Archive for October, 2006

The name game

You may be the GM of the Royal Inn in South Dubuque, but we both know you’re a helluva lot smarter and creative than those empty suits at corporate HQ. Well, here’s your chance to strut your stuff and maybe land that promotion to regional director of ops for southwestern Iowa.

Quirky hotel chain Joie de Vivre Hospitality is holding a contest to help it name a hotel it now operates in San Francisco’s Japantown neighborhood. The property, now known at the Miyako Inn Best Western, will undergo an extensive renovation and reopen in 2007 with the new name you may come up with.

To check out the hotel, visit its website at http://jdvhospitality.com/miyakoinn. Or if you’ve already got an idea for the name, send a message to nametheinn@jdvhospitality.com. And to make sure you don’t get cheated, also post your suggestion as a response to this blog entry. This will give you a date and time record of when you came up with your brilliant idea.

Loss of a young leader

They say the apple doesn’t usually fall far from the tree. That was certainly the case with Sol Kerzner, the rough-and-tumble South African entrepreneur who built a hospitality empire topped by its Atlantis mega-resort in the Bahamas. His son, Butch, was cut from the same cloth as Sol, although with the sheen a Stanford MBA brings. Sadly, 42-year-old Butch died yesterday in a helicopter crash on the north coast of the Dominican Republic while he was scouting locations for new resorts.

While Sol is gruff and old school, Butch was polished and modern. But make no mistake: Butch was as much a hard-nosed negotiator and dealmaker as his father. Much of the company’s success, including its recent move to take the firm private, is due to Butch’s strong leadership.

His kind of creative and daring leadership will be missed in the hospitality industry. Our condolences go to Sol and to Butch’s wife and two children.

Maintaining global harmony

Stevan Porter, the smooth, gregarious president of the Americas region of InterContinental Hotels Group, certainly has nothing against border security. But he also doesn’t want security concerns to trump international relations, a risk he and others suggest that the Bush administration is taking with the Western Hemisphere Travel Initiative (WHTI).

Porter, who made a point of praising Canadian hospitality during the recent InterContinental Americas Investors & Leadership Conference in cosmopolitan Toronto, endorses “the notion of border security,” he says. But he wants “to slow the train a little bit” so as to develop “globally agreed-upon documentation that solves the citizenship question.”

Good move, and good that Democratic Senator Patrick Leahy of Vermont and Republican Senator Ted Stevens of Alaska have slowed the train a bit. In July, the Senate approved a Stevens-Leahy amendment that postpones until June 2009 stiff new border-crossing requirements. Leahy—and various Canadian officials—say the PASS Card system would lead to major disruptions in commerce, tourism and travel.

The PASS Card is part of the Western Hemisphere Travel Initiative, a push from the Departments of Homeland Security and State. Among WHTI requirements are a demand that individuals from the Americas, the Caribbean, Bermuda, Canada and Mexico present a passport or other documents proving citizenship before entering the U.S. As proposed by Homeland Security and State, a PASS Card about the size of a driver’s license would be developed to provide an alternative to a passport. But the two agencies haven’t agreed on the card’s technical requirements and, Leahy claims, haven’t coordinated with their counterparts in Canada and Mexico.

According to the Homeland Security website, the WHTI will by Dec. 31, 2007 require all travelers to and from the Americas, the Caribbean, Bermuda, Canada and Mexico to show a passport or other proof of citizenship (like an original copy of a birth certificate) at the U.S. border.

IHG’s Porter says he doesn’t know what kind of technology could provide a universally recognized and accepted proof citizenship that is easily processed. But he’ll continue to raise the issue, befitting the head of a giant hotel brand that’s ever more globally oriented.

The $1 million guestroom

To show you how long I’ve been in this business, I distinctly remember back in the 1970s (or maybe it was the ’80s; I told you I’m old) when our then Finance Editor, the late Steve Brener, wrote a controversial column in which he forecast the imminent arrival of the $100-a-night hotel room. At that time, even rooms in New York City were renting for only $70 or $75 a night, but Brener correctly forecast a day when top-tier properties in Manhattan and elsewhere would crack the $100 barrier. Obviously, he was correct and today it’s nearly impossible to get a room in New York for even $300 a night.

The industry cracked another barrier recently that many thought would never be broken: the $1 million guestroom. Related Cos. recently sold its W Union Square property in New York for more than $1 million per key to Dubai-based Istithmar. (More precisely, the 270-unit hotel sold for $285 million, or $1,055,555 per room.) And while the property has been wildly successful since it opened in 2000, it’s hard to imagine the economics of any hotel to justify that kind of price tag. After all, using an old hotel business rule of thumb, that W should command an ADR of $1,055 to match its selling price. Even in Manhattan, that won’t happen for awhile, but this example highlights the new economics of the hotel business.

In fact, the W Union Square, like many hotels in NYC and elsewhere, is much more than a hotel; one could say it’s really a bar, restaurant and hip gathering place that also happens to rent 270 rooms on the side. Simply put, f&b, catering and other revenues are so important for a property such as this that its million-dollar guestroom status is probably justified. Even my old friend Steve Brener would have a hard time visualizing this scenario.