Archive for February, 2006

Iowa Marriott does ecology proud

It’s too early to call it a movement, but smoke-free hotels are gaining ground. First, Westin announced it would ban smoking indoors at all of its North American and Caribbean properties (see the Front Desk for Dec. 6th, 2005). Now, Marriott has stuck its toe into the smoke-free waters.

In August, the state of Iowa will debut its first smoke-free, full-service hotel. The 286-room Coralville Marriott Hotel & Conference Center, owned by the city of Coralville and operated by Marriott International, will have clean air.

But that’s not all. To demonstrate its commitment to a smoke-free environment, the hotel, which will offer 60,000 square feet of meeting space, will donate a percentage of its 2006 guestroom receipts to the University of Iowa Holden Comprehensive Cancer Center for tobacco-related research.

Talk about putting your money where your mouth is. Or is it lungs? It’s all our lungs.

Steal the business

It’s the oldest marketing trick in the book: steal business. The Jumeirah Essex House in New York City is doing just that with a unique new promotion. The deal, which runs through March, offers guests a $100 American Express Gift Cheque if they stay two nights at the Central Park South hotel. The catch: guests must prove they belong to another hotel company’s frequent traveler program and fill out an application for Jumeirah’s own club. It’s simple, elegant and very cunning.

Of course, the deal isn’t quite as good as it sounds. According to the hotel’s website, rack rate for standard king rooms are $529 for a weeknight stay next week.

Las Vegas: a dry well?

New hotel development in Las Vegas follows a familiar cycle. A raft of new casino-hotel projects are announced, followed by civic euphoria, followed then by a trickle of skeptics who believe the city won’t be able to absorb the new supply. So far, history has proven the naysayers to be wrong. Every new wave of hotel development has brought even more visitors and more profits to the city’s vital economic engine. It’s the only pure example of supply-side economics that works reliably.

And so as the city faces a possible 25-percent increase in room inventory in the next five years, some pessimists are hard at work proclaiming that doomsday is near. The 40,000 new rooms in the Vegas pipeline will depress average rates and revenues for existing Strip properties, says a new report from investment banker Goldman Sachs.

I, too, think Las Vegas may be heading for difficulties in the next decade or so but for different reasons. I agree with local boosters who believe additional hotel rooms—as well as the casinos, dining, retail and other attractions that follow—increase the size of the pie and eventually draw even more tourists to Sin City. The problem I foresee is in the infrastructure. Water, for one, is a very limited resource in the Southwest, and I’m not sure Las Vegas will get the added quantities it needs for prolonged growth. There are other concerns—power, housing, traffic, workers—that may be part of the process that finally puts a halt to the long, glorious growth run for America’s most unique and vibrant resort city. Then again, I could be wrong.

Spending spree

The latest forecast from PricewaterhouseCoopers confirms what you might have already observed from your own operations: another record year for capital spending in the U.S. lodging industry. According to the financial services and advisory firm, the hotel industry is expected to invest $5.0 billion in ’06. This follows last year’s record $4.8 billion investment, which was a staggering 50 percent higher than ’04 levels.

PwC suggests the increase reflects continued spending on such items as branded furniture, including improved beds and bedding; technology of all types (in-room entertainment such as flat screen TVs account for a large chunk of change); and design enhancements meant to appeal to Gen X-ers and Millenials. This includes gathering settings and places; branded equipment and amenities; and informal, branded, multicultural comfort food, grazing meal options and extended hours for food and beverage operations.

The upshot is American travelers are becoming very much accustomed to fresh, updated accommodations and amenities at all levels of lodging. How does your property rate? Everyone complains about amenity creep (gallop is more like it), but the alternative to keeping up with the Joneses (or Sternlichts ) is becoming dated and stagnant. That’s simply not an option for today’s young design-conscious and lifestyle-driven consumers. They’ll take their business elsewhere. And there are plenty of savvy operators who’ll cater to their every whim.

The new Marriott: consistent, not uniform

Somewhere in the past year of two, or perhaps even longer, Marriott International passed a key threshold that should serve as an apt lesson for other hotel companies and even individual properties.

At a press event in New York recently, Mike Jannini, Marriott’s suave and well-spoken senior vice president of brand management, articulated a new corporate philosophy—at least it was new to me—that shows how the company has radically shifted its outlook on what’s important in the properties it operates or franchises. In response to a reporter’s question, and in an off-hand way, Jannini explained that the company’s standards have morphed from uniformity to consistency.

That’s big news. Fairly or not, the perception of Marriott to travelers, owners and operators has long been that it would tolerate nothing less than what is written in an operating manual, design specification or franchise agreement. Again, the perception was “my way or the highway.” One can’t argue with the results, however, as Marriott is consistently viewed as the most successful company in the business, with the brands most coveted by owners, developers, franchisees and most importantly, travelers.

What Jannini was saying is that in a marketplace that has shifted in terms of traveler demographics (they’re getting younger, more diverse and increasing female), the emphasis must be on serving customer needs in the way customers define them, not how the corporation defines them. What’s important, for example, is that the guest feels he or she had an overall great sleep experience, not that the sheet thread count is 300, or 400 or whatever.

While this is the kind of philosophy that all hoteliers must adopt if they hope to keep abreast of the market, it’s also a lot harder for a behemoth like Marriott to monitor, control and adjust as needed. But, failure to do so—especially at the property level—means the race will pass you by.

The fun side of Barry Sternlicht

An upbeat, puckish Barry Sternlicht accepted a prestigious award from HSMAI earlier this week in New York. In doing so, an uncharacteristically forthcoming Sternlicht revealed a few more details about the luxury Crillon brand his company, Starwood Capital Group, is launching.

It must be the liberation of heading a private company versus a public entity like Starwood Hotels, but Sternlicht didn’t display the usual guarded, sometimes-snotty demeanor he displayed as chairman of the hotel company. Still, Barry’s off-the-cuff remarks in accepting the Alfred E. Koehl Award for lifetime achievement in travel advertising showed his continuing love for hotels and for those in the design and creative sides of the business.

“It will be a five-star brand with a distinctive European style,” Sternlicht said of Crillon. Flagship and namesake of the brand is Starwood Capital’s Hotel de Crillon in Paris. “The French have a lot of style and passion. We’ll build on that but also add our own innovations.”

He said to expect future Crillon properties to have Baccarat suites and Taittinger champagne lounges, reflecting two other brands Starwood Capital owns as part of the its Societe du Louvre luxury goods division.

Sternlicht also revealed that Starwood Capital will soon announce a new luxury resort brand to complement the Crillon flag.

In accepting the award, Sternlicht reflected on the launch of the groundbreaking W Hotels brand while he was at Starwood Hotels.

“People always compliment me on our launch of that brand, but in reality we initially only had $1 million to spend on advertising,” he said. “We did it all with public relations. We made a lot of noise about the brand.”