<B> Amex Blocks Hotel Space</B>
By Maria P. Vallejo
In a unique offering in this crowded hotel market, American Express has completed its ninth contract to provide clients with guaranteed exclusive room blocks on hotel club floors--without paying for them in advance.
With the availability of hotel rooms at an all-time low worldwide, Amex now can guarantee blocked space in key business destinations in Europe and Latin America. Even more extraordinary, it has inked these contracts without any guarantees of delivering incremental business.
The club floors, primarily targeting business travelers, are available only to agency customers of American Express, at the American Express Select hotel rate. Rooms must be booked through American Express travel offices.
Exclusive American Express club floors, under multi-year contracts, now exist in a Thistle Hotel in England, three Crowne Plazas in Mexico and five Crowne Plazas and Hiltons across South America. One hotel in Mexico is expected to remove its club floor, but officials declined comment on the reasons.
"There's a belief that this is a valuable product to have, and the hotels have been willing to invest in it," said Amex vice president of hotel and car relations Donna Seeherman. "It's an opportunity to bring travelers into a hotel and build some loyalty."
American Express officials, meanwhile, are working on bringing the concept to the United States and Europe before the year is out, Seeherman said, though she declined to reveal their exact locations as yet. "We would like to open as many as we can, and we'll be able to launch something this year," she said. "It's just so intensive to get it up and running, and so unpredictable."
Hotels are chosen for the program based on the volume of American Express customers traveling to their destination and each hotel's ability to provide the required services and amenities. Club floors must offer separate checkin/checkout, basic in-room business amenities and access to a business center.
Since the contracts do not guarantee any percentage of increased or sustained business, the majority of the financial burden falls upon the hotels. Clearly, though, participating properties believe that the floors will increase their corporate business. Pilot tests in South and Central America showed some properties doubled their number of room nights booked through American Express, Seeherman said. Amex and the hotels both tracked the program's progress.
While participating properties risk empty rooms by holding floors for American Express customers, many still are interested in the program, believing that the benefits of increased corporate business outweigh the risk.
"The investment is entirely by the hotel, but I don't have a lot of concern that this will generate repeat customers," said Heiko Figge, executive general manager of the Mount Royal Thistle Hotel in London, which offers an Amex floor. "We obviously are delighted that American Express has chosen us, and that gives justification for our investment."
Mount Royal on Jan. 13 became the first European hotel to join the preferred club-floor portfolio. It credits the program with a 20 percent increase in bookings by Amex customers in January and February, when they comprised about 14 percent of the hotel's total business.
Mount Royal expects to gain name recognition and increase its U.S. business traveler mix by partnering with the largest travel agency in the country. The hotel now has 45 percent corporate business, with 20 percent of that coming from the United States. "American Express has a very strong brand name, and we're trying to establish our brand name as well. This is an endorsement for our hotel," said Julia Record, a Thistle spokesperson.
American Express has been contacted "by several hotel chains that are very interested in this concept in Europe," said Jan Luff, manager of the agency's hotel relations group for the Middle East and Africa.
Based on the early positive results at the Mount Royal, meanwhile, the hotel in June will add a mini-gymnasium for the exclusive use of club floor guests. Hotel officials said they plan to continue adding amenities and improved services to the Amex club floor to further increase business and retain customers.
"Just because we have the club here doesn't mean we don't have to still work just as hard to maintain the loyalty of American Express travelers," Figge said. "At the end of the day, it's the traveler's choice."
Located on the hotel's second floor, the club floor has 97 guest rooms with a dedicated staff. It offers complimentary breakfast, a private lounge, an exclusive Amex business center, guest rooms with fax machines and modems, and guaranteed early checkin/checkout upon request.
Amex customers interviewed by Business Travel News said expedited checkin/checkout service, individualized service and standardized high service levels are a prime attraction--and they plan to continue booking rooms in hotels that offer the floors.
"I'm looking for consistently high quality, and if I can stay at a hotel under the recommendation of American Express, then I'm going to," said Jeff Dean, a marketing consultant at International Sales & Marketing, based in Thames Valley, England. Dean, who is an American Express Gold Card holder, spends about 150 nights per year in hotels.
"The idea of having this standard floor for business travelers is very important," he said. "They treat the business traveler different than everyone else. You get treated as though you are an experienced traveler, and they know that your expectations are high.