IHG Does the Executive Shuffle

Yesterday’s news of a switch at the top of IHG Americas’ executive ranks qualifies as a surprise but not a shock. In case you missed the news, CEO Jim Abrahamson resigned his post to become president & COO of Interstate Hotels & Resorts and by years-end to replace Tom Hewitt as CEO of the industry’s largest management company. Concurrent with the announcement was word that Kirk Kinsell is returning to Atlanta to assume the Americas CEO post after three-plus years as head of IHG’s Europe, Middle East and Asia region.

It’s not a negative, but both Abrahamson and Kinsell have a habit of only staying in place a couple of years before moving on to another challenge, usually one that’s greater than the one they left. Abrahamson’s resume includes stops with Hilton, Marcus and Hyatt, while Kinsell had executive positions with Holiday Inn Worldwide, ITT Sheraton, Avado Brands (a restaurant company) and Micell Technologies before joining IHG in 2002.

Frankly, I was surprised Kinsell didn’t get the Americas job back in late 2008 following the death of former CEO Steve Porter. He represented continuity during a difficult period for the division and he is well known and highly regarded in the lodging development community. The hiring of Abrahamson was accompanied by Kinsell’s promotion from head of development for the Americas to chief of the EMEA unit. The decision for IHG to hire Abrahamson was a sound one (as it is for Interstate today), but I always thought some day Kinsell would lead the division. That day has come.

Finally, I have no specific reason to doubt IHG’s pronouncements that Abrahamson’s departure has nothing to do with the changing of the guard at the top of the company’s corporate ladder. Former CFO Richard Solomons becomes chief executive of the London-based firm on July 1, following the retirement of Andy Cosslett.

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Another Innovation for Marriott: Social Media Gaming

Marriott is pretty well known for its hotels, but the lodging giant is now dabbling in social media gaming. If you’re even a slight user of Facebook, you’ve probably seen, whether you want to or not, more than one post or mention of Farmville and Mafia Wars. Now you can play My Marriott Hotel, which allows gamers to manage a virtual hotel restaurant in similar fashion to those other popular Facebook games.

Gamers will be able to create their own restaurant and then manage it from buying equipment and ingredients to hiring and training employees to serving guests. Points will be earned for happy customers (and lost for poor service) and profitability will be the ultimate measure of success.

Susan Strayer, senior director of global employer brand and marketing for Marriott, says more games will be offered down the road. Once gamers succeed at running a restaurant, they’ll be able to advance into other areas of hotel operations all the way up to running the entire property.

Although a press release from Marriott yesterday said the hotel company would use the game as a tool to help attract employees, Strayer said the goal was strictly to add brand awareness. The game isn’t designed to generate any revenue (it’s free to play), and Marriott doesn’t have plans to try and convert gamers into associates.

But ultimately the added brand awareness will help attract younger generations to the company’s hotels, as customers and employees. Online games have surpassed email to become the second most popular activity on the web, accounting for 10 percent of time spent online, according to a recent report.

“Consumers are more inclined to buy from brands on social media,” Strayer said. “This allows people to engage with us because they want to. We have to be where they are: online.”

The new game only adds to Marriott’s obvious focus on social media—from Bill Marriott’s regularly updated blog to the company’s recent enhancements to its online career center.

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A Global Hotel Focus at NYU Conference

The NYU International Investment Conference is finally living up to its name as an international meeting. This year, more so than any of the 33 previous editions of the conference, the dominant discussion among most speakers is the vast global growth opportunities available for U.S. hotel companies.

At yesterday morning’s CEOs Check In panel at the Marriott Marquis in New York City, all five brand company chief executives stressed their plans for international growth, especially in emerging markets and China in particular. For each brand represented on the panel—Carlson, Hilton, IHG, Four Seasons and Starwood—most development is focused outside of North America. Hilton’s Chris Nassetta said 75% of the company’s rooms under construction are outside of the U.S. One fourth of IHG’s pipeline is in China, said new CEO Richard Solomons, and, according to CEO Katie Taylor, only two of 60 new Four Seasons in the works are in North America.

In a later presentation, Mark Lomanno gave STR’s imprimatur on the topic: 182,000 hotel rooms are under construction in Asia Pacific versus 67,000 rooms being built in North America. And Starwood chief Frits van Paasschen showed the greatest commitment to China. He’s leaving this week for a month-long visit to the country. He’ll visit Starwood properties, talked to the company’s partners in the region and generally get to understand the Asian culture. As he said, “You never really know a country until you buy groceries there. I plan to buy groceries in China.”

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Padre Hotel Wins Design Awards Poll

In Lodging Hospitality’s first ever online poll to determine the readers’ choice for favorite Design Awards winner, the tiny Padre Hotel in Bakersfield, CA took top honors.

The 112-room boutique hotel designed by Graham Downes Architecture earned 1,539 votes and edged the Ritz-Carlton Hotel & Residences and the JW Marriott at LA Live with 40.3% of the vote. The LA Live project from Gensler and Barry Design Associates was at 35% with 1,339 votes.

In total, 3,819 votes were cast since the poll debuted on April 19 and the complete results are listed below. Keep an eye out for a follow-up story on the Padre Hotel in the coming weeks. Read about all five Design Award winners here, and follow the links to see photo galleries of each.

1. Padre Hotel / Bakersfield, CA 40.3% (1,539 votes)
2. Ritz-Carlton Hotel & Residences and the JW Marriott at LA Live 35.06% (1,339 votes)
3. Fairmont Pittsburgh 16.63% (635 votes)
4. InterContinental New York Times Square 5.76% (220 votes)
5. Cosmopolitan of Las Vegas 2.25% (86 votes)
Total Votes: 3,819

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Supreme Court Ruling Means Headache for Hotel Operators

A ruling yesterday from the U.S. Supreme Court could become a big headache for many hotel owners and operators. The decision upheld an Arizona law that imposes tough penalties on businesses that intentionally hire illegal immigrants. Eight other states have recently passed similar legislation and, given the Supreme Court imprimatur, more states are bound to follow.

We all agree the country’s immigration policies are a mess and something—preferably a unified solution that covers all states—needs to be done about it. But placing the onus for enforcement of immigration laws on the backs of mostly small business owners is wrong. The key phrase in the law is “intentionally hire illegal immigrants,” a clause that’s ambiguous at best and very difficult to disprove at worst. The result is many business owners will hesitate to hire anyone they even suspect may be here illegally, even if they present what appears to be sufficient proof of their eligibility to work in the U.S.

Many people, especially those of Hispanic dissent, will be unable to get the jobs they need, and hotel owners will be placed under an enforcement microscope, making their already difficult jobs that much harder.

Unfortunately, once the Supreme Court speaks, there is little chance of turning back except for a change in federal law, something Congress is unlikely to take up given the current anti-immigration undertones among the electorate.

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Hotel Housekeeper Attack Prompts Security Scrutiny

The lurid news story du jour is the allegation of sexual assault of a New York City hotel housekeeper by former IMF chief Dominique Strauss-Kahn. The incident and subsequent media furor has led to calls for stepped-up measures to ensure the safety of all hotel personnel, housekeepers in particular. While some of the proposals on the table are well intentioned and thoughtful, some are way off base and more than likely simple bids for publicity.

For example, a New York State assemblyman says he’ll introduce legislation requiring employees who “regularly enter hotel or motel rooms” to wear panic-alert alarms that will notify hotel security in case of trouble. His idea may be well meaning, but it is off the mark. The hotel industry is entirely capable of protecting its employees without the assistance of additional (and costly) government intervention.

To be sure, no system—even the panic alarms proposed by the legislator—is entirely foolproof and guarantees employees won’t be flashed, groped, assaulted, robbed or raped when they open a hotel door to clean it or to address a maintenance issue. But most lodging operators have procedures and systems in place to protect their employees as reasonably possible. Housekeepers are instructed to prop open guestroom doors, they typically work in teams on each floor, and many of them carry mobile telecommunications devices.

Bottom line: The government should keep their nose out of this situation and, most importantly, hotels should double check their procedures and training materials to make sure employees take all necessary precautions to prevent another incident like the one in New York City.

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Don’t Surprise Your Guests with Resort Fees

Resort fees never make guests happy, but property owners certainly have the right to charge them. The issue has gotten a little more complicated this week for the PGA National Resort & Spa in Palm Beach Gardens, FL.

Two New York residents, who allege they were charged daily resort fees not disclosed prior to checkout, filed a $25-million class-action lawsuit.

The complaint alleges the plaintiffs were quoted a total price when making reservations by phone, but those prices did not include the daily $25 resort fee on their bill at checkout. Similarly, the lawsuit alleges, customers making reservations online were also not shown the resort fees as part of the total price (the resort’s website now lists the fees as part of the terms and conditions, but I did not check before seeing news of the suit Monday).

I’m not sure if there’s any legal precedence with a case like this or if what is alleged is true, but there’s a lesson to be learned for owners and operators: Make your guests aware of all charges, and as this blog has railed before, those charges better provide value or your customers may leave your property with a sour taste in their mouth no matter how great their stay was prior to checkout.

The only thing unexpected guests should find at your resort is some delight, not dismay at a disguised charge at checkout. You want them to come back, right?

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Finally, Incoming Tourism Could Be ‘Ready for Takeoff’

The U.S. Travel Association today released a 52-page report detailing the inadequacies of the current visitor visa process and unveiled a plan that would create 1.3 million U.S. jobs and add $850 billion to the U.S. economy by 2020 by reforming the antiquated system and welcoming foreign guests.

The news is no doubt music to the ears of most hotel company executives who have long lamented the failings of the current visa process.

“As a nation, we’re putting up a ‘keep out’ sign,” said Roger Dow, president and CEO of the U.S. Travel Association. “The U.S. imposes unnecessary barriers on international visitors, and that inhibits our economic growth.”

The 52-page report—titled “Ready for Takeoff: A Plan to Create 1.3 Million U.S. Jobs by Welcoming Millions of International Travelers” (download the PDF here)—recommends four steps to overhaul the system:

• America must align U.S. State Department resources with market demands;
• America must reduce visa interview wait times to 10 days or fewer;
• The U.S. State Department must improve planning, measurement and transparency; and
• America must expand the Visa Waiver Program.

In San Diego at this year’s Americas Lodging Investment Summit, Marriott President Arne Sorenson talked about the importance of outbound travelers from countries like China and the jobs that would need to be created here to host the U.S’s share of the projected 100 million Chinese traveling abroad in the next five years.

“We’re all vying for pieces of the same pie,” said Best Western CEO David Kong on the same industry leaders panel at the event, “but if the pie was twice as big, that would be good for everyone. We all need to work together.”

The USTA’s report is the first step to welcoming international travelers. Its Discover America Partnership—with the AH&LA, the National Restaurant Association, the National Retail Federation and the U.S. Chamber of Commerce—should help the lobbying efforts to see the recommendations become reality.

Hotel owners and executives need to follow suit, and do what Sorenson called for in San Diego: “We all need tell our elected officials.”

The reasons are obvious.

“Increasing travel to the United States is the most effective form of economic stimulus,” said Dow. “Travel supports communities, injecting billions into the U.S. economy and creating millions of new jobs.”

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Padre Hotel Takes Lead on LA Live in Design Awards Poll

A little more than halfway into the first ever public vote for Lodging Hospitality’s annual design award winners, the tiny Padre Hotel in Bakersfield, CA has a narrow lead on the massive LA Live project in Los Angeles. More than 3,200 votes have already been cast and the Padre has received 39% as of Monday afternoon. LA Live, featuring the Ritz-Carlton and the JW Marriott, is close behind with 32% of the vote.

The Fairmont Pittsburgh is in striking distance with almost 20% of the vote, while the InterContinental New York Times Square (6%) and the Cosmopolitan of Las Vegas (2%) are well back. To read about all five LH Design Award winners, check out the full story here, and vote for your favorite here.

The five projects were all honored in the April issue of Lodging Hospitality and the public vote winner will be further spotlighted online and in a later issue. The poll closes on May 31, so there’s still plenty of time to vote for your favorite.

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Don’t Let Gas Prices Sink Your Summer

While we’re all still reveling in Sunday’s elimination of Osama bin Laden as a terrorist threat, at some point the country will need to turn its attention back to some of the difficult problems it faces. One particularly troubling issue, especially for the travel industry, is the unprecedented rise in gas prices at the pump. How naïve I was several weeks ago when I speculated what effect $3.50 a gallon gas would have on the summer travel season.

Today, the price at the station at the entrance to my subdivision is $4.14 a gallon, and now so-called experts say it might reach $5 by summer. Whereas I didn’t think $3.50 gasoline would put much of a dent in summer travel, I’m quite certain $4.50 or $5 gas will. That’s very bad news for the hotel industry.

If your hotel or hotels are dependent on vacation travelers, you’ll know soon how much of an impact rising fuel prices will have on your business this summer. My guess is you already have a clue, judging by the volume of advanced reservations you’ve received so far. Even if they’re lower than expectations, it’s not a certainty the summer will be a complete bust. Lots of families are taking a wait-and-see attitude about summer travel. Some will skip their planned vacations, but I suspect many more will still go but make adjustments in other parts of their budget, lodging being a prime example.

No matter what your advanced reservations data tell you, it’s wise to revisit your summer marketing plans. It’s probably time to devise new price-sensitive promotions, review your participation in online travel agencies, tap into all chain marketing plans that make sense for you and look for local and regional cooperative marketing opportunities. It’s time to go guerilla. If you don’t, it could be a long, hot and unprofitable summer.

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