the throne: St. Reg-           ing at the two Ritz-Carltons in Boston,       it doesn’t mean anything,” he said.
arranging individual and group travel is Hotels & Resorts, which along with              a city whose hotels particularly have             Gurtner is equally candid about the
to the quality of the properties’ food and its sister Luxury Collection is part of       been hard hit by the recession. “People       competition. “I don’t think we’re in the
amenities. The most telling dynamic Starwood Hotels & Resorts Worldwide,                 use fresh flowers in the lobby as an ex-      same market with too many brands, but
may be the brand’s overall relationship and Fairmont Hotels & Resorts, which             ample, but that’s just one of a whole         the worst thing you can do is take your
of price to value. By contrast, Ritz-Carl- in the past two years has acquired tro-       range of amenities that guests associ-        eye off your potential competitors. To
ton last year scored highest on three of phy properties in Seattle (a former Four        ate with a luxury hotel and expect to         some degree, every hotel in the city is po-
the 13 criteria.                             Seasons), Washington, D.C., and             find when they stay with us.”                 tentially a competitor,” he said. “Ritz-
    Ritz-Carlton’s triumph left its peren- Hawaii. In last year’s survey, St. Reg-           Service remains central to the price-     Carlton has a brand recognition like Four
nial rival in the deluxe tier, Four Sea- is/Luxury Collection took third place,          value equation. “We continue to view it       Seasons, but realistically we compete
sons Hotels & Resorts, looking more but this year Fairmont pulled out ahead,             as key to the hotel’s success, regardless     with hotels on a geographic basis as well.”
and more at home in second place, the leaving St. Regis in fourth.                       of the economy,” said Thomas Gurtner,             In conversions, deluxe brands have
position it occupied last year as well.         Survey respondents gave the catego-      regional vice president and general           to be especially careful not to displease
    The real suspense in the deluxe rank- ry generally high scores. This warrants        manager of the Four Seasons Boston.           existing clients while putting new brand
ing this year, however, was about nei- mention because many hotels at this               While that property is in the midst of        standards in place. “You hope the brand
ther Ritz-Carlton nor Four Seasons. price point in 2003 were under pressure              an extensive renovation that will add a       coming in is sensitive and skilled at con-
Rather, interest centered on the showing to curtail amenities and services, the re-      new meeting room and spa, as well as                                Continued on page 26

16       Monday, February 9, 2004                                           www.btnonline.com                                                             Business Travel News
                                    Special Report: Top U.S. Hotel Chain Survey

JW Marriott Triumphs Amid Upper Upscale Hotels
                   BY BRUCE SERLEN                          higher visibility among corporate travel buyers.             can be a great lead source to benefit the rest of the net-


J
     umping from a fourth-place tie last year, JW Mar-          “The strategy was to select targeted locations for       work, and the rest of the network can benefit individ-
     riott Hotels & Resorts grabbed the number-one spot     business travelers in markets both domestically and          ual hotels,” said vice president of marketing for Accor
     in the upper upscale category in this year’s hotel     internationally in 2003 and expect that approach to          business and leisure division Scott Wiseman, who was
chain survey. The victory particularly was meaningful to    continue in 2004 and beyond,” said Sid Yu, Marriott se-      formerly general manager of the Sofitel Philadelphia.
the Marriott camp since this is only the second year that   nior vice president of brand management, citing 2003             The group business also has been a focus of many
Marriott has entered the fast-growing, high-end JW in       JW openings in Orlando and Shanghai as representa-           of the Sofitels as a way of making inroads into a cor-
the survey as a separate entity from the core Marriott      tive of the brand’s two-pronged development effort.          porate account’s transient program. In Philadelphia,
brand, which competes in the upscale category.              The 1,000-room Orlando property is part of Marriott’s        for example, a large account will have a dedicated
    Congratulatory slaps on the back also were in or-       Grande Lakes development that includes a Ritz-Carl-          transient sales person and a separate group sales per-
der at Paris-based Accor Hotels, whose Sofitel brand        ton. Grande Lakes last month was named “deal of the          son, Wiseman said.
claimed the category’s number-two spot. Sofitel last        year” at the American Lodging Investment Summit.                 Westin in 2003 also stressed development, opening
year had not received sufficient usage                                         To distinguish JW from Ritz-Carlton,      U.S. properties in Dallas, Charlotte and Las Vegas and,
from survey respondents even to warrant                                     Yu described JW as the “luxury market        internationally, in Leipzig, Kuala Lumpur and Bangkok,
mention in the listing.                                                     offering of the Marriott brand.” The prop-   among others. At year-end, distribution stood at 123. At
    Sitting out this year’s upper upscale                                   erties “provide a kind of no-nonsense ap-    the same time, however, the brand has expended equal
celebration is Starwood Hotels & Resorts                                    proach to luxury, complete with the ex-      energy expanding its service levels. Westin four years ago
Worldwide, whose Westin and W brands                                        pected business amenities.” At year-end,     launched an upgraded bed product, which was the start
have had a lock on the category’s top                                       there were 30 properties in the portfolio,   of what Sue Brush, senior vice president for brand man-
berths for the past four years. Westin,                                     19 of which were international. As the       agement, referred to as the “Heavenly phenomena.”
2002’s highest-rated upper upscale brand,                                   brand grows, Yu said there will be select    The so-called Heavenly Bed now is installed in all West-
slipped this year to number three, while                                    opportunities to convert existing Mar-       ins in North America. Bathroom and upgraded exer-
W went into virtual freefall, skidding from                                 riotts to the JW flag. The Camelback Mar-    cise facilities followed. “Guest satisfaction as a result
second place last year to seventh place                                     riott in Scottsdale is scheduled to under-   of the bed has risen. We’ve also seen a halo effect. Over-
this year in a field of eight. Occupying                                    go such a reflagging in 2004.                all satisfaction ratings are up because the guest walks
the category cellar this year was Le Meri-                                     Sofitel in 2003 gained higher visibili-   in the room and it’s an absolute wow. Then they expe-
dien. A brand in financial crisis, Le Meridien lost man-    ty as a result of a spate of new openings the year before,   rience the Heavenly Bath,” Brush said.
agement contracts through much of 2003. Late in the         when properties came online in Chicago, Washington,              The Westin Workout, which in 2003 was installed
year, $1.3 billion of its senior debt was acquired by a     D.C., and Montreal. Parent Accor in 2000 had begun a         in 23 hotels and will be in place at all North America
partnership of Starwood and Lehman Brothers.                major push to build the Sofitel name in North Amer-          hotels by year-end, “is the tip of the iceberg,” Brush
    On survey ballots, JW Marriott received highest         ica, after a 10-year development hiatus, opening in          said. “We’re now testing some in-room workout equip-
scores on 10 of the 13 criteria respondents were asked      New York and Philadelphia.                                   ment and perhaps spa services, which have a lot of
to measure, including the critical relationship of price        Given its still limited U.S. distribution, Sofitel re-   potential as well.” Another opportunity is food and
to value. Sofitel placed highest on the remaining three.    lies more on its sales force to help build name recog-       beverage, she said: “It’s definitely a grab-and-go culture,
    Both JW and Sofitel have increased their distribu-      nition among corporate accounts than large U.S.-based        even at our price point, and we would like to figure
tion significantly in the past few years, resulting in      multi-brand competitors might. “The property level           out how to address that.”



Hyatt Takes Home The Upscale Trophy Once Again
                                  BY BRUCE SERLEN                                         the downturn, it was that you have to         erty in the Boston financial district. The


H
          yatt Hotels & Resorts this year extended its hold on the prized first-place     stay close to the changing needs of your      owner still felt comfortable with the Hy-
          position in the upscale category of the Top U.S. Hotel Chain Survey for the     customer, whether that customer be the        att flag, even though it was our third
          sixth consecutive year. The most crowded survey category with a field of        travel buyer, meeting planner or actual       property in the Boston market,” Rabin
13, the upscale tier includes such main stay, business travel-friendly brands as          traveler, and we’re going to keep that fo-    said. Similarly, Hyatt assumed the man-
the core Marriott, Hilton and Sheraton commission payment systems, quality                cus in mind going forward,” said Edward       agement contract last month on a key
chains. Hyatt prevailed over the pack, of food and the overall relationship of            Rabin, president of Hyatt Hotels Corp.        hotel in downtown Montreal. “We ex-
if only by a small margin.                    price to value. Walt Disney scored high-    On one level, this will mean introducing      pect there will be more such opportu-
    The big news in the upscale catego- est on five of the 13, for its facilities for     a host of service and prod-                                    nities for us as the year
ry this year, however, was the come- resort and non-resort meetings, its help-            uct enhancements during                                        goes on.”
from-behind showing of Renaissance ful staff, the physical appearance of its              the year. “These range                                            Renaissance is moving
Hotels & Resorts, which is part of Mar- hotels and the quality of its in-room             from a rollout of wireless                                     forward with a mix of
riott International. Renaissance one year amenities. Hilton International, sixth          high-speed Internet that                                       both U.S. and interna-
ago did not have sufficient usage by sur- place overall, received top scores for ease     will be consistent across                                      tional development. “In
vey respondents to warrant inclusion in in arranging individual travel.                   the brand, in addition to                                      the U.S. market, the new
the final ranking. This year, it catapult-       U.S. upscale hotels in 2004 are ex-      whatever wired solutions                                       Renaissance Grand in St.
ed to second place behind Hyatt and pected to perform significantly better                individual hotels have im-                                     Louis is representative of
ahead of third-place Walt Disney World than in 2003 as the economy strength-              plemented,” Rabin said.                                        what the brand is about,”
Resorts, which last year held the num- ens, but that improvement also is ex-              Hyatt also expects to de-                                      said Sid Yu, Marriott se-
ber-two spot.                                 pected to moderate the following year.      but a new guest room                                           nior vice president of
    Other brands’ fortunes rose and fell According to PricewaterhouseCoopers,             product that is likely to in-                                  brand management. “It’s
incrementally. The decline of Sheraton, occupancy levels for the category in              clude an upgraded, signa-                                      a conversion and expan-
which is part of Starwood Hotels & Re- 2003 increased a slight 0.8 percent over           ture bed.                                                      sion of the former his-
sorts Worldwide, was noteworthy. 2002. In 2004, however, occupancies                          On the development front, Rabin           toric Statler Hotel, but with the style
Number three last year, the brand nose- are projected to rise 2.9 percent year            expects the chain to proceed on two           consciousness and high profile restau-
dived to number eight this year.              over year, but then slide back down—        fronts: opening high-profile new prop-        rants that have become brand standards.
    Of the 13 criteria survey respondents again rising only 0.8 percent in 2005.          erties, while at the same time making         Internationally, the Renaissance Shang-
were asked to measure, Hyatt placed first Revenue per available room in 2003 ac-          major investments in renovating ex-           hai in the emerging Pudong neighbor-
in three, including the ease of arranging tually fell 0.4 percent over 2002 but is        isting assets. Hyatt benefited from the       hood, while a new build, embodies this
group travel and the quality of its busi- projected to jump 6.7 percent this year         surge of conversions that occurred in         same approach. Renaissance may be a
ness centers and in-room business before subsiding to 4.2 percent the fol-                2003 as the faltering economy caused          relatively young brand, but guest satis-
amenities. Renaissance also led the pack lowing year.                                     more hotel owners to change manage-           faction scores—from business travelers
in four areas: corporate rate programs,          “If the industry learned anything from   ment companies. “We reflagged a prop-         particularly—have been quite positive.”
18       Monday, February 9, 2004                                            www.btnonline.com                                                             Business Travel News
                                    Special Report: Top U.S. Hotel Chain Survey

                                                                                     DELUXE
                                  ARRANGE     ARRANGE   FACILITIES    FACILITIES   CORPORATE   COMMISSION   QUALITY    HELPFUL     PHYSICAL     QUALITY     QUALITY      QUALITY    OVERALL      OVERALL
                                 INDIVIDUAL    GROUP     RESORT      NON-RESORT       RATE      PAYMENT       OF      COURTEOUS   APPEARANCE    IN-ROOM    BUSINESS   IN-ROOM BUS. PRICE-VALUE   AVERAGE
Rank   Chain                       TRAVEL      TRAVEL   MEETINGS      MEETINGS     PROGRAMS     SYSTEMS      FOOD       STAFF       HOTELS     AMENITIES    CENTER      AMENITIES RELATIONSHIP    SCORE


 1     RITZ-CARLTON HOTELS         9.35        9.02       9.05         9.07          7.98        8.00        9.15       9.21        9.42        9.08        8.81         8.77         8.50        8.88

 2     FOUR SEASONS HOTELS         9.03        8.42       8.61          8.88         7.32        7.80        8.77       8.74        9.11         8.76       7.91         8.40         8.28        8.46

 3     FAIRMONT HOTELS             8.86        8.57       8.00          8.72         7.69        7.59        8.42       8.55        8.65         8.43       7.97         8.19         8.35        8.31

 4     ST. REGIS/LUXURY COLL.      8.73        8.45       8.10          8.55         7.14        6.78        8.15       8.67        9.21         8.71       8.15         8.07         8.20        8.23




                                                                        UPPER UPSCALE
                                  ARRANGE     ARRANGE   FACILITIES    FACILITIES   CORPORATE   COMMISSION   QUALITY    HELPFUL     PHYSICAL     QUALITY     QUALITY      QUALITY    OVERALL      OVERALL
                                 INDIVIDUAL    GROUP     RESORT      NON-RESORT       RATE      PAYMENT       OF      COURTEOUS   APPEARANCE    IN-ROOM    BUSINESS   IN-ROOM BUS. PRICE-VALUE   AVERAGE
Rank   Chain                       TRAVEL      TRAVEL   MEETINGS      MEETINGS     PROGRAMS     SYSTEMS      FOOD       STAFF       HOTELS     AMENITIES    CENTER      AMENITIES RELATIONSHIP    SCORE


 1     JW MARRIOTT HOTELS          9.08        8.54       8.55         8.62          8.12        8.31        8.26       8.62        8.77         8.47       8.34         8.18         8.38        8.48

 2     SOFITEL HOTELS              8.86        8.72       8.25          8.16         7.84        6.92        8.16       8.25        8.89        8.55        7.94         8.17         7.95        8.21

 3     WESTIN HOTELS               8.73        8.36       8.35          8.41         7.66        7.65        8.22       8.58        8.63         8.15       7.80         8.05         7.96        8.20

 4     LOEWS HOTELS                8.56        8.36       8.09          8.00         7.29        7.47        8.00       8.12        8.40         8.16       8.04         7.88         7.68        8.00

 5     OMNI HOTELS                 8.47        7.89       8.09          7.94         7.37        7.48        7.87       8.31        8.44         8.10       7.63         7.78         7.76        7.93

 6     INTERCONTINENTAL HOTELS     8.44        8.03       7.76          8.21         7.58        7.00        7.81       8.36        8.36         8.11       7.47         7.35         7.82        7.87

 7     W HOTELS                    8.61        7.90       7.80          7.85         7.40        6.88        7.93       8.24        8.48         8.00       7.26         7.74         7.72        7.83

 8     LE MERIDIEN HOTELS          8.44        7.82       7.77          7.57         7.56        7.38        7.67       7.72        8.39         8.00       7.36         7.47         7.94        7.78




                                                                                    UPSCALE
                                  ARRANGE     ARRANGE   FACILITIES    FACILITIES   CORPORATE   COMMISSION   QUALITY    HELPFUL     PHYSICAL     QUALITY     QUALITY      QUALITY    OVERALL      OVERALL
                                 INDIVIDUAL    GROUP     RESORT      NON-RESORT       RATE      PAYMENT       OF      COURTEOUS   APPEARANCE    IN-ROOM    BUSINESS   IN-ROOM BUS. PRICE-VALUE   AVERAGE
Rank   Chain                       TRAVEL      TRAVEL   MEETINGS      MEETINGS     PROGRAMS     SYSTEMS      FOOD       STAFF       HOTELS     AMENITIES    CENTER      AMENITIES RELATIONSHIP    SCORE


 1     HYATT HOTELS                8.77        8.17       8.55          8.32         7.69        8.08        8.00       8.40        8.50         8.11       7.91         7.93         7.97        8.18

 2     RENAISSANCE HOTELS          8.76        8.16       8.17          8.08         8.15        8.17        8.05       8.38        8.40         7.95       7.87         7.79         8.17        8.16

 3     WALT DISNEY HOTELS          8.03        7.77       8.63         8.46          6.93        8.00        8.00       8.63        8.60        8.25        7.80         7.62         7.81        8.04

 4     MARRIOTT HOTELS             8.44        7.88       8.13          8.01         7.86        7.91        7.87       8.24        8.23         7.92       7.80         7.79         7.86        8.00

 5     HILTON HOTELS               8.56        8.04       7.96          8.11         7.72        7.82        7.74       8.26        8.10         7.84       7.86         7.87         7.92        7.98

 6     HILTON INT'L                8.79        7.90       7.48          8.05         7.46        7.86        7.79       8.27        8.34         7.58       7.65         7.59         7.63        7.88

 7     WYNDHAM HOTELS              8.51        7.68       8.05          7.85         7.84        7.52        7.84       8.07        7.93         7.70       7.48         7.73         8.02        7.86

 8     SHERATON HOTELS             8.35        7.76       7.52          7.96         7.72        7.85        7.68       8.03        7.92         7.57       7.51         7.62         7.89        7.80

 9     RADISSON HOTELS             8.50        7.85       7.64          7.94         7.79        7.61        7.66       8.24        7.65         7.50       7.44         7.39         7.66        7.76

 10    CROWNE PLAZA HOTELS         8.28        7.55       7.02          7.87         7.53        7.44        7.74       8.19        8.09         7.53       7.50         7.38         7.62        7.67

 11    EMBASSY SUITES HOTELS       8.34        7.57       6.93          7.41         7.45        7.74        6.92       7.90        7.82         7.57       7.25         7.38         7.70        7.54

 12    DOUBLETREE HOTELS           8.35        7.39       6.88          7.49         7.29        7.75        7.14       7.86        7.74         7.13       7.02         7.17         7.42        7.43

 13    ADAM’S MARK HOTELS          7.74        6.72       6.70          7.20         6.93        7.33        7.00       7.26        7.35         6.94       6.69         6.45         6.89        7.02


20         Monday, February 9, 2004                                                 www.btnonline.com                                                                       Business Travel News
                                     Special Report: Top U.S. Hotel Chain Survey

Trading Down Helps Courtyard Top Mid W/ F&B Hotels
                                   BY BRUCE SERLEN                                         hotels already are equipped with full         president of brand management.


W
            ith more businesses trading down, midprice with food and beverage vet-         kitchens, so the fresh salads and sand-           Undertaking a conversion is a com-
            eran Courtyard by Marriott jumped from fourth place in last year’s ho-         wiches we expect to stock can be pre-         plicated process. “We do a full product
            tel chain survey to take the number-one spot this year, beating out two        pared daily right onsite,” he said.           improvement plan on these hotels. They
relative newcomers in a field of nine. Four Points by Sheraton, which last year                With 144 hotels open at year-end,         have to install Hilton’s proprietary prop-
tied for first place, placed second, fol- type, so all our new construction con-           building distribution is still a high pri-    erty management system called OnQ.
lowed by Hilton Garden Inn, which last forms to the new standards.”                        ority at Four Points, relative to such a      Plus, complimentary high-speed Inter-
year placed third.                               At year-end, Courtyard had 615 ho-        competitor as Courtyard. The same ap-         net access is a brand standard at all our
    Courtyard, which celebrated its 20th tels in its system, approximately 10 per-         plies to Hilton Garden Inn, which had         hotels, so conversion candidates have
anniversary last year, was the first mid- cent of which are in international mar-          183 properties at year-end. “The 144 in-      to install a hard-wired solution. If it’s a
price brand to promote itself to busi- kets. “The new design lends itself to               clude hotels in both downtowns and sub-       suburban setting, the owner has got to
ness travelers. Survey respondents retrofitting existing properties. We ren-               urbs, as well as resort destinations. At      make the property’s entryway look and
ranked the brand first on seven of the ovated 32 of our oldest hotels in 2003              the same time, we have probably our           feel like the pavilion, which is another of
11 criteria they were asked to measure. and expect to do about 60 more hotels              largest pipeline ever,” said Hoyt Harper,     our brand standards.”
In addition to winning points for the over the next 12 months,” Waetzig said.              senior vice president of brand manage-            In a number of development deals,
overall relationship of its price to value,      An improvement Courtyard travel-          ment at Four Points. “One of our chal-        Hilton Garden Inn is partnering with a
respondents voted the chain number one ers will see sooner rather than later               lenges moving forward is that we need         sister Hilton brand, Homewood Suites,
for the physical appearance of its prop- across the entire system is the avail-            to be flexible enough to adapt to each        which operates in the extended stay cat-
erties, its meeting facilities, helpful staff                                              market at the same time we retain our         egory. “There’s a tremendous synergy
and other criteria. Hilton Garden Inn                                                      core standards.” Like the full service        for a franchisee to have a Homewood
scored highest for its commission pay-                                                     Sheraton, whose name it shares, Four          Suites and a Hilton Garden Inn in the
ment systems and quality of its food.                                                      Points is part of Starwood Hotels & Re-       same market. The two complement each
    Chad Waetzig, Marriott senior vice                                                     sorts Worldwide. Up to now, the brand         other spectacularly,” Kurre said. “With
president for select service brand man-                                                    has been focused predominantly on new         your Homewood focused on true ex-
agement, acknowledged that 2003 was                                                        construction, but that is changing.           tended stays, you can draw on overflow
a tough year, not just for Courtyard but                                                   “Growth will accelerate faster as we move     from the Hilton Garden Inn, which is
also for the entire segment. “We did ben-                                                  from being just new builds to include se-     focused on the two-night business trav-
efit from some trade down in the busi-                                                     lect conversion opportunities,” he said.      eler, to fill the remaining rooms.”
ness travel market and actually saw some                                                   “As a result, we should be able to devel-         In one case, the two brands actually
trade up from lower price points because                                                   op more properties in downtown loca-          will share the same building. “We’re in
rates have come down over the last cou- ability of complimentary high-speed In-            tions, where barriers to entry for new        discussion with a developer in down-
ple of years,” he said. “It was a positive ternet access. “Unlike at full service ho-      construction tend to be higher.”              town Baltimore on such a cluster pro-
year for Courtyard, however, in that we tels, our travelers aren’t always able to              The brand also is expanding offshore.     ject, but Homewood would have its dis-
increased our trial. It was also a positive expense a charge like this, but at the         “We have a number of new build prop-          tinct entrance and we’d have ours.”
year from the standpoint of the work same time they tell us they place a high              erties opening in 2004 in Europe, the             Like Courtyard and Hilton Garden
we’re doing to reinvent the brand.”           value on high-speed connectivity. What       Middle East and Latin America. Right          Inn, Four Points offers complimentary
    As part of that overhaul, Waetzig and they really have come to expect is, ‘I           now, we have 25 Four Points outside the       high-speed Internet access. It became a
his team went back to their core busi- want you to have it and then, if you do             United States, so we’re already a fairly      brand standard in its North America ho-
ness travel audience. “In our market re- have it, I want it for free,’ ” he said.          international brand,” Harper said.            tels last month. “High-speed simply has
search, we asked these travelers what            A second upgrade Waetzig expects              Like Four Points, Hilton Garden Inn       become a business necessity for people
they needed for the 21st century,” he to be a brand standard by the end of                 is primarily a new build concept that         today,” Harper said. “When we first
said. “From what we learned, we’ve pur- 2004 is the Market Pantry, a grab-and-             has begun doing conversions selective-        looked at it, we thought it was a feature
sued a two-prong approach. We went go food and beverage concept. “It’s our                 ly. “We probably have 125 opportuni-          guests would like to have. Gradually, it
back to our oldest hotels and started to solution to providing food to our cus-            ties a year that come up for conversions,     went from a ‘nice to have’ to a ‘we think
incorporate a new lobby and guest tomers 24/7. An advantage at Courtyard                   but it’s unlikely we do more than five a      it could be a strategic advantage.’ Then,
room. We also introduced a new proto- in implementing the idea was that the                year,” said Adrian Kurre, senior vice         overnight, it became ‘a must-have.’ ”


Country Inns Ousts Hampton As Leader In Mid W/O F&B
                          BY BRUCE SERLEN                                its in-room business ameni-          portant to the segment.”            of these are Carlson-owned.


W
              inds of change significantly reshuffled brands this year   ties. Holiday Inn Express               While the supply pipeline        “We need projects that give us
              in the hotel survey’s crowded midprice without food        placed highest for its corpo-        for new development shrunk          good brand exposure,” said
              and beverage category. At the top of the ranking, Coun-    rate rate programs.                  across all price points during      Nancy Johnson, Country Inns
try Inns & Suites by Carlson swept into the number-one slot                  According to industry data,      the recession, midprice brands      executive vice president and
and bumped out Hampton, Suites and Comfort Suites.                       the midprice without food and        in particular have continued        brand leader. “Doing corporate
which fell to third place in a            Country Inns received the      beverage segment in 2003 out-        actively to pursue expansion,       development ensures the brand
field of 10. Country Inns last highest ratings from survey re-           performed most price points,         in part because they mostly         gets this kind of recognition. It’s
year did not receive sufficient spondents on five of the 10 cri-         in part, because of the type trav-   work on a franchise model           what we call the billboard ef-
usage by survey respondents teria against which they were                eler these brands attract. “On       where developers assume most        fect. In terms of long-term
to merit inclusion in the final asked to measure brands. In ad-          the whole, our business cus-         of the risk and franchise fees      growth, entering a market with
listing. Occupying the runner- dition to the overall relationship        tomer is the mid-level, profes-      can be highly lucrative.            a big banner hotel generates in-
up position this year was Fair- of price to value at its proper-         sional, managerial, technical           During the year, Country         terest from franchisees for ho-
field Inn by Marriott, up from ties, Country Inns won for ease           traveler who continues to trav-      Inns stressed development of        tels in the surrounding area.”
the number-five slot last year. in arranging individual and              el no matter what happens with       hotels larger than its usual pro-      As for distribution, Fairfield
AmeriSuites, last year’s run- group travel, meeting facilities           the economy,” said Phil Cordell,     totype in or near downtown lo-      is at another level, having
ner-up, slipped to number and hotel physical appearance.                 senior vice president of brand       cations. One opened at Newark       opened its 500th hotel in 2003.
four. Other brands not on Fairfield received top ratings for             management for Hampton,              Airport and others are in vari-     The year ended with 521. Ap-
2002’s list making an ap- its commission payment sys-                    which is part of Hilton Hotels       ous stages of development in        proximately 20 to 30 hotels are
p e a r a n c e t h i s y e a r a r e tems and its helpful, courteous    Corp. “In many cases, these          New Orleans, Washington, D.C.,      expected to join the brand each
SpringHill Suites by Mar- staff, while AmeriSuites was                   customers are driving and trav-      and San Diego. Unlike most of       year. The 500th was in Ben-
riott, Wingate Inns Interna- singled out for the quality of              el frequently, which is also         the brand’s 337 properties,         tonville/Rogers, Ark., near the
t i o n a l , L a Q u i n t a I n n & both its business centers and      why their business is so im-         which are franchises, a number                    Continued on page 23

22       Monday, February 9, 2004                                             www.btnonline.com                                                             Business Travel News
                                    Special Report: Top U.S. Hotel Chain Survey

                                    MIDPRICE WITH FOOD AND BEVERAGE
                                            ARRANGE        ARRANGE        FACILITIES        CORPORATE       COMMISSION       QUALITY        HELPFUL       PHYSICAL         QUALITY         QUALITY           OVERALL      OVERALL
                                           INDIVIDUAL       GROUP        NON-RESORT            RATE          PAYMENT           OF          COURTEOUS     APPEARANCE       BUSINESS         IN-ROOM          PRICE-VALUE   AVERAGE
 Rank   Chain                                TRAVEL         TRAVEL        MEETINGS          PROGRAMS         SYSTEMS          FOOD           STAFF         HOTELS          CENTER       BUS. AMENITIES     RELATIONSHIP    SCORE

   1    COURTYARD BY MARRIOTT                8.63            7.93             7.61            7.74            7.98            7.31            8.43           8.30            7.75           7.77               8.03        7.95
   2    FOUR POINTS BY SHERATON              8.56            7.89             7.51            7.95            7.98            7.40            8.23           8.02            7.36            7.55              7.75        7.84
   3    HILTON GARDEN INN                    8.62            7.69             7.33            7.67            8.04            7.43            8.37           8.20            7.36            7.36              7.82        7.81
   4    CLUB HOTELS BY DOUBLETREE            8.75            7.65             7.29            7.96            7.64            6.96            7.93           8.04            7.22            7.50              7.78        7.70
   5    HOLIDAY INN                          8.46            7.56             7.38            7.96            7.71            6.92            7.87           7.32            6.89            7.03              7.61        7.52
   6    BEST WESTERN INT’L                   8.13            7.27             6.58            7.17            6.91            6.18            7.72           7.13            6.32            6.42              7.44        7.02
   6    CLARION                              7.58            6.71             6.78            7.45            7.31            6.70            7.36           7.09            6.67            6.41              7.13        7.02
   8    QUALITY INNS                         7.09            6.82             6.56            6.90            7.25            6.53            7.04           6.73            6.37            6.24              6.70        6.75
   9    RAMADA INNS                          7.48            6.25             6.05            6.89            6.71            6.15            6.66           6.48            6.13            6.30              6.62        6.52




                                 MIDPRICE WITHOUT FOOD AND BEVERAGE
                                            ARRANGE          ARRANGE           FACILITIES        CORPORATE        COMMISSION          HELPFUL         PHYSICAL          QUALITY          QUALITY           OVERALL        OVERALL
                                           INDIVIDUAL         GROUP           NON-RESORT            RATE           PAYMENT           COURTEOUS       APPEARANCE        BUSINESS          IN-ROOM          PRICE-VALUE     AVERAGE
 Rank   Chain                                TRAVEL           TRAVEL           MEETINGS          PROGRAMS          SYSTEMS             STAFF           HOTELS           CENTER        BUS. AMENITIES     RELATIONSHIP      SCORE


   1    COUNTRY INNS & SUITES                8.87             8.75               7.86                7.23             7.25             8.29            8.25              7.08              7.31              8.36          7.92

   2    FAIRFIELD INN BY MARRIOTT            8.45             7.28               6.23                7.58             7.97             8.32            8.06              6.94              7.17              7.95          7.59

   3    HAMPTON                              8.61             7.54               6.54                7.57             7.68             7.96            7.83              6.89              7.02              7.91          7.55

   4    AMERISUITES                          8.42             7.14               6.41                7.37             6.75             7.86            8.19              7.12              7.63              7.91          7.48

   5    SPRINGHILL BY MARRIOTT               8.38             7.38               6.72                7.30             7.79             7.75            8.00              7.11              6.95              7.35          7.47

   6    HOLIDAY INN EXPRESS                  8.20             6.97               6.31                7.69             7.58             7.68            7.29              6.35              6.49              7.72          7.23

   7    LA QUINTA INN & SUITES               8.00             6.46               6.00                7.15             7.13             7.83            7.43              6.95              6.86              7.83          7.16

   7    WINGATE INNS INT’L                   8.19             6.75               6.36                6.36             7.43             7.69            7.94              6.67              6.50              7.75          7.16

   9    COMFORT SUITES                       7.92             6.88               6.12                7.14             7.07             7.60            7.17              6.25              6.83              7.48          7.04

  10    COMFORT INNS                         7.66             6.58               5.63                7.35             6.40             7.41            6.48              5.96              6.08              7.10          6.66




                                           UPPER UPSCALE EXTENDED STAY
                                                 ARRANGE            CORPORATE          COMMISSION            HELPFUL           PHYSICAL           QUALITY            QUALITY           QUALITY             OVERALL        OVERALL
                                                INDIVIDUAL             RATE             PAYMENT             COURTEOUS         APPEARANCE          IN-ROOM           BUSINESS           IN-ROOM           PRICE-VALUE      AVERAGE
 Rank   Chain                                     TRAVEL            PROGRAMS            SYSTEMS               STAFF             HOTELS           AMENITIES           CENTER         BUS. AMENITIES       RELATIONSHIP      SCORE


   1    HOMEWOOD SUITES BY HILTON                   8.82               7.74               7.51                 8.54              8.61                7.99             7.44              7.36                8.24           8.03

   2    RESIDENCE INN BY MARRIOTT                   8.91               7.69               7.59                8.61               8.34                7.93             7.59              7.50                7.97           8.01

   3    STAYBRIDGE SUITES                           8.34               7.53               7.59                 8.06              8.14                7.94             7.52              7.65                7.97           7.86

   4    SUMMERFIELD SUITES                          8.63               7.62              7.78                  8.22              8.00                7.81             7.04              7.31                7.67           7.79

   5    HAWTHORN SUITES                             8.21               7.13               7.39                 7.98              7.92                7.43             6.98              7.10                7.65           7.53

   6    WOODFIN SUITES                              8.09               7.50               7.07                 7.87              7.73                7.59             6.90              7.05                7.50           7.48




NEW PROTOTYPES AID MID W/O F&B EXPANSION                                                                     Las Vegas that includes a Residence Inn,
                                                                                                             Courtyard and a Fairfield Inn,” Brown
                                                                                                                                                                          nounced in 2002. Examples of the new
                                                                                                                                                                          “small-town Hampton” started to come
Continued from page 22                     the travel buyer, looks good to the trav-                         said. “There are just certain synergies                      online in 2003. Four are open presently
corporate headquarters of Wal-Mart.        eler and, from a cost perspective for new                         with these projects, if only from a seg-                     and an additional 12 are in development.
According to Liam Brown, senior vice       franchisees, is competitive too,” he said.                        ment perspective, that is, being able to                     “The prototype is working out for us. As
president for brand management, the           As with Country Inns & Suites, down-                           offer buyers and travelers product of-                       with the launch of any new design,
Arkansas property embodies what is still   town locations are attractive to Fairfield,                       ferings that address their needs, what-                      there’s caution initially as people wait
the dominant Fairfield prototype—a         but so are cluster projects that include                          ever they may be.”                                           to see what guest acceptance is like and
solidly suburban or highway location.      multiple midprice Marriott brands.                                   At Hampton, a smaller prototype de-                       how the prototype works financially
“We think it’s a competitive product for   “Such a project opened in December in                             signed for tertiary markets was an-                                                           Continued on page 26

Business Travel News                                                                     www.btnonline.com                                                                      Monday, February 9, 2004                          23
                                   Special Report: Top U.S. Hotel Chain Survey

                                                    UPSCALE EXTENDED STAY
                                                   ARRANGE         CORPORATE      COMMISSION       HELPFUL          PHYSICAL            QUALITY          QUALITY             QUALITY           OVERALL       OVERALL
                                                  INDIVIDUAL          RATE         PAYMENT        COURTEOUS        APPEARANCE           IN-ROOM         BUSINESS             IN-ROOM          PRICE-VALUE    AVERAGE
 Rank    Chain                                      TRAVEL         PROGRAMS        SYSTEMS          STAFF            HOTELS            AMENITIES         CENTER           BUS. AMENITIES     RELATIONSHIP     SCORE


     1   TOWNEPLACE SUITES BY MARRIOTT              8.81             7.76           7.55             8.44             8.24               7.82            7.10                 7.39                8.13        7.91

     2   CANDLEWOOD SUITES                          8.42             7.66           7.07             8.15             7.76               7.39            6.74                 6.91                7.91        7.56




                                                   MIDPRICE EXTENDED STAY
                                                   ARRANGE           CORPORATE       COMMISSION          HELPFUL              PHYSICAL              QUALITY             QUALITY               OVERALL        OVERALL
                                                  INDIVIDUAL            RATE          PAYMENT           COURTEOUS            APPEARANCE             IN-ROOM             IN-ROOM              PRICE-VALUE     AVERAGE
 Rank    Chain                                      TRAVEL           PROGRAMS         SYSTEMS             STAFF                HOTELS              AMENITIES         BUS. AMENITIES         RELATIONSHIP      SCORE


     1   WELLESLEY INNS & SUITES                    8.44                N/A             6.95                7.89                7.00                6.71                   6.44                7.37           7.26

     2   EXTENDED STAY AMERICA                      7.84                N/A             7.07                7.31                6.85                 6.43                  6.09                7.14           6.96

     3   HOMESTEAD STUDIO SUITES                    7.84                N/A             6.60                7.50                7.15                 6.17                  5.81                7.00           6.87




                                                                                  ECONOMY
                                                                      ARRANGE            CORPORATE            COMMISSION                HELPFUL                 PHYSICAL               OVERALL              OVERALL
                                                                     INDIVIDUAL             RATE               PAYMENT                 COURTEOUS               APPEARANCE             PRICE-VALUE           AVERAGE
 Rank    Chain                                                         TRAVEL            PROGRAMS              SYSTEMS                   STAFF                   HOTELS              RELATIONSHIP            SCORE


     1   BEST INNS                                                     8.20                6.31                    7.88                   7.56                     6.86                    7.53              7.39

     2   RED ROOF INNS                                                 8.15                6.72                    6.91                   7.46                   7.28                      7.38              7.32

     3   RAMADA LIMITED                                                7.95                6.43                    7.02                   7.48                     6.85                    7.43              7.19

     4   DAYS INN                                                      8.04                6.37                    6.97                   7.33                     6.65                    7.28              7.11

     5   TRAVELODGE                                                    7.38                5.89                    7.00                   7.29                     6.45                    6.84              6.81

     6   SUPER 8                                                       7.65                5.06                    6.60                   7.32                     6.29                    6.59              6.58




                                                                                  BUDGET
                                                                      ARRANGE            CORPORATE            COMMISSION                HELPFUL                 PHYSICAL               OVERALL              OVERALL
                                                                     INDIVIDUAL             RATE               PAYMENT                 COURTEOUS               APPEARANCE             PRICE-VALUE           AVERAGE
 Rank    Chain                                                         TRAVEL            PROGRAMS              SYSTEMS                   STAFF                   HOTELS              RELATIONSHIP            SCORE

     1   MICROTEL INNS                                                  8.00               6.64                    6.29                   8.08                   7.42                      8.00              7.40

     2   MOTEL 6                                                        8.06               6.53                    6.69                   7.40                     6.63                    7.12              7.07

     3   ECONO LODGE                                                    8.09               6.24                    6.50                   7.24                     6.60                    7.32              7.00




Methodology For BTN Top U.S. Hotel Chain Survey
B
        usiness Travel News’ Top U.S. Hotel Chain Sur-             There are 10 hotel segments in this year’s survey:                        This survey only presents data about those hotel
        vey is an annual measure of corporate travel           deluxe, upper upscale, upscale, midprice with food                         chains for which respondents reported statistically
        buyers’ opinions of the properties their com-          and beverage, midprice without F&B, economy, bud-                          significant usage.
panies and clients use.                                        get and extended stay, which is broken into three seg-                        Not every respondent rated every hotel company
   BTN sent out five different questionnaires to a ran-        ments, upper upscale, upscale and midprice.                                in every category, and those who left out a category in
dom sample of 6,000 corporate travel managers and                  Depending on the segment, the hotels were rated on                     their ratings were not included in the average rating
business travel agents in its subscriber base, asking          anywhere from six to 13 attributes, including quality                      for that category or company.
them to rank hotels in various segments and cate-              of food, physical appearance, corporate rate programs                         The overall average weighted score indicates that
gories. BTN tabulated 605 usable responses.                    and quality of the business center and meeting facil-                      the score was affected by the fact that some cate-
   To qualify to rate a particular hotel company, re-          ities. Ratings are on a numerical scale from one to 10,                    gories drew more responses than others. The weight-
spondents were required to have done business with             with the number highlighted indicating the high scor-                      ed score assigns more weight to the categories rated
that chain within the past 12 months.                          er for that category.                                                      more frequently.
24        Monday, February 9, 2004                                                www.btnonline.com                                                                                        Business Travel News
                                 Special Report: Top U.S. Hotel Chain Survey

Homewood, TownePlace, Wellesley Inns Top Ext. Stay
                                BY BRUCE SERLEN                                    lot of unmet need for a moderately              very effective,” Bates said. She noted that


I
     n a neck-and-neck finish, Homewood Suites by Hilton edged out Residence       priced product there,” Bates said.              the mix of business at both brands in 2003
     Inn by Marriott to lock in the number-one position in the upper upscale ex-      Markets that have both a Residence           shifted a bit toward transient stays. “In
     tended stay category in this year’s hotel chain survey. Staybridge Suites,    Inn and a TownePlace Suites see opera-          the weak economy we’ve just come
which is part of InterContinental Hotels Group, ended a more distant third,        tional synergies, particularly with the sales   through, the hotels have tried to get the
while Summerfield Suites by Wynd- is a Residence Inn that’s doing well.            effort. “The properties will leverage a di-     customers they can. Yet, we try to hold
ham, last year’s top vote getter, plum- Market analysis can indicate there’s a     rector of sales and a sales team. It’s proven                         Continued on page 26
meted to fourth place.
    Reversals this year also occurred in
the survey’s upscale and midprice ex-
tended stay voting. In the upscale tier,
TownePlace Suites by Marriott switched
places with Candlewood Suites from
last year’s survey to capture the golden
ring. Similarly, Wellesley Inns & Suites
overtook Extended Stay America to pre-
vail in the midprice tier. Both Candle-
wood Suites and Extended Stay Amer-
ica had to settle for second place.
    Voting on nine criteria in the upper
upscale race, survey respondents ranked
Homewood Suites best for its corporate
rate programs, the appearance of its
properties, the quality of its in-room
amenities and the overall relationship
of the brand’s price to value.
    Voting on the same criteria in the up-
scale match-up, respondents gave
TownePlace Suites the highest scores
across the board. Voting on seven cri-
teria in the midprice race, respondents
named Wellesley the best in five of the
seven, including the chain’s overall price-
value relationship.
    “From a profitability standpoint,
2003 was a tough year across the entire
industry, yet from the development per-
spective, we did more deals last year
than ever before,” said Jim Holthouser,
Homewood senior vice president for
brand management. “Granted, the num-
ber of openings slowed down in 2003
to 12, but the number of approvals in-
creased, which means there’ll be a rise
in the number of new properties coming
online in 2004 and 2005.” At year-end,
130 hotels were open. By contrast, Res-
idence Inn, Homewood’s competitor in
the upper upscale tier, had 445 proper-
ties open.
    “Development is occurring over all
regions of the country and in Canada,”
he said. “Most will be suburban and new
builds, but we’re also doing a lot of ur-
ban development and conversions on a
selective basis. Our first property in the
metropolitan New York area, for ex-
ample, will be in Edgewater, N.J., open-
ing in the second half of this year.”
    TownePlace opened seven hotels in
2003 for a total of 109. Laura Bates, senior
vice president of extended stay brands at
Marriott International, expects the pace
of development to accelerate in the next
few years as the economy rebounds. “We
have looked at some high opportunity
markets. We focus, for example, on ar-
eas where there is a high degree of gov-
ernment and military business, which
generate a lot of bookings for a brand
such as TownePlace,” she said.
    The brand’s connection to the more
established Residence Inn has helped.
“We also focus on markets where there
Business Travel News                                                   www.btnonline.com                                               Monday, February 9, 2004            25
                                      Special Report: Top U.S. Hotel Chain Survey

Best Inns, Microtel Repeat As Economy, Budget Winners
                                    BY BRUCE SERLEN                                         el accounts for the remainder.”               at economy and budget brands have


U
         S Franchise Systems this year achieved success in its second consecutive              The typical business traveler using        been chronic. Such chains as Days Inn
         double-header in the BTN hotel chain survey, with its Best Inns & Suites           these brands is the road warrior on a         began approaching the problem in 2003.
         and Microtel Inns & Suites brands capturing the number-one spots in the            tight expense account. “It’s manufac-         “We took our worst performing prop-
economy and budget categories, respectively.                                                turers’ reps and even construction work-      erties and told them either to clean up
    Red Roof Inns, which is part of Accor In fact, we had three groundbreakings             ers and truckers,” he said. “They’ve con-     or get out,” said Steven Rudnitsky, Cen-
Hotels, finished in second place this year this January that we hadn’t expected be-         tinued to travel through the downturn,        dant Hotel Group chairman and CEO,
in the economy category out of a field of cause the economy has been going in the           which accounts for the fact that, gen-        told BTN last fall (BTN, Oct. 20, 2003).
six. Red Roof moved up a notch from right direction and developers are start-               erally, our occupancies last year were        Consequently, Cendant put about 600
2002, bumping Days Inn from the num- ing to feel more confident about moving                up considerably.”                             properties on notice within the Days Inn
ber-two berth. Days Inn, which is part of forward with new projects.”                          This traveler profile affects new          brand, as well as Ramada Limited, Su-
the Cendant Hotel Group, fell to fourth          Best Inns had a more difficult year,       property development. “As a result of         per 8 and other of its economy and bud-
place. Best Inns was rated highest in four which is why Leven said the first-place          who our target guest is, having a pres-       get brands. “Workout plans were put in
of the six criteria that survey respondents finish especially was meaningful. “The          ence in the major markets is not as im-       place and many corrected their prob-
were asked to measure, including the number of brands out there like Best                   portant as it is for full-service hotels.     lems,” Rudnitsky said. Roughly half,
brand’s overall price-value relationship. Inns is just enormous, so it’s difficult          The more hotels these brands have in          however, ended up leaving the system
    Motel 6, which also is part of Accor, for the brand to compete.”                        major markets, the more responsive            by the end of 2003.
finished second in the budget segment            While hotels at these price points         they can be. In our case, proliferation of       At USFS, a major goal for 2004 is the
out of a field of three. It occupied the num- welcome business travelers, the corpo-        product is more of a priority. In the         rollout of a common property manage-
ber-three spot last year. Microtel earned rate market is not as crucial to them as          same way, you need more of this kind          ment system. “With it, each brand will
highest scores in four of the six criteria, it is to brands at the upscale, upper up-       of product to be considered a nation-         have its own unified platform, and the
including price-value relationship.           scale and deluxe levels. “The higher the      ally known brand than you do at the           hotels will be able to talk to each other,”
    According to Mike Leven, chairman level of hotel, the more dependent you                full-service categories.”                     Leven said. Implementing similar sys-
and CEO of USFS, Microtel, in particu- are on major corporate business,” Lev-                  At year-end 2003, Microtel had more        tems also has been a priority at the ma-
lar, had a strong year in 2003. “The brand en said. “Consequently, you’re not de-           than 250 properties; Best Inns had more       jor multi-brand companies. Hilton Ho-
has been moving in a positive direction. pending on the Fortune 500 companies               than 100. “What Microtel needs is an-         tels Corp., in fact, launched its version
It’s got great satisfaction scores,” he said. or even the Fortune 1000. You’re de-          other 50 to 100 hotels from Texas east,”      in 2003. “We can’t develop the kind of
“In terms of new projects, we saw a real pending on local little companies and              Leven said.                                   systems we need for revenue manage-
increase in the pace of development in individual entrepreneurs to fill your ho-               Given their price points, concerns         ment, customer relationship marketing
the last three or four months of the year. tel. It’s the drive business. Leisure trav-      about quality and consistency of service      and data transmission without it.”


EXT. STAY GROWTH PERSISTS                                      ing at Prime Hospitality, Wellesley’s parent, some
                                                               properties seek extended stay bookings, while others
                                                                                                                           just hard for a regular hotel room to compete in that
                                                                                                                           market because they’re not geared to provide the ser-
Continued from page 25                                         focus on the midprice without food and beverage mar-        vice that extended stay travelers need and want,”
tight on extended stay occupancy, meaning five nights          ket. “It’s almost like two different brands within the      O’Hanlon said.
or more, because that’s the core of our model.”                brand, but we certainly have a number of dedicated ex-         As 2003 ended, the competitive landscape for ex-
   Holthouser and Bates both said they still encounter         tended stay properties,” she said.                                             tended stay changed when Inter-
confusion about extended stay on the part of travel               Within the industry, extended                                               Continental Hotels Group acquired
buyers, but that the situation is improving. Bates also        stay still is expanding. “It’s a unique                                        the Candlewood Suites brand. IHG
has found growing understanding of the respective ex-          offering. The full kitchen comes in                                            now joins Marriott in operating
tended stay tiers. “Buyers increasingly are aware of the       handy, for example, when you don’t                                             within two extended stay tiers. IHG
points of distinction, both in terms of the space and          want to go out to eat every night.                                             had the option of merging Candle-
amenities,” she said. “As a result, you’ll see a more junior   When travelers are going to be in a                                            wood into its existing Staybridge
person stay at a TownePlace, while a senior person is          location for a particular amount of                                            Suites, but chose to manage each
booked at a Residence Inn. Both brands may be in the           time or relocating, they’re looking                                            brand separately. “Now, with Can-
buyer’s preferred program, but the different bookings          for things like this. At the same time,                                        dlewood, we’ve got a very clear dis-
will reflect the travelers’ travel budgets.”                   they’re not necessarily looking for the more luxurious      tinction between the two offerings,” IHG president of
   Inadvertently confusing the matter, Wellesley Inns          amenities found at full service hotels.”                    the Americas Stevan Porter told Business Travel News
& Suites straddles two bases. According to Maureen                Transient business hotels inevitably are at a disad-     (BTN, Jan. 19). “Our intention going forward is to
O’Hanlon, senior vice president of sales and market-           vantage when they accept extended stay bookings. “It’s      build both brands.”


DELUXE HOTELIERS UPHOLD SERVICE                                           ings as a market segment.
                                                                             “Given our level of service,
                                                                                                              a resort in a known destination
                                                                                                              where attendees can meet free
                                                                                                                                                   group facilities available in that
                                                                                                                                                   destination’s mega-hotels.
Continued from page 16               director of the St. Regis Los An-    we’re attracting mostly small to    of distractions,” said Martin        “We’re housed at the top of the
ducting transitions,” said gen-      geles. “The concept might work       midsize, senior-level meetings,     Nicholson, general manager of        Mandalay Bay tower with our
eral manager of the Fairmont         at the St. Regises in New York       including board of director         the Ritz-Carlton Rose Hall, lo-      own discreet entrance,” said
Washington George Terpilows-         and London, but not here, so         meetings. Considering all the       cated in Jamaica.                    Kathy Van Vechten, director of
ki, who had been in that role        we replaced it with an upgrad-       global security concerns plan-         Likewise, meetings at the         marketing, “so even our loca-
when Fairmont acquired the ho-       ed guest relations department.       ners faced in 2003, they seemed     Four Seasons Las Vegas tend to       tion is a contrast to the typical
tel in late-2002. “Buyers and        The attention is still hands-on,     to like the relative seclusion of   supplement the large-scale           hotel on the Strip.”
meeting planners are happy           but not quite so formal.”
when improvements are made,
but, at the deluxe level in par-
                                        Like Fairmont, both Ritz-
                                     Carlton and Four Seasons con-        HAMPTON BROADENS APPEAL                                levels, including breakfast, high-speed Internet
                                                                                                                                 access, etc., the experience is basically the same,”
ticular, renovations have to be      tinued their aggressive expan-       Continued from page 23                                 he said. “The only difference is that guests who
done in a way that’s not dis-        sions in 2003. Ritz-Carlton          from the franchisee’s perspective,” Hampton’s          are brand loyal now have a place to stay in des-
ruptive while they’re with you.”     opened properties in Berlin, Es-     Cordell said. “They’re basically creating demand       tinations where they couldn’t stay previously.
   Meanwhile, individual prop-       toril, Portugal, Orlando and Mi-     for a branded hotel in markets where there was         Plus, they can earn their frequency points.”
erties have to be ready to adapt     ami, while Four Seasons de-          no demand before or where demand existed, but              Despite the number of new hotels being built
brand standards to suit their        buted in the Bahamas, Costa          there was no supply.”                                  at these brands, the brand managers still express
destinations. “We found that         Rica, Jackson Hole, Wyo., and           According to Cordell, travelers don’t make a        a concern that development not become pro-for-
guests didn’t necessarily want       Miami. As the brands have ex-        distinction between the small-town and regular         ma. “As we go forward, you want to be sure that
the traditional St. Regis butler     panded, the percentage of resort     size Hamptons. “We’ve done extensive satisfac-         each hotel in each location is set up for success,”
service,” said Bruno Brunner,        development has increased, with      tion surveys to see if guests perceive a difference.   Fairfield’s Brown said, “that it is the appropri-
vice president and managing          a greater focus on group meet-       They don’t. In terms of amenities and service          ate build for the appropriate area.”
26       Monday, February 9, 2004                                              www.btnonline.com                                                             Business Travel News