Hampton Inn emerged as the definitive winner in the U.S. Hotel Chain Survey's midprice tier—a tier poised to grow in importance to travel buyers in the current economy—while InterContinental Hotels Group's Holiday Inn brands showed marked improvement.
(Editor's note: Download a PDF of the full 2009 U.S. Hotel Chain Survey here, including all charts, rankings and analysis.)Hilton Hotel Corp.'s biggest brand, rising from fourth in the midprice category in 2008, Hampton maintained a healthy premium over its competitive set and also scored highest in eight of the 12 areas in which buyers rated the tier. It scored highest in arranging individual travel, meeting facilities, corporate rate programs, commission payment systems, staff, physical appearance, in-room business amenities and overall price/value relationship.
Tom Botts, a partner with strategic advisory firm Hudson Crossing, said the tier has seen a lot of investment in recent years, but Hampton has the advantage of Hilton's large, global operation. "There's a lot of players in this tier, and Hampton benefits disproportionately from their tie-in with Hilton," Botts said. "It helps them on the sales side and the loyalty side."
Phil Cordell, Hampton's global head of brand management, said the biggest impact came from enhancing the breakfast to include hot items and a new bedding program.
Hampton also is renovating its lobbies and by year-end plans to have high-definition televisions in all of its rooms. At the same time, it is increasing its presence globally, particularly in urban markets.
"We'll open about 125 hotels this year and about 125 next year, including a couple more in Manhattan, downtown Boston and Chicago," Cordell said.
IHG's Holiday Inn and Holiday Inn Express brands showed the biggest turnaround in the tier. Ranked sixth last year, Holiday Inn Express jumped to second, also scoring highest for its in-room amenities and ability to arrange group travel. The Holiday Inn brand, which finished in last place in 2008, vaulted to third.
Holiday Inn has been undergoing a relaunch during the past few years, said senior vice president of brand management John Merkin, gaining new signage, better exterior lighting and improved bedding and bath while putting properties through a certification process.
"We've taken out the hotels that have given us the most perception problems and are re-imaging the remaining hotels," Merkin said. "We're about one-third of the way through that relaunch, and it will be completed by 2010."
Choice Hotels International's Comfort Inns & Suites brand and Marriott International's Fairfield Inn completed the top five in the category. Buyers also gave Carlson Hotels Worldwide's Country Inns & Suites highest marks for its food offerings.
Though BTN for several years has not distinguished between midprice with and without food and beverage service, Bjorn Hanson, an associate professor at New York University's Tisch Center, said midprice without F&B should be one of the relatively strongest tiers this year, while midprice with F&B brands will have much more of a struggle. "These on average are older hotels that might be viewed as having less value," according to Hanson.
The newer brands, meanwhile, will benefit from being fresher. Hampton's high-definition television initiative, for example, gives it an amenity not seen even in some upscale or upper upscale hotels.
This year, IHG has put more weight behind its sales force, adding 20 positions to the global sales team and opening a new sales center in Atlanta, and Holiday Inn has seen more preferred agreements as a result, Merkin said. "We're very bullish that this is the time to gain share," he said. "Based on new expense policies, we're definitely getting a lot of people who wouldn't have considered us in the past."
"It's the slowest period we've had in a number of years," added Hampton's Cordell. "You haven't necessarily seen the cessation of business travelers, just an adjustment in their travel patterns, perhaps adjusting the frequency of visits from three times a month to one time a month."