Special Report: Top U.S. Hotel Chain Survey
Buyers Held All The Cards In ’03, Tide May Turn In ’04
BY BRUCE SERLEN
F
ortunately for buyers, negotiations for 2004 room rates, in most cases, were well underway last fall when the hotel rebound really began to gain steam. Consequently, the industry consensus is that buyers managed to retain the upper hand—at least for one more year. While the U.S. lodging industry’s performance basically was flat in the first half of 2003, occupancy rates and room revenues improved significantly in the second half. The gains were substantial enough to give hoteliers hope that the severe industry downturn was winding down after a two-and-a-half-year siege. At year-end, industry analysts shifted their focus to the first months of 2004 to determine if a rebound really was taking place and if it was sustainable. Against this backdrop of change, the Business Travel News survey of top U.S. hotel chains particularly is revealing this year for the insight it provides into buyers’ brand preferences across various industry price points and categories. The state of the market notwithstanding, the survey shows buyers to be demanding when it comes to having their programs’ requirements met. Quality and consistency remain paramount concerns. Among the large multi-brand companies, Marriott International fared especially well in this year’s voting. Four of its brands—RitzCarlton, JW Marriott, Courtyard and TownePlace Suites—placed first in their respective categories. Last year, none carried away top honors. By contrast, only one Hilton Hotels Corp. brand—Homewood Suites—captured a top slot, while Starwood Hotels & Resorts Worldwide could not even make this claim. As in previous years, survey respondents were asked to rank hotel chains on a range of criteria culminating in the brands’ overall relationship of price to value. “Much of your leverage depends on how successful your relationship with the hotel has been in the past,” said Bill Davidson, manager of corporate travel and meeting services at International Sematech in Austin, Texas. “Regardless of the economy, you were in a much better position to drive bargains if you delivered on past commitments.” Buyers who had consolidated their programs in re-
sponse to cutbacks in travel were in a better negotiating position up to a point. “By cutting back on the number of properties we use in a market, we were able to drive greater marketshare to the remaining suppliers,” said Kari Knoll Kesler, sourcing specialist for travel, meetings and promotions for ING Americas in Minneapolis. “But you reach a point where it doesn’t make sense to consolidate any further if you can’t guarantee availability.” Rate loading remained a particular sore point. “Year after year, it still is a chronic problem that won’t go away and no one seems able to address it successfully,” said Greg Herrera, corporate travel manager at Raytheon Co., in Long Beach, Calif., at last year’s annual meeting of the National Business Travel Association.
These concerns aside, the growing impact of discount Internet rates hovered like a storm cloud over the entire industry. By year-end, an increasing number of hotel companies, including such major players as Marriott, Hilton and Starwood, had implemented strategies that enabled them to take back from the third-party sites at least some pricing control over their inventory. Travel buyers likewise were frustrated when Internet-only rates undercut their negotiated rates. Adding salt to the wound, buyers were not able to get credit for these stays toward the volume commitments they had made to these same chains.
For 2003, U.S. hotels’ performance basically was flat from 2002. According to Smith Travel Research, occupancy rates reached 59.2 percent, up 0.2 percent versus the previous year. Average daily rate declined 0.1 percent to $83.28. With 2003’s performance, ADR fell three years in a row. “This was the first time since 1930-1933 that nominal ADR declined consecutively this way,” said Kirk Reed of PricewaterhouseCooper’s hospitality and leisure financial advisory services group in New York. Meanwhile, revenue per available room, which is a more accurate indicator of hotel profitability, last year increased 0.2 percent to $49.34, compared with 2002. Industry room supply increased 1.3 percent in 2003, while demand in terms of number of room nights sold gained 1.6 percent. Full-year 2003 room revenue increased 1.5 percent to $79.9 billion. In contrast to such lukewarm results, industry analysts are much more bullish on 2004, mostly because hotel performance strengthened appreciably in the third and fourth quarters. “Industry operating performance began to gain traction in the second half of 2003,” said STR president Mark Lomanno. “We expect this momentum to continue in 2004. Healthy demand growth combined with continued moderate room supply increases should strengthen occupancies.” STR’s forecast was based on two assumptions: that the U.S. economy continues to improve and that no major terrorist attacks occur on U.S. soil. “The worst of the recent down cycle is likely behind us,” said M. Chase Burritt, national director of hospitality services for Ernst & Young. “Demand is gradually improving, pricing is stabilizing and the development pipeline still is at relatively historic lows. These factors bode well for the industry.” PwC’s Reed projects that occupancy rates will increase to 61.2 percent in 2004 and to 61.7 percent in 2005. This is still below the occupancy levels of 63.3 percent achieved in the banner year of 2000, but it is 2.6 percent above the recent low point of 59.1 percent set in 2002. Similarly, PwC expects ADR to climb 1.9 percent in 2004 and another 3 percent in 2005. RevPAR growth will jump 5.2 percent in 2004 and then level off to growth of 3.9 percent the following year.
Ritz Receives Highest Mark In Every Deluxe Criterion
BY BRUCE SERLEN
R
itz-Carlton Hotel Co. this year not only captured the top berth in the highprofile deluxe category of the Top U.S. Hotel Chain Survey, locking in the title for the fifth consecutive year, but it swept the ballot, receiving the highest score on each of the 13 criteria survey respondents were asked to measure. Key factors ranged from ease in of two ascenders to the throne: St. Regarranging individual and group travel is Hotels & Resorts, which along with to the quality of the properties’ food and its sister Luxury Collection is part of amenities. The most telling dynamic Starwood Hotels & Resorts Worldwide, may be the brand’s overall relationship and Fairmont Hotels & Resorts, which of price to value. By contrast, Ritz-Carl- in the past two years has acquired troton last year scored highest on three of phy properties in Seattle (a former Four the 13 criteria. Seasons), Washington, D.C., and Ritz-Carlton’s triumph left its peren- Hawaii. In last year’s survey, St. Regnial rival in the deluxe tier, Four Sea- is/Luxury Collection took third place, sons Hotels & Resorts, looking more but this year Fairmont pulled out ahead, and more at home in second place, the leaving St. Regis in fourth. position it occupied last year as well. Survey respondents gave the categoThe real suspense in the deluxe rank- ry generally high scores. This warrants ing this year, however, was about nei- mention because many hotels at this ther Ritz-Carlton nor Four Seasons. price point in 2003 were under pressure Rather, interest centered on the showing to curtail amenities and services, the re16 Monday, February 9, 2004
sult of falling revenues brought on by the continuing economic downturn. “We’ve intentionally not cut back on any service that touches the guest,” said David Keamy, area director of marketing at the two Ritz-Carltons in Boston, a city whose hotels particularly have been hard hit by the recession. “People use fresh flowers in the lobby as an example, but that’s just one of a whole range of amenities that guests associate with a luxury hotel and expect to find when they stay with us.” Service remains central to the pricevalue equation. “We continue to view it as key to the hotel’s success, regardless of the economy,” said Thomas Gurtner, regional vice president and general manager of the Four Seasons Boston. While that property is in the midst of an extensive renovation that will add a new meeting room and spa, as well as
refurbish the guest rooms, Gurtner said improvements to the physical plant are no substitute for service. “If you don’t maintain service levels, no matter how much money you put into a property, it doesn’t mean anything,” he said. Gurtner is equally candid about the competition. “I don’t think we’re in the same market with too many brands, but the worst thing you can do is take your eye off your potential competitors. To some degree, every hotel in the city is potentially a competitor,” he said. “RitzCarlton has a brand recognition like Four Seasons, but realistically we compete with hotels on a geographic basis as well.” In conversions, deluxe brands have to be especially careful not to displease existing clients while putting new brand standards in place. “You hope the brand coming in is sensitive and skilled at conContinued on page 26
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Business Travel News
Special Report: Top U.S. Hotel Chain Survey
JW Marriott Triumphs Amid Upper Upscale Hotels
BY BRUCE SERLEN
J
umping from a fourth-place tie last year, JW Marriott Hotels & Resorts grabbed the number-one spot in the upper upscale category in this year’s hotel chain survey. The victory particularly was meaningful to the Marriott camp since this is only the second year that Marriott has entered the fast-growing, high-end JW in the survey as a separate entity from the core Marriott brand, which competes in the upscale category. Congratulatory slaps on the back also were in order at Paris-based Accor Hotels, whose Sofitel brand claimed the category’s number-two spot. Sofitel last year had not received sufficient usage from survey respondents even to warrant mention in the listing. Sitting out this year’s upper upscale celebration is Starwood Hotels & Resorts Worldwide, whose Westin and W brands have had a lock on the category’s top berths for the past four years. Westin, 2002’s highest-rated upper upscale brand, slipped this year to number three, while W went into virtual freefall, skidding from second place last year to seventh place this year in a field of eight. Occupying the category cellar this year was Le Meridien. A brand in financial crisis, Le Meridien lost management contracts through much of 2003. Late in the year, $1.3 billion of its senior debt was acquired by a partnership of Starwood and Lehman Brothers. On survey ballots, JW Marriott received highest scores on 10 of the 13 criteria respondents were asked to measure, including the critical relationship of price to value. Sofitel placed highest on the remaining three. Both JW and Sofitel have increased their distribution significantly in the past few years, resulting in
higher visibility among corporate travel buyers. “The strategy was to select targeted locations for business travelers in markets both domestically and internationally in 2003 and expect that approach to continue in 2004 and beyond,” said Sid Yu, Marriott senior vice president of brand management, citing 2003 JW openings in Orlando and Shanghai as representative of the brand’s two-pronged development effort. The 1,000-room Orlando property is part of Marriott’s Grande Lakes development that includes a Ritz-Carlton. Grande Lakes last month was named “deal of the year” at the American Lodging Investment Summit. To distinguish JW from Ritz-Carlton, Yu described JW as the “luxury market offering of the Marriott brand.” The properties “provide a kind of no-nonsense approach to luxury, complete with the expected business amenities.” At year-end, there were 30 properties in the portfolio, 19 of which were international. As the brand grows, Yu said there will be select opportunities to convert existing Marriotts to the JW flag. The Camelback Marriott in Scottsdale is scheduled to undergo such a reflagging in 2004. Sofitel in 2003 gained higher visibility as a result of a spate of new openings the year before, when properties came online in Chicago, Washington, D.C., and Montreal. Parent Accor in 2000 had begun a major push to build the Sofitel name in North America, after a 10-year development hiatus, opening in New York and Philadelphia. Given its still limited U.S. distribution, Sofitel relies more on its sales force to help build name recognition among corporate accounts than large U.S.-based multi-brand competitors might. “The property level
can be a great lead source to benefit the rest of the network, and the rest of the network can benefit individual hotels,” said vice president of marketing for Accor business and leisure division Scott Wiseman, who was formerly general manager of the Sofitel Philadelphia. The group business also has been a focus of many of the Sofitels as a way of making inroads into a corporate account’s transient program. In Philadelphia, for example, a large account will have a dedicated transient sales person and a separate group sales person, Wiseman said. Westin in 2003 also stressed development, opening U.S. properties in Dallas, Charlotte and Las Vegas and, internationally, in Leipzig, Kuala Lumpur and Bangkok, among others. At year-end, distribution stood at 123. At the same time, however, the brand has expended equal energy expanding its service levels. Westin four years ago launched an upgraded bed product, which was the start of what Sue Brush, senior vice president for brand management, referred to as the “Heavenly phenomena.” The so-called Heavenly Bed now is installed in all Westins in North America. Bathroom and upgraded exercise facilities followed. “Guest satisfaction as a result of the bed has risen. We’ve also seen a halo effect. Overall satisfaction ratings are up because the guest walks in the room and it’s an absolute wow. Then they experience the Heavenly Bath,” Brush said. The Westin Workout, which in 2003 was installed in 23 hotels and will be in place at all North America hotels by year-end, “is the tip of the iceberg,” Brush said. “We’re now testing some in-room workout equipment and perhaps spa services, which have a lot of potential as well.” Another opportunity is food and beverage, she said: “It’s definitely a grab-and-go culture, even at our price point, and we would like to figure out how to address that.”
Hyatt Takes Home The Upscale Trophy Once Again
BY BRUCE SERLEN
H
yatt Hotels & Resorts this year extended its hold on the prized first-place position in the upscale category of the Top U.S. Hotel Chain Survey for the sixth consecutive year. The most crowded survey category with a field of 13, the upscale tier includes such main stay, business travel-friendly brands as the core Marriott, Hilton and Sheraton commission payment systems, quality chains. Hyatt prevailed over the pack, of food and the overall relationship of if only by a small margin. price to value. Walt Disney scored highThe big news in the upscale catego- est on five of the 13, for its facilities for ry this year, however, was the come- resort and non-resort meetings, its helpfrom-behind showing of Renaissance ful staff, the physical appearance of its Hotels & Resorts, which is part of Mar- hotels and the quality of its in-room riott International. Renaissance one year amenities. Hilton International, sixth ago did not have sufficient usage by sur- place overall, received top scores for ease vey respondents to warrant inclusion in in arranging individual travel. the final ranking. This year, it catapultU.S. upscale hotels in 2004 are exed to second place behind Hyatt and pected to perform significantly better ahead of third-place Walt Disney World than in 2003 as the economy strengthResorts, which last year held the num- ens, but that improvement also is exber-two spot. pected to moderate the following year. Other brands’ fortunes rose and fell According to PricewaterhouseCoopers, incrementally. The decline of Sheraton, occupancy levels for the category in which is part of Starwood Hotels & Re- 2003 increased a slight 0.8 percent over sorts Worldwide, was noteworthy. 2002. In 2004, however, occupancies Number three last year, the brand nose- are projected to rise 2.9 percent year dived to number eight this year. over year, but then slide back down— Of the 13 criteria survey respondents again rising only 0.8 percent in 2005. were asked to measure, Hyatt placed first Revenue per available room in 2003 acin three, including the ease of arranging tually fell 0.4 percent over 2002 but is group travel and the quality of its busi- projected to jump 6.7 percent this year ness centers and in-room business before subsiding to 4.2 percent the folamenities. Renaissance also led the pack lowing year. in four areas: corporate rate programs, “If the industry learned anything from
18 Monday, February 9, 2004
the downturn, it was that you have to stay close to the changing needs of your customer, whether that customer be the travel buyer, meeting planner or actual traveler, and we’re going to keep that focus in mind going forward,” said Edward Rabin, president of Hyatt Hotels Corp. On one level, this will mean introducing a host of service and product enhancements during the year. “These range from a rollout of wireless high-speed Internet that will be consistent across the brand, in addition to whatever wired solutions individual hotels have implemented,” Rabin said. Hyatt also expects to debut a new guest room product that is likely to include an upgraded, signature bed. On the development front, Rabin expects the chain to proceed on two fronts: opening high-profile new properties, while at the same time making major investments in renovating existing assets. Hyatt benefited from the surge of conversions that occurred in 2003 as the faltering economy caused more hotel owners to change management companies. “We reflagged a prop-
erty in the Boston financial district. The owner still felt comfortable with the Hyatt flag, even though it was our third property in the Boston market,” Rabin said. Similarly, Hyatt assumed the management contract last month on a key hotel in downtown Montreal. “We expect there will be more such opportunities for us as the year goes on.” Renaissance is moving forward with a mix of both U.S. and international development. “In the U.S. market, the new Renaissance Grand in St. Louis is representative of what the brand is about,” said Sid Yu, Marriott senior vice president of brand management. “It’s a conversion and expansion of the former historic Statler Hotel, but with the style consciousness and high profile restaurants that have become brand standards. Internationally, the Renaissance Shanghai in the emerging Pudong neighborhood, while a new build, embodies this same approach. Renaissance may be a relatively young brand, but guest satisfaction scores—from business travelers particularly—have been quite positive.”
Business Travel News
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Special Report: Top U.S. Hotel Chain Survey
DELUXE
Rank Chain ARRANGE INDIVIDUAL TRAVEL ARRANGE GROUP TRAVEL FACILITIES RESORT MEETINGS FACILITIES NON-RESORT MEETINGS CORPORATE RATE PROGRAMS COMMISSION PAYMENT SYSTEMS QUALITY OF FOOD HELPFUL COURTEOUS STAFF PHYSICAL APPEARANCE HOTELS QUALITY IN-ROOM AMENITIES QUALITY BUSINESS CENTER QUALITY OVERALL IN-ROOM BUS. PRICE-VALUE AMENITIES RELATIONSHIP OVERALL AVERAGE SCORE
1 2 3 4
RITZ-CARLTON HOTELS FOUR SEASONS HOTELS FAIRMONT HOTELS ST. REGIS/LUXURY COLL.
9.35 9.03 8.86 8.73
9.02 8.42 8.57 8.45
9.05 8.61 8.00 8.10
9.07 8.88 8.72 8.55
7.98 7.32 7.69 7.14
8.00 7.80 7.59 6.78
9.15 8.77 8.42 8.15
9.21 8.74 8.55 8.67
9.42 9.11 8.65 9.21
9.08 8.76 8.43 8.71
8.81 7.91 7.97 8.15
8.77 8.40 8.19 8.07
8.50 8.28 8.35 8.20
8.88 8.46 8.31 8.23
UPPER UPSCALE
Rank Chain ARRANGE INDIVIDUAL TRAVEL ARRANGE GROUP TRAVEL FACILITIES RESORT MEETINGS FACILITIES NON-RESORT MEETINGS CORPORATE RATE PROGRAMS COMMISSION PAYMENT SYSTEMS QUALITY OF FOOD HELPFUL COURTEOUS STAFF PHYSICAL APPEARANCE HOTELS QUALITY IN-ROOM AMENITIES QUALITY BUSINESS CENTER QUALITY OVERALL IN-ROOM BUS. PRICE-VALUE AMENITIES RELATIONSHIP OVERALL AVERAGE SCORE
1 2 3 4 5 6 7 8
JW MARRIOTT HOTELS SOFITEL HOTELS WESTIN HOTELS LOEWS HOTELS OMNI HOTELS INTERCONTINENTAL HOTELS W HOTELS LE MERIDIEN HOTELS
9.08 8.86 8.73 8.56 8.47 8.44 8.61 8.44
8.54 8.72 8.36 8.36 7.89 8.03 7.90 7.82
8.55 8.25 8.35 8.09 8.09 7.76 7.80 7.77
8.62 8.16 8.41 8.00 7.94 8.21 7.85 7.57
8.12 7.84 7.66 7.29 7.37 7.58 7.40 7.56
8.31 6.92 7.65 7.47 7.48 7.00 6.88 7.38
8.26 8.16 8.22 8.00 7.87 7.81 7.93 7.67
8.62 8.25 8.58 8.12 8.31 8.36 8.24 7.72
8.77 8.89 8.63 8.40 8.44 8.36 8.48 8.39
8.47 8.55 8.15 8.16 8.10 8.11 8.00 8.00
8.34 7.94 7.80 8.04 7.63 7.47 7.26 7.36
8.18 8.17 8.05 7.88 7.78 7.35 7.74 7.47
8.38 7.95 7.96 7.68 7.76 7.82 7.72 7.94
8.48 8.21 8.20 8.00 7.93 7.87 7.83 7.78
UPSCALE
Rank Chain ARRANGE INDIVIDUAL TRAVEL ARRANGE GROUP TRAVEL FACILITIES RESORT MEETINGS FACILITIES NON-RESORT MEETINGS CORPORATE RATE PROGRAMS COMMISSION PAYMENT SYSTEMS QUALITY OF FOOD HELPFUL COURTEOUS STAFF PHYSICAL APPEARANCE HOTELS QUALITY IN-ROOM AMENITIES QUALITY BUSINESS CENTER QUALITY OVERALL IN-ROOM BUS. PRICE-VALUE AMENITIES RELATIONSHIP OVERALL AVERAGE SCORE
1 2 3 4 5 6 7 8 9 10 11 12 13
HYATT HOTELS RENAISSANCE HOTELS WALT DISNEY HOTELS MARRIOTT HOTELS HILTON HOTELS HILTON INT'L WYNDHAM HOTELS SHERATON HOTELS RADISSON HOTELS CROWNE PLAZA HOTELS EMBASSY SUITES HOTELS DOUBLETREE HOTELS ADAM’S MARK HOTELS
8.77 8.76 8.03 8.44 8.56 8.79 8.51 8.35 8.50 8.28 8.34 8.35 7.74
8.17 8.16 7.77 7.88 8.04 7.90 7.68 7.76 7.85 7.55 7.57 7.39 6.72
8.55 8.17 8.63 8.13 7.96 7.48 8.05 7.52 7.64 7.02 6.93 6.88 6.70
8.32 8.08 8.46 8.01 8.11 8.05 7.85 7.96 7.94 7.87 7.41 7.49 7.20
7.69 8.15 6.93 7.86 7.72 7.46 7.84 7.72 7.79 7.53 7.45 7.29 6.93
8.08 8.17 8.00 7.91 7.82 7.86 7.52 7.85 7.61 7.44 7.74 7.75 7.33
8.00 8.05 8.00 7.87 7.74 7.79 7.84 7.68 7.66 7.74 6.92 7.14 7.00
8.40 8.38 8.63 8.24 8.26 8.27 8.07 8.03 8.24 8.19 7.90 7.86 7.26
8.50 8.40 8.60 8.23 8.10 8.34 7.93 7.92 7.65 8.09 7.82 7.74 7.35
8.11 7.95 8.25 7.92 7.84 7.58 7.70 7.57 7.50 7.53 7.57 7.13 6.94
7.91 7.87 7.80 7.80 7.86 7.65 7.48 7.51 7.44 7.50 7.25 7.02 6.69
7.93 7.79 7.62 7.79 7.87 7.59 7.73 7.62 7.39 7.38 7.38 7.17 6.45
7.97 8.17 7.81 7.86 7.92 7.63 8.02 7.89 7.66 7.62 7.70 7.42 6.89
8.18 8.16 8.04 8.00 7.98 7.88 7.86 7.80 7.76 7.67 7.54 7.43 7.02
20
Monday, February 9, 2004
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Business Travel News
Special Report: Top U.S. Hotel Chain Survey
Trading Down Helps Courtyard Top Mid W/ F&B Hotels
BY BRUCE SERLEN
W
ith more businesses trading down, midprice with food and beverage veteran Courtyard by Marriott jumped from fourth place in last year’s hotel chain survey to take the number-one spot this year, beating out two relative newcomers in a field of nine. Four Points by Sheraton, which last year tied for first place, placed second, fol- type, so all our new construction conlowed by Hilton Garden Inn, which last forms to the new standards.” year placed third. At year-end, Courtyard had 615 hoCourtyard, which celebrated its 20th tels in its system, approximately 10 peranniversary last year, was the first mid- cent of which are in international marprice brand to promote itself to busi- kets. “The new design lends itself to ness travelers. Survey respondents retrofitting existing properties. We renranked the brand first on seven of the ovated 32 of our oldest hotels in 2003 11 criteria they were asked to measure. and expect to do about 60 more hotels In addition to winning points for the over the next 12 months,” Waetzig said. overall relationship of its price to value, An improvement Courtyard travelrespondents voted the chain number one ers will see sooner rather than later for the physical appearance of its prop- across the entire system is the availerties, its meeting facilities, helpful staff and other criteria. Hilton Garden Inn scored highest for its commission payment systems and quality of its food. Chad Waetzig, Marriott senior vice president for select service brand management, acknowledged that 2003 was a tough year, not just for Courtyard but also for the entire segment. “We did benefit from some trade down in the business travel market and actually saw some trade up from lower price points because rates have come down over the last cou- ability of complimentary high-speed Inple of years,” he said. “It was a positive ternet access. “Unlike at full service hoyear for Courtyard, however, in that we tels, our travelers aren’t always able to increased our trial. It was also a positive expense a charge like this, but at the year from the standpoint of the work same time they tell us they place a high we’re doing to reinvent the brand.” value on high-speed connectivity. What As part of that overhaul, Waetzig and they really have come to expect is, ‘I his team went back to their core busi- want you to have it and then, if you do ness travel audience. “In our market re- have it, I want it for free,’ ” he said. search, we asked these travelers what A second upgrade Waetzig expects they needed for the 21st century,” he to be a brand standard by the end of said. “From what we learned, we’ve pur- 2004 is the Market Pantry, a grab-andsued a two-prong approach. We went go food and beverage concept. “It’s our back to our oldest hotels and started to solution to providing food to our cusincorporate a new lobby and guest tomers 24/7. An advantage at Courtyard room. We also introduced a new proto- in implementing the idea was that the
hotels already are equipped with full kitchens, so the fresh salads and sandwiches we expect to stock can be prepared daily right onsite,” he said. With 144 hotels open at year-end, building distribution is still a high priority at Four Points, relative to such a competitor as Courtyard. The same applies to Hilton Garden Inn, which had 183 properties at year-end. “The 144 include hotels in both downtowns and suburbs, as well as resort destinations. At the same time, we have probably our largest pipeline ever,” said Hoyt Harper, senior vice president of brand management at Four Points. “One of our challenges moving forward is that we need to be flexible enough to adapt to each market at the same time we retain our core standards.” Like the full service Sheraton, whose name it shares, Four Points is part of Starwood Hotels & Resorts Worldwide. Up to now, the brand has been focused predominantly on new construction, but that is changing. “Growth will accelerate faster as we move from being just new builds to include select conversion opportunities,” he said. “As a result, we should be able to develop more properties in downtown locations, where barriers to entry for new construction tend to be higher.” The brand also is expanding offshore. “We have a number of new build properties opening in 2004 in Europe, the Middle East and Latin America. Right now, we have 25 Four Points outside the United States, so we’re already a fairly international brand,” Harper said. Like Four Points, Hilton Garden Inn is primarily a new build concept that has begun doing conversions selectively. “We probably have 125 opportunities a year that come up for conversions, but it’s unlikely we do more than five a year,” said Adrian Kurre, senior vice
president of brand management. Undertaking a conversion is a complicated process. “We do a full product improvement plan on these hotels. They have to install Hilton’s proprietary property management system called OnQ. Plus, complimentary high-speed Internet access is a brand standard at all our hotels, so conversion candidates have to install a hard-wired solution. If it’s a suburban setting, the owner has got to make the property’s entryway look and feel like the pavilion, which is another of our brand standards.” In a number of development deals, Hilton Garden Inn is partnering with a sister Hilton brand, Homewood Suites, which operates in the extended stay category. “There’s a tremendous synergy for a franchisee to have a Homewood Suites and a Hilton Garden Inn in the same market. The two complement each other spectacularly,” Kurre said. “With your Homewood focused on true extended stays, you can draw on overflow from the Hilton Garden Inn, which is focused on the two-night business traveler, to fill the remaining rooms.” In one case, the two brands actually will share the same building. “We’re in discussion with a developer in downtown Baltimore on such a cluster project, but Homewood would have its distinct entrance and we’d have ours.” Like Courtyard and Hilton Garden Inn, Four Points offers complimentary high-speed Internet access. It became a brand standard in its North America hotels last month. “High-speed simply has become a business necessity for people today,” Harper said. “When we first looked at it, we thought it was a feature guests would like to have. Gradually, it went from a ‘nice to have’ to a ‘we think it could be a strategic advantage.’ Then, overnight, it became ‘a must-have.’ ”
Country Inns Ousts Hampton As Leader In Mid W/O F&B
BY BRUCE SERLEN
W
inds of change significantly reshuffled brands this year in the hotel survey’s crowded midprice without food and beverage category. At the top of the ranking, Country Inns & Suites by Carlson swept into the number-one slot and bumped out Hampton, Suites and Comfort Suites. which fell to third place in a Country Inns received the field of 10. Country Inns last highest ratings from survey reyear did not receive sufficient spondents on five of the 10 criusage by survey respondents teria against which they were to merit inclusion in the final asked to measure brands. In adlisting. Occupying the runner- dition to the overall relationship up position this year was Fair- of price to value at its properfield Inn by Marriott, up from ties, Country Inns won for ease the number-five slot last year. in arranging individual and AmeriSuites, last year’s run- group travel, meeting facilities ner-up, slipped to number and hotel physical appearance. four. Other brands not on Fairfield received top ratings for 2002’s list making an ap- its commission payment sysp e a r a n c e t h i s y e a r a r e tems and its helpful, courteous SpringHill Suites by Mar- staff, while AmeriSuites was riott, Wingate Inns Interna- singled out for the quality of t i o n a l , L a Q u i n t a I n n & both its business centers and
Monday, February 9, 2004
its in-room business amenities. Holiday Inn Express placed highest for its corporate rate programs. According to industry data, the midprice without food and beverage segment in 2003 outperformed most price points, in part, because of the type traveler these brands attract. “On the whole, our business customer is the mid-level, professional, managerial, technical traveler who continues to travel no matter what happens with the economy,” said Phil Cordell, senior vice president of brand management for Hampton, which is part of Hilton Hotels Corp. “In many cases, these customers are driving and travel frequently, which is also why their business is so imwww.btnonline.com
portant to the segment.” While the supply pipeline for new development shrunk across all price points during the recession, midprice brands in particular have continued actively to pursue expansion, in part because they mostly work on a franchise model where developers assume most of the risk and franchise fees can be highly lucrative. During the year, Country Inns stressed development of hotels larger than its usual prototype in or near downtown locations. One opened at Newark Airport and others are in various stages of development in New Orleans, Washington, D.C., and San Diego. Unlike most of the brand’s 337 properties, which are franchises, a number
of these are Carlson-owned. “We need projects that give us good brand exposure,” said Nancy Johnson, Country Inns executive vice president and brand leader. “Doing corporate development ensures the brand gets this kind of recognition. It’s what we call the billboard effect. In terms of long-term growth, entering a market with a big banner hotel generates interest from franchisees for hotels in the surrounding area.” As for distribution, Fairfield is at another level, having opened its 500th hotel in 2003. The year ended with 521. Approximately 20 to 30 hotels are expected to join the brand each year. The 500th was in Bentonville/Rogers, Ark., near the
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Business Travel News
Special Report: Top U.S. Hotel Chain Survey
MIDPRICE WITH FOOD AND BEVERAGE
Rank Chain ARRANGE INDIVIDUAL TRAVEL ARRANGE GROUP TRAVEL FACILITIES NON-RESORT MEETINGS CORPORATE RATE PROGRAMS COMMISSION PAYMENT SYSTEMS QUALITY OF FOOD HELPFUL COURTEOUS STAFF PHYSICAL APPEARANCE HOTELS QUALITY BUSINESS CENTER QUALITY IN-ROOM BUS. AMENITIES OVERALL PRICE-VALUE RELATIONSHIP OVERALL AVERAGE SCORE
1 2 3 4 5 6 6 8 9
COURTYARD BY MARRIOTT FOUR POINTS BY SHERATON HILTON GARDEN INN CLUB HOTELS BY DOUBLETREE HOLIDAY INN BEST WESTERN INT’L CLARION QUALITY INNS RAMADA INNS
8.63 8.56 8.62 8.75 8.46 8.13 7.58 7.09 7.48
7.93 7.89 7.69 7.65 7.56 7.27 6.71 6.82 6.25
7.61 7.51 7.33 7.29 7.38 6.58 6.78 6.56 6.05
7.74 7.95 7.67 7.96 7.96 7.17 7.45 6.90 6.89
7.98 7.98 8.04 7.64 7.71 6.91 7.31 7.25 6.71
7.31 7.40 7.43 6.96 6.92 6.18 6.70 6.53 6.15
8.43 8.23 8.37 7.93 7.87 7.72 7.36 7.04 6.66
8.30 8.02 8.20 8.04 7.32 7.13 7.09 6.73 6.48
7.75 7.36 7.36 7.22 6.89 6.32 6.67 6.37 6.13
7.77 7.55 7.36 7.50 7.03 6.42 6.41 6.24 6.30
8.03 7.75 7.82 7.78 7.61 7.44 7.13 6.70 6.62
7.95 7.84 7.81 7.70 7.52 7.02 7.02 6.75 6.52
MIDPRICE WITHOUT FOOD AND BEVERAGE
Rank Chain ARRANGE INDIVIDUAL TRAVEL ARRANGE GROUP TRAVEL FACILITIES NON-RESORT MEETINGS CORPORATE RATE PROGRAMS COMMISSION PAYMENT SYSTEMS HELPFUL COURTEOUS STAFF PHYSICAL APPEARANCE HOTELS QUALITY BUSINESS CENTER QUALITY IN-ROOM BUS. AMENITIES OVERALL PRICE-VALUE RELATIONSHIP OVERALL AVERAGE SCORE
1 2 3 4 5 6 7 7 9 10
COUNTRY INNS & SUITES FAIRFIELD INN BY MARRIOTT HAMPTON AMERISUITES SPRINGHILL BY MARRIOTT HOLIDAY INN EXPRESS LA QUINTA INN & SUITES WINGATE INNS INT’L COMFORT SUITES COMFORT INNS
8.87 8.45 8.61 8.42 8.38 8.20 8.00 8.19 7.92 7.66
8.75 7.28 7.54 7.14 7.38 6.97 6.46 6.75 6.88 6.58
7.86 6.23 6.54 6.41 6.72 6.31 6.00 6.36 6.12 5.63
7.23 7.58 7.57 7.37 7.30 7.69 7.15 6.36 7.14 7.35
7.25 7.97 7.68 6.75 7.79 7.58 7.13 7.43 7.07 6.40
8.29 8.32 7.96 7.86 7.75 7.68 7.83 7.69 7.60 7.41
8.25 8.06 7.83 8.19 8.00 7.29 7.43 7.94 7.17 6.48
7.08 6.94 6.89 7.12 7.11 6.35 6.95 6.67 6.25 5.96
7.31 7.17 7.02 7.63 6.95 6.49 6.86 6.50 6.83 6.08
8.36 7.95 7.91 7.91 7.35 7.72 7.83 7.75 7.48 7.10
7.92 7.59 7.55 7.48 7.47 7.23 7.16 7.16 7.04 6.66
UPPER UPSCALE EXTENDED STAY
Rank Chain ARRANGE INDIVIDUAL TRAVEL CORPORATE RATE PROGRAMS COMMISSION PAYMENT SYSTEMS HELPFUL COURTEOUS STAFF PHYSICAL APPEARANCE HOTELS QUALITY IN-ROOM AMENITIES QUALITY BUSINESS CENTER QUALITY IN-ROOM BUS. AMENITIES OVERALL PRICE-VALUE RELATIONSHIP OVERALL AVERAGE SCORE
1 2 3 4 5 6
HOMEWOOD SUITES BY HILTON RESIDENCE INN BY MARRIOTT STAYBRIDGE SUITES SUMMERFIELD SUITES HAWTHORN SUITES WOODFIN SUITES
8.82 8.91 8.34 8.63 8.21 8.09
7.74 7.69 7.53 7.62 7.13 7.50
7.51 7.59 7.59 7.78 7.39 7.07
8.54 8.61 8.06 8.22 7.98 7.87
8.61 8.34 8.14 8.00 7.92 7.73
7.99 7.93 7.94 7.81 7.43 7.59
7.44 7.59 7.52 7.04 6.98 6.90
7.36 7.50 7.65 7.31 7.10 7.05
8.24 7.97 7.97 7.67 7.65 7.50
8.03 8.01 7.86 7.79 7.53 7.48
NEW PROTOTYPES AID MID W/O F&B EXPANSION
Continued from page 22
corporate headquarters of Wal-Mart. According to Liam Brown, senior vice president for brand management, the Arkansas property embodies what is still the dominant Fairfield prototype—a solidly suburban or highway location. “We think it’s a competitive product for
Business Travel News
the travel buyer, looks good to the traveler and, from a cost perspective for new franchisees, is competitive too,” he said. As with Country Inns & Suites, downtown locations are attractive to Fairfield, but so are cluster projects that include multiple midprice Marriott brands. “Such a project opened in December in
Las Vegas that includes a Residence Inn, Courtyard and a Fairfield Inn,” Brown said. “There are just certain synergies with these projects, if only from a segment perspective, that is, being able to offer buyers and travelers product offerings that address their needs, whatever they may be.” At Hampton, a smaller prototype designed for tertiary markets was an-
nounced in 2002. Examples of the new “small-town Hampton” started to come online in 2003. Four are open presently and an additional 12 are in development. “The prototype is working out for us. As with the launch of any new design, there’s caution initially as people wait to see what guest acceptance is like and how the prototype works financially
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Monday, February 9, 2004
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Special Report: Top U.S. Hotel Chain Survey
UPSCALE EXTENDED STAY
Rank Chain ARRANGE INDIVIDUAL TRAVEL CORPORATE RATE PROGRAMS COMMISSION PAYMENT SYSTEMS HELPFUL COURTEOUS STAFF PHYSICAL APPEARANCE HOTELS QUALITY IN-ROOM AMENITIES QUALITY BUSINESS CENTER QUALITY IN-ROOM BUS. AMENITIES OVERALL PRICE-VALUE RELATIONSHIP OVERALL AVERAGE SCORE
1 2
TOWNEPLACE SUITES BY MARRIOTT CANDLEWOOD SUITES
8.81 8.42
7.76 7.66
7.55 7.07
8.44 8.15
8.24 7.76
7.82 7.39
7.10 6.74
7.39 6.91
8.13 7.91
7.91 7.56
MIDPRICE EXTENDED STAY
Rank Chain ARRANGE INDIVIDUAL TRAVEL CORPORATE RATE PROGRAMS COMMISSION PAYMENT SYSTEMS HELPFUL COURTEOUS STAFF PHYSICAL APPEARANCE HOTELS QUALITY IN-ROOM AMENITIES QUALITY IN-ROOM BUS. AMENITIES OVERALL PRICE-VALUE RELATIONSHIP OVERALL AVERAGE SCORE
1 2 3
WELLESLEY INNS & SUITES EXTENDED STAY AMERICA HOMESTEAD STUDIO SUITES
8.44 7.84 7.84
N/A N/A N/A
6.95 7.07 6.60
7.89 7.31 7.50
7.00 6.85 7.15
6.71 6.43 6.17
6.44 6.09 5.81
7.37 7.14 7.00
7.26 6.96 6.87
ECONOMY
Rank Chain ARRANGE INDIVIDUAL TRAVEL CORPORATE RATE PROGRAMS COMMISSION PAYMENT SYSTEMS HELPFUL COURTEOUS STAFF PHYSICAL APPEARANCE HOTELS OVERALL PRICE-VALUE RELATIONSHIP OVERALL AVERAGE SCORE
1 2 3 4 5 6
BEST INNS RED ROOF INNS RAMADA LIMITED DAYS INN TRAVELODGE SUPER 8
8.20 8.15 7.95 8.04 7.38 7.65
6.31 6.72 6.43 6.37 5.89 5.06
7.88 6.91 7.02 6.97 7.00 6.60
7.56 7.46 7.48 7.33 7.29 7.32
6.86 7.28 6.85 6.65 6.45 6.29
7.53 7.38 7.43 7.28 6.84 6.59
7.39 7.32 7.19 7.11 6.81 6.58
BUDGET
Rank Chain ARRANGE INDIVIDUAL TRAVEL CORPORATE RATE PROGRAMS COMMISSION PAYMENT SYSTEMS HELPFUL COURTEOUS STAFF PHYSICAL APPEARANCE HOTELS OVERALL PRICE-VALUE RELATIONSHIP OVERALL AVERAGE SCORE
1 2 3
MICROTEL INNS MOTEL 6 ECONO LODGE
8.00 8.06 8.09
6.64 6.53 6.24
6.29 6.69 6.50
8.08 7.40 7.24
7.42 6.63 6.60
8.00 7.12 7.32
7.40 7.07 7.00
Methodology For BTN Top U.S. Hotel Chain Survey
B
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usiness Travel News’ Top U.S. Hotel Chain Survey is an annual measure of corporate travel buyers’ opinions of the properties their companies and clients use. BTN sent out five different questionnaires to a random sample of 6,000 corporate travel managers and business travel agents in its subscriber base, asking them to rank hotels in various segments and categories. BTN tabulated 605 usable responses. To qualify to rate a particular hotel company, respondents were required to have done business with that chain within the past 12 months.
Monday, February 9, 2004
There are 10 hotel segments in this year’s survey: deluxe, upper upscale, upscale, midprice with food and beverage, midprice without F&B, economy, budget and extended stay, which is broken into three segments, upper upscale, upscale and midprice. Depending on the segment, the hotels were rated on anywhere from six to 13 attributes, including quality of food, physical appearance, corporate rate programs and quality of the business center and meeting facilities. Ratings are on a numerical scale from one to 10, with the number highlighted indicating the high scorer for that category.
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This survey only presents data about those hotel chains for which respondents reported statistically significant usage. Not every respondent rated every hotel company in every category, and those who left out a category in their ratings were not included in the average rating for that category or company. The overall average weighted score indicates that the score was affected by the fact that some categories drew more responses than others. The weighted score assigns more weight to the categories rated more frequently.
Business Travel News
Special Report: Top U.S. Hotel Chain Survey
Homewood, TownePlace, Wellesley Inns Top Ext. Stay
BY BRUCE SERLEN
I
n a neck-and-neck finish, Homewood Suites by Hilton edged out Residence Inn by Marriott to lock in the number-one position in the upper upscale extended stay category in this year’s hotel chain survey. Staybridge Suites, which is part of InterContinental Hotels Group, ended a more distant third, while Summerfield Suites by Wynd- is a Residence Inn that’s doing well. ham, last year’s top vote getter, plum- Market analysis can indicate there’s a meted to fourth place. Reversals this year also occurred in the survey’s upscale and midprice extended 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 prevail in the midprice tier. Both Candlewood Suites and Extended Stay America 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 upscale match-up, respondents gave TownePlace Suites the highest scores across the board. Voting on seven criteria in the midprice race, respondents named Wellesley the best in five of the seven, including the chain’s overall pricevalue relationship. “From a profitability standpoint, 2003 was a tough year across the entire industry, yet from the development perspective, we did more deals last year than ever before,” said Jim Holthouser, Homewood senior vice president for brand management. “Granted, the number of openings slowed down in 2003 to 12, but the number of approvals increased, 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, Residence Inn, Homewood’s competitor in the upper upscale tier, had 445 properties 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 urban development and conversions on a selective basis. Our first property in the metropolitan New York area, for example, will be in Edgewater, N.J., opening 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 areas where there is a high degree of government 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
lot of unmet need for a moderately priced product there,” Bates said. Markets that have both a Residence Inn and a TownePlace Suites see operational synergies, particularly with the sales effort. “The properties will leverage a director of sales and a sales team. It’s proven
very effective,” Bates said. She noted that the mix of business at both brands in 2003 shifted a bit toward transient stays. “In the weak economy we’ve just come through, the hotels have tried to get the customers they can. Yet, we try to hold
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Monday, February 9, 2004
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Special Report: Top U.S. Hotel Chain Survey
Best Inns, Microtel Repeat As Economy, Budget Winners
BY BRUCE SERLEN
U
S Franchise Systems this year achieved success in its second consecutive double-header in the BTN hotel chain survey, with its Best Inns & Suites and Microtel Inns & Suites brands capturing the number-one spots in the economy and budget categories, respectively. Red Roof Inns, which is part of Accor In fact, we had three groundbreakings Hotels, finished in second place this year this January that we hadn’t expected bein the economy category out of a field of cause the economy has been going in the six. Red Roof moved up a notch from right direction and developers are start2002, bumping Days Inn from the num- ing to feel more confident about moving ber-two berth. Days Inn, which is part of forward with new projects.” the Cendant Hotel Group, fell to fourth Best Inns had a more difficult year, place. Best Inns was rated highest in four which is why Leven said the first-place of the six criteria that survey respondents finish especially was meaningful. “The were asked to measure, including the number of brands out there like Best brand’s overall price-value relationship. Inns is just enormous, so it’s difficult Motel 6, which also is part of Accor, for the brand to compete.” finished second in the budget segment While hotels at these price points out of a field of three. It occupied the num- welcome business travelers, the corpober-three spot last year. Microtel earned rate market is not as crucial to them as highest scores in four of the six criteria, it is to brands at the upscale, upper upincluding price-value relationship. scale and deluxe levels. “The higher the According to Mike Leven, chairman level of hotel, the more dependent you and CEO of USFS, Microtel, in particu- are on major corporate business,” Levlar, had a strong year in 2003. “The brand en said. “Consequently, you’re not dehas been moving in a positive direction. pending on the Fortune 500 companies It’s got great satisfaction scores,” he said. or even the Fortune 1000. You’re de“In terms of new projects, we saw a real pending on local little companies and increase in the pace of development in individual entrepreneurs to fill your hothe last three or four months of the year. tel. It’s the drive business. Leisure trav-
el accounts for the remainder.” The typical business traveler using these brands is the road warrior on a tight expense account. “It’s manufacturers’ reps and even construction workers and truckers,” he said. “They’ve continued to travel through the downturn, which accounts for the fact that, generally, our occupancies last year were up considerably.” This traveler profile affects new property development. “As a result of who our target guest is, having a presence in the major markets is not as important as it is for full-service hotels. The more hotels these brands have in major markets, the more responsive they can be. In our case, proliferation of product is more of a priority. In the same way, you need more of this kind of product to be considered a nationally known brand than you do at the full-service categories.” At year-end 2003, Microtel had more than 250 properties; Best Inns had more than 100. “What Microtel needs is another 50 to 100 hotels from Texas east,” Leven said. Given their price points, concerns about quality and consistency of service
at economy and budget brands have been chronic. Such chains as Days Inn began approaching the problem in 2003. “We took our worst performing properties and told them either to clean up or get out,” said Steven Rudnitsky, Cendant Hotel Group chairman and CEO, told BTN last fall (BTN, Oct. 20, 2003). Consequently, Cendant put about 600 properties on notice within the Days Inn brand, as well as Ramada Limited, Super 8 and other of its economy and budget brands. “Workout plans were put in place and many corrected their problems,” Rudnitsky said. Roughly half, however, ended up leaving the system by the end of 2003. At USFS, a major goal for 2004 is the rollout of a common property management system. “With it, each brand will have its own unified platform, and the hotels will be able to talk to each other,” Leven said. Implementing similar systems also has been a priority at the major multi-brand companies. Hilton Hotels Corp., in fact, launched its version in 2003. “We can’t develop the kind of systems we need for revenue management, customer relationship marketing and data transmission without it.”
EXT. STAY GROWTH PERSISTS
Continued from page 25
tight on extended stay occupancy, meaning five nights or more, because that’s the core of our model.” Holthouser and Bates both said they still encounter confusion about extended stay on the part of travel buyers, but that the situation is improving. Bates also has found growing understanding of the respective extended stay tiers. “Buyers increasingly are aware of the points of distinction, both in terms of the space and amenities,” she said. “As a result, you’ll see a more junior person stay at a TownePlace, while a senior person is booked at a Residence Inn. Both brands may be in the buyer’s preferred program, but the different bookings will reflect the travelers’ travel budgets.” Inadvertently confusing the matter, Wellesley Inns & Suites straddles two bases. According to Maureen O’Hanlon, senior vice president of sales and market-
ing at Prime Hospitality, Wellesley’s parent, some properties seek extended stay bookings, while others focus on the midprice without food and beverage market. “It’s almost like two different brands within the brand, but we certainly have a number of dedicated extended stay properties,” she said. Within the industry, extended stay still is expanding. “It’s a unique offering. The full kitchen comes in handy, for example, when you don’t want to go out to eat every night. When travelers are going to be in a location for a particular amount of time or relocating, they’re looking for things like this. At the same time, they’re not necessarily looking for the more luxurious amenities found at full service hotels.” Transient business hotels inevitably are at a disadvantage when they accept extended stay bookings. “It’s ings as a market segment. “Given our level of service, we’re attracting mostly small to midsize, senior-level meetings, including board of director meetings. Considering all the global security concerns planners faced in 2003, they seemed to like the relative seclusion of
just hard for a regular hotel room to compete in that market because they’re not geared to provide the service that extended stay travelers need and want,” O’Hanlon said. As 2003 ended, the competitive landscape for extended stay changed when InterContinental Hotels Group acquired the Candlewood Suites brand. IHG now joins Marriott in operating within two extended stay tiers. IHG had the option of merging Candlewood into its existing Staybridge Suites, but chose to manage each brand separately. “Now, with Candlewood, we’ve got a very clear distinction between the two offerings,” IHG president of the Americas Stevan Porter told Business Travel News (BTN, Jan. 19). “Our intention going forward is to build both brands.” group facilities available in that destination’s mega-hotels. “We’re housed at the top of the Mandalay Bay tower with our own discreet entrance,” said Kathy Van Vechten, director of marketing, “so even our location is a contrast to the typical hotel on the Strip.”
DELUXE HOTELIERS UPHOLD SERVICE
Continued from page 16
ducting transitions,” said general manager of the Fairmont Washington George Terpilowski, who had been in that role when Fairmont acquired the hotel in late-2002. “Buyers and meeting planners are happy when improvements are made, but, at the deluxe level in particular, renovations have to be done in a way that’s not disruptive while they’re with you.” Meanwhile, individual properties have to be ready to adapt brand standards to suit their destinations. “We found that guests didn’t necessarily want the traditional St. Regis butler service,” said Bruno Brunner, vice president and managing
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director of the St. Regis Los Angeles. “The concept might work at the St. Regises in New York and London, but not here, so we replaced it with an upgraded guest relations department. The attention is still hands-on, but not quite so formal.” Like Fairmont, both RitzCarlton and Four Seasons continued their aggressive expansions in 2003. Ritz-Carlton opened properties in Berlin, Estoril, Portugal, Orlando and Miami, while Four Seasons debuted in the Bahamas, Costa Rica, Jackson Hole, Wyo., and Miami. As the brands have expanded, the percentage of resort development has increased, with a greater focus on group meet-
a resort in a known destination where attendees can meet free of distractions,” said Martin Nicholson, general manager of the Ritz-Carlton Rose Hall, located in Jamaica. Likewise, meetings at the Four Seasons Las Vegas tend to supplement the large-scale
HAMPTON BROADENS APPEAL
Continued from page 23
from the franchisee’s perspective,” Hampton’s Cordell said. “They’re basically creating demand for a branded hotel in markets where there was no demand before or where demand existed, but there was no supply.” According to Cordell, travelers don’t make a distinction between the small-town and regular size Hamptons. “We’ve done extensive satisfaction surveys to see if guests perceive a difference. They don’t. In terms of amenities and service
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levels, including breakfast, high-speed Internet access, etc., the experience is basically the same,” he said. “The only difference is that guests who are brand loyal now have a place to stay in destinations where they couldn’t stay previously. Plus, they can earn their frequency points.” Despite the number of new hotels being built at these brands, the brand managers still express a concern that development not become pro-forma. “As we go forward, you want to be sure that each hotel in each location is set up for success,” Fairfield’s Brown said, “that it is the appropriate build for the appropriate area.”
Business Travel News
Monday, February 9, 2004