2010 U.S. Hotel Chain Survey: Le Meridien Dethrones Upper Upscale Leader JW Marriott(2)

Starwood Hotels & Resorts' artsy Le Meridien brand this year by a hair ended JW Marriott's three-year reign atop the upper upscale tier in Business Travel News' 2010 U.S. Hotel Chain Survey, which tabulated ratings from 387 buyers.

The upper upscale tier had the most varied and heated results, and other tiers saw a mix of familiar winners and newly emergent top brands. Among multibrand hotel companies, InterContinental Hotels Group and Hilton Worldwide fared the best, with the former boasting at least a third-place finish in all eligible tiers and the latter garnering three of the top five upscale slots and nearly sweeping the midprice tier with its Hampton brand.

One hundredth of a point separated the total scores of the top four brands in the upper upscale tier, which saw a reversal of fortune for many brands from the 2009 survey. JW Marriott, the top brand in the survey since 2007, fell to third, and last year's third-place brand, the Marriott flagship, fell to twelfth.

IHG's flagship and Accor's Sofitel—like Le Meridien, another brand of French origin—vastly improved their rankings from 2009, on the other hand. InterContinental climbed from eighth to second, and Sofitel tied with JW Marriott for third, up from an 11th place finish last year. Marriott's Renaissance placed fifth, and Starwood's W moved up from 12th to sixth.

Top scores for the individual criteria were divided somewhat evenly among the top six hotels. JW Marriott scored high for arranging group travel and resort meeting facilities; Renaissance was rated the best overall value; and W was honored for its food and tied with JW Marriott for property appearance.

Le Meridien has had a few near misses, placing second last year and in 1999, but this is its first year at the top. Buyers gave it top marks for staff, in-room amenities, non-resort meeting facilities and individual travel arranging capabilities.

The brand, founded in Paris in 1972, has undergone a major overhaul since Starwood acquired it in 2005, when its portfolio consisted of 130 properties, "some fabulous and some not so fabulous," said Eva Ziegler, Le Meridien's global brand leader. It since has removed about 40 hotels and added 17.

"To some extent, less is more," Ziegler said. "The portfolio is now a lot stronger, one which we can build a strong brand on."

The brand renovated 10 properties in recent years and plans to upgrade 50 more, she said. A component of the strategy has been its food and beverage offerings, particularly coffee and breakfast.

InterContinental always was a corporate travel brand, said Gina LaBarre, IHG's vice president of brand delivery for the Americas, and scored top marks for corporate rate programs and business centers.

While trading down in hotel programs has been a topic of conversation for years, the economic downturn earned InterContinental business from people trading up, she said. "Their plan was to pay X dollars to stay at an upscale property, but they can get that rate at an upper upscale property, so it brings practical luxury," LaBarre said.

Upper upscale hotels in 2009 took a hit comparable to the luxury tier in revenue and rate depletion, said Smith Travel Research vice president of global development Jan Freitag. While occupancy might recover slightly this year, rates still are forecast to drop about 2.4 percent, particularly in the early months. "The second half of the year will be better than the first half, so we may see some average daily rate increases then," Freitag said.

Sofitel, which has about 70 percent business travel and a particularly high proportion of female business travelers, actually has seen its revenue per available room improve in the past six months, said COO Robert Gaymer-Jones. Like Le Meridien, Sofitel recently has focused on improving quality and brand consistency, culling its portfolio from more than 200 hotels to 130, he said, and upgrading bedding, employee training and such ambient touches as lighting, music and fragrances.

"We're not trying to make it out to be super-luxury in this environment, but a well-managed hotel," Gaymer-Jones said. "We want an experience that may be a French experience, a feeling of elegance that people might not be expecting."

Upper upscale development will slow this year, but the top brands still report growth, particularly internationally. Sofitel, which still plans to remove a few hotels from its portfolio, aims for a network of about 160 in the next few years, Gaymer-Jones said. It has 20 hotels under development and will open 10 this year, including in Austria, Saudi Arabia and Uruguay. InterContinental also has several upcoming openings in Europe, the Middle East and Africa, LaBarre said.

Meanwhile, Sofitel and Le Meridien each want to increase their U.S. presence beyond their current handfuls. Le Meridien in February added the Chambers, a boutique hotel in Minneapolis, and Gaymer-Jones said Sofitel is working on developments in Boston, San Francisco and Miami.

JW Marriott in San Antonio in recent weeks opened its largest resort to date, and LaBarre said InterContinental this summer plans to open Midtown Manhattan's first new high-rise hotel since 2002.