Archive for March, 2007

Give smokers a break

I just finished reporting on a couple of hotel chains that are bucking the non-smoking bans some of the larger hotel companies are implementing at their properties. While Westin was the first to ban smoking chain-wide in its hotels, followed by Marriott and others, some are choosing, well, choice, for their guests and franchisees. For Extended Stay Hotels, it makes sense, since its guests typically stay 20 days or more. Also, a fair number of its customers comprise international guests, who typically smoke more than U.S. guests.

Hilton Garden Inns has also recently “come out” and mandated that its hotels will be given a choice as to whether they allow smoking or not. The issue was kicked around for a while, and ultimately it was decided that “as a brand, it needs to be market driven as opposed to us mandating it,” says Adrian Kurre, senior VP  at HGI. So in North Carolina, where tobacco is king, a minimal amount of inventory may be held for smoking guests. In the more smoke-adverse California, hotels like the the HGI at LAX choose to be smoke-free.

I was surprised when Kurre told me that statistics show 23 percent of the U.S. population “admits” to smoking.  That’s a lot of guests to relegate to huddling outside in bad weather or expecting to go hours without a fix. Like alcohol, smoking is still legal after all.

I like Kurre. He is a voice of reason in the whole smoking/non-smoking debate. He sympathizes with those huddled masses furtively puffing under the porte-cochere, or worse, in dimly lit parking lots or other outside locales. “Smokers get a bad rap,” says Kurre, “and being a former smoker, I know that most are extremely polite and only smoke in designated areas and don’t disperse their second hand smoke around non-smokers.

“We’ve had guests check out of our competitor’s properties and check in with us and they’re not even smokers,” says Kurre. “But they dislike corporations making the decision for them as to whether they can smoke in their hotels or not. And even in those hotels that are completely non smoking, we’re saying that you can do that but you still need to treat smokers like first class citizens—so we’ll have a nice area to go to outside and smoke—covered areas if you’re in a cold climate, plus heaters. They’re still our guests and deserve good treatment.

“Obviously, we’d like to see nobody smoke,” says Kurre. “And I’d be surprised if the usage numbers don’t continue to fall as the younger generation is much more aware of the dangers of smoking. Eventually it will be a non-issue.”

Until then, let’s give smokers a break.

Brand inflation continues

There’s been a lot of hullabaloo in the past two years about the rise of the new lifestyle hotel brands, e.g., aloft, Cambria Suites, Hyatt Place and others, yet I hadn’t realized that the industry was in the middle of a more widespread explosion in new brands. According to a new study by PricewaterhouseCoopers, 24 new hotel brands launched in the U.S. in 2005 and ‘06, the most in a two-year period since the late 1980s.

To break it down, PwC labeled 11 of the brands as luxury, eight as upscale, four as extended stay or all-suites and one as midscale without food and beverage. Five of the flags are part of the new lifestyle brand category (which, according to PwC, encompasses several segments: it counts aloft and NYLO as upscale and Element, Hyatt Place and Cambria Suites as extended stay/all suites).

While 24 new flags constitutes a significant addition to the chain landscape, most of the new brands will never reach mass-market status and weren’t intended to do so. Particularly in the luxury segment, brands like Solis, Le Crillion and LXR Resorts will probably just serve to identify a similar group of hotels under the same management or ownership.

The odd thing about the lodging business is that while new brands proliferate, old and tired brands never seem to die. For example, the other day someone mentioned to me that he couldn’t believe that people still chose Howard Johnson to flag their properties. Good question.

Notes from the AAHOA conference

As usual, last week’s AAHOA conference was full of energy, brotherhood and just a touch of controversy. Here are my observations after three days in Charlotte:

• The crowd was smaller than I expected, especially given the concentration of Asian-American hoteliers in the Southeast and within a day’s drive of Charlotte. I didn’t hear an official headcount from the organizers (and rarely do I believe these pronouncements from any conference official), but AAHOA Chairman Mukesh Mowji noted that 400 members registered on-site on Thursday, causing a problem in feeding everyone for dinner that night. Since this meeting typically has a large walk-up attendance, I’m not sure why the organizers didn’t anticipate the possibility, especially given the history and this year’s conference location.

• There is still a lot of enmity among AAHOA members toward the brands, especially those that the often-paranoid Indian-American hotelier feel are unfair to them. And not to be too cynical, but it’s always good politics for AAHOA leaders to set-up the franchise companies as the bogeyman. While real issues remain in the relations between franchisors and franchisees, few Asian hoteliers can say today—as perhaps once was the case—that they don’t understand the franchise agreements—and the obligations and restrictions that go with them—when they sign on the dotted line. And today there are plenty of other more-franchise-friendly brands from which to do business with. Of course, while these alternative flags may not perform as well as Marriott and Hilton, often you get what you pay for.

• While the group didn’t reach its lofty membership goals for 2006 (10,000 members, including 1,000 lifetime members), it’s still an impressive organization: 7,800 members who own 22,000 hotels worth a collective $60 billion.

• As part of its renewed offensive against the chains, AAHOA conducted Performance Appraisal Reports on the major chains. As follow-up to these studies, it’s been pursuing the brand companies to further comply with its 12 Points of Fair Franchising, a creed for which AAHOA defined in greater detail in the past year. At the conference, association officers announced that Accor will soon file new UFOC documents that comply nearly completely with the 12 points. La Quinta is also falling into line, and AAHOA thinks it can bring the other chains to the bargaining table.

• The group made significant strides in the past year in the political arena. It established a liaison in Washington, DC, snared a meeting with Secretary of State Condoleeza Rice on immigration issues and for the first time, endorsed and gave money to political candidates. Next steps are the establishment of a full-fledged lobbyist in DC and the holding of its ‘09 convention in Washington. Watch out AH&LA.

Do we really need a new brand?

The annual AAHOA conference is generally marked by some news event or more often a controversy. No controversies this year, but a big news story is dominating this week’s convention in Charlotte. The news was the announcement from former AAHOA Chairman and community gadlfy Mike Patel of the launch (technically a relaunch) of Budgetel, a new franchise-friendly economy brand that appeals to the Asian hotelier community’s long-held dream of an Indian-American-owned brand.

In a nutshell, the new Budgetel will offer low fees (around three to four percent), one-year agreements, no liquidated damages and an opportunity for franchisees to become equity partners in the company. Brand founder Patel says the brand “will live up to the spirit of AAHOA’s 12 points of fair franchising,” the group’s hot-button issue since Patel championed the cause during the chairmanship in 1998-99.

The real question, of course, is will the brand succeed? Also, does the industry need another brand, particularly in the economy segment? And with this brand will Patel be able to meet the high expectations most Asian-American hoteliers have from a chain that’s owned by a member of the community?

The good news is that Budgetel denotes a clear identifier of its segment and that Budgetel has some built-in consumer awareness. (Budgetel is the former name of Baymont Inns. Marcus Hotels sold Baymont/Budgetel to The Blackstone Group, which then sold Baymont to Wyndham and the Budgetel branding rights to Patel.) Also, Patel and his executive team have plenty of experience in the franchised hotel world.

The real issue in my mind is whether hotel owners need another franchise-friendly brand from which to choose. Companies like Accor, La Quinta and particularly Vantage Hospitality have grown quickly in recent years by staying in touch with the real and perceived needs of the hotel ownership community. Still, I wouldn’t bet against Mike and his organization. He’s smart, well-connected, politcally savvy and a winner in everything else he’s ever attempted. Brand companies like Choice and Wyndham need to watch their backs.

Putting a bright face on patronage

A pat on the back—make that a cheer—goes to Hilton Hotels Corp. for putting its money where its mouth is in Baltimore. In each of the next 15 years, Hilton plans to make $200,000 available to National Academy Foundation students in a $3-million college scholarship program designed to encourage them toward careers in hospitality and tourism. Hospitality is one of three tracks offered by National Academy, which shares a building with Digital Harbor High School in the city’s Federal Hill section. The scholarships will go to graduating seniors concentrating in hospitality and tourism.

The Baltimore Sun says the stipends make good on a pledge Hilton made in 2005 after it was selected to operate the city-owned convention center hotel. A 20-story, 756-room Hilton, to be on Pratt Street adjacent to the Baltimore Convention Center, is set to open in August 2008. It should prove stiff competition for the Hyatt Regency Baltimore near the center.

The paper reports that Hilton promised to create the scholarship fund to land the deal, so the motivation wasn’t altogether altruistic. The package Hilton agreed to also guaranteed that 75 percent to 85 percent of its hotel jobs would go to city residents including ex-offenders and the unemployed.

Again, the motivation for that wasn’t totally altruistic, either. But that kind of guarantee is not only politically correct, it’s plain smart politics, particularly in a city that, according to a recent Police Forum study, experienced a 20-percent increase in homicides and a 30-percent jump in robberies in the past two years. Anything that brightens city life and cuts unemployment is good news these days. Besides, Hilton’s Baltimore actions eloquently attest to the spirit of hospitality.

The Heavenly Burger

Like a lot of business travelers, I sometimes  end up ordering roomservice dinner. It’s certainly not glamorous; in fact, it can be a little depressing but that’s life on the road.

A burger is usually a good, comforting choice for roomservice dinner, and over the years I’ve had plenty of Marriott burgers, which some road warriors lionize as the ultimate roomservice food. I generally agree, until tonight when I had my first Westin roomservice burger.

First of all, service is great here at the Westin Charlotte (host hotel for this week’s AAHOA Conference). The property is full, but my order arrived in less than the 45-minute window promised by the ordertaker. As a result, the burger was hot and the fries crunchy. The burger was thick and juicy and topped by a tasty tomato (hard to do in March) and carmelized onions (a nice touch). The bun was brushed with oil and nicely toasted.

So next time you’re in a Westin, the home of the Heavenly Bed, try one of the Heavenly Burgers (my term).