Cendant Hotel Group and Marriott International last month announced extensive upgrades of their respective Ramada and Fairfield Inn midprice brands to enhance their appeal to business travelers. As part of the upgrade, both Cendant and Marriott intend to remove a significant number of substandard hotels from their systems.
Combined with already announced changes at Hilton Garden Inn, Holiday Inn and Courtyard by Marriott
(BTN, April 12), the repositioning of Ramada and Fairfield Inn is the latest evidence of an identity crisis embroiling the midprice segment. Whereas chains in this category used to be defined by whether they provided food and beverage on site, those distinctions have blurred in the past few years. Instead, certain brands have added a variety of services and amenities that position them closer in price point to upscale, full-service hotels, while other brands have sought out the lower end of the midprice market and now compete more closely with the economy and even budget sectors.
During the industry downturn, many buyers began offering more midprice options for travelers to book. With the rebound in demand this year, midprice chains are looking for ways to ensure they remain on the short list of buyers' preferred providers.
For travel buyers, the realignment adds confusion to what already was a crowded, highly competitive field. "Depending on the location, some midprice hotels clearly will be limited service, but in other locations the same chain might operate a hotel that frankly seems much more upscale," said Colleen Guhin, strategic sourcing manager for travel and telecommunications at ON Semiconductor in Phoenix. "It might be a newly built hotel, more of a downtown than suburban location or a higher tier within the same brand."
Approximately 160 of 815 U.S. Ramada hotels are in default and will be removed from the system in the coming months. "Roughly one-third of our inventory is known as Ramada Limited, which has been our lower-end tier. We don't plan to add any more Limiteds to the system, focusing instead on Ramada Inns and our higher-end tier, known as Ramada Plaza," said Keith Pierce, brand president. "It's the Ramada Plazas, many of which are in downtown locations, that have had the extra services and amenities that appeal most strongly to business travelers. This is the direction we want to take the brand overall."
As part of the repositioning, Ramada will mandate complimentary high-speed Internet access, which has become the amenity most in demand by business travelers, and upgrade complimentary breakfast and bathroom amenities.
The repositioning comes on the heels of Cendant's pending acquisition of Ramada International from Marriott. Ramada hotels outside North America have tended to be positioned in the full-service category, so upgrading the North American portfolio will help make the brand more consistent worldwide. That deal is scheduled to close by year-end
(BTN, Sept. 15).Within Cendant, the Ramada upgrade is significant from another perspective, since it represents an attempt to distinguish Ramada in the minds of travel buyers and travelers from its roster of eight other midprice brands.
Cendant's only other brand specifically to target business travelers has been the newer and much smaller Wingate Inns International, which last month made complimentary wireless high-speed Internet access in guest rooms as well as public space a brand standard.
Due to substandard performance, Fairfield Inn expects 40 properties out of 527 to leave its system by early 2005. "Behind the brand's repositioning is the Fairfield Inns & Suites prototype, which was launched in 2000, and scores highly in guest satisfaction," said Liam Brown, the brand's senior vice president of owner and franchise services. Average daily rates for the 111 suites properties tend to be significantly higher than at regular Fairfield Inns.
"With this core of suites properties driving the brand, we're at the right point to prune and plant, on the one end removing underperforming hotels and on the other tapping into the growth opportunity we have with the suites model," Brown said.
Among the new service features being introduced across the system are: express checkout, in-room coffee makers and a complimentary national daily newspaper left by the guest room front door. Complimentary continental breakfast and free high-speed access already are brand standards in all North American hotels.