Marriott International's brands swept first-place honors for nearly every tier in the U.S. Hotel Chain Survey, in a year when increasing revenues and rates are allowing hotels to invest more in renovations and amenities.
With the exception of the luxury tier, in which Marriott's Ritz-Carlton Hotels brand placed second, and the midprice extended stay and economy tiers, in which Marriott had no brands in the running, travel buyers gave their highest scores to Marriott. In the 2006 survey, midprice Courtyard by Marriott and TownePlace Suites—both of which were beaten in their tiers by other Marriott brands this year—were the only brands to be ranked first.
Sean Hennessey, president of New York-based Lodging Investment Advisors, said Marriott's scope is a benefit in keeping its edge, with the systems and sales force better able to cater to travel buyers. Travelers also are noticing adjustments recently made to the companies' brands, said Mike Jannini, Marriott's executive vice president of global brand strategy and innovation.
"We've made a boatload of changes across all of our brands in the last two years," Jannini said. "We went outside the industry and hired the best innovation firms to create very new approaches to guest room design and public spaces to make a much more engaging hotel experience."
The company scored a double victory in the upscale tier with its JW Marriott Hotels and Marriott Hotels & Resorts brands tying for the top position. Westin Hotels, Hyatt Hotels and Hilton International—which merged with Hilton Hotels early last year, and the two were separated by one-hundredth of a point in the survey—completed the top five. Unlike previous years, BTN did not differentiate between upper upscale and upscale brands, merging them into a single upscale tier.
Neither of the winners in the two categories last year, Loews Hotels and Walt Disney World Resorts, reached the required usage threshold of 20 percent of survey respondents to be included in the 2007 results.
Like the industry as a whole, the upscale segment showed strength in 2006. While occupancy for the tier showed only a slight increase, revenue per available room was up 9.7 percent for the upscale tier and 7.5 percent for the upper upscale tier, compared with an 8 percent increase in the entire industry, according to PricewaterhouseCoopers' Lodging Industry Report and Forecast, released in December.
"Business travel really continued to pick up as 2006 went along, and all indications are that it will be another robust year in 2007," Hennessey said. "People are making every effort to travel."
With increased revenues, hotel companies have been more successful in convincing property owners to implement capital-intensive upgrades, Hennessey said. Hoteliers said those efforts are reflected in the survey results, as several brands showed across-the-board improvements from the 2006 survey. The improvements also echo hoteliers' internal metrics, they said.
One such brand was Hyatt, which has invested more than $600 million in its North American hotels during the past year, including $60 million in the Grand Hyatt New York, said Tom O'Toole, senior vice president of strategy and systems for Global Hyatt Corp. The company also invested in such technology upgrades as checkin through personal digital assistants.
"Hyatt's improvement in every category is the result, without hyperbole, of the most intensive and multifaceted effort in the company's history to upgrade our brand in every manifestation," O'Toole said.
Higher tiers continue to be the primary focus of hotels rolling out new brands. Seven of nine new brands introduced in 2006 were in either the upscale or luxury tiers. In 2005, 12 out of 15 of the new brands introduced were in those tiers.
Meanwhile, hotels have focused on promoting amenities. "Upscale and luxury are most definitely pouring more resources into comfort-type amenities, like flat-screen TVs and premium upgraded mattresses," said Priscilla Campbell, practice leader of hotel advisory services for American Express Business Travel. Hoteliers said they are reaping the rewards with improved guest satisfaction numbers.
That said, buyers have faced a difficult fight in keeping rates down, and that is not likely to change anytime soon.
Average daily rates for the tier in 2006 increased year over year more than the overall industry estimated increase of 6.8 percent. Upper upscale rates increased by 7.1 percent and upscale rates were up by 8.9 percent, and upper upscale rates should continue to rise at a pace above the industry average for at least the next two years, according to PricewaterhouseCoopers. Travel buyers ranked Hilton Hotels as the brand with the best corporate rate programs, and Hilton International was ranked as having the best overall price-value relationship.
The two Marriott brands carried most of the rest of the top spots for the upscale criteria. Both tied for the best in arranging individual travel. Marriott Hotels & Resorts was rated highest in arranging group travel, facilities for non-resort meetings, staff, in-room business amenities and business center. JW Marriott was either number one or tied for the top spot in the remainder of the categories, with the exception of the hotels' physical appearance, for which Omni Hotels was the top ranked.
John Hackett, corporate director of sales and business travel for Omni, said that distinction could be attributed to the relatively short turnaround time for renovations. Since it is not as massive as Marriott, Hyatt or Hilton, Omni can complete brandwide renovations in a matter of years rather than a seven- or 12-year cycle, he said.
Omni joined JW Marriott and Starwood Hotels and Resorts' Westin brand in a three-way tie for the best quality of in-room amenities. All three recently have upgraded their bedding, a major competitive point among hoteliers, but all also pointed to other amenity upgrades. "The bed and bath wars are here to stay in the upscale segment," Omni's Hackett said. "Beyond that, it becomes what you can do to find that point of differentiation."
Hackett said part of Omni's rank undoubtedly came for the brand's free high-speed Internet offering, which still is a rarity among upscale brands
(BTN, Feb. 5).Also, Omni overhauled its minibars to provide such high-end offerings as eucalyptus bath salt and gourmet chocolates, Hackett said. Westin, meanwhile, developed a recovery kits for guests suffering travel ailments like jet lag and stomach aches, said senior vice president Sue Brush.
The key, Brush said, is keeping track of amenities guests want rather than trying to emulate other brands. For example, Westin has abandoned in-room fax machines in exchange for flat-screen televisions and high-speed Internet access. "You can't keep adding costs to the economic models," she said. "Sometimes we have to take things out in order to justify the cost of new things."
Expanding on the Marriott brands' top scores in facilities, Jannini said renovations have configured lobbies with social business zones, with better lighting, music and aromatherapy adding to the atmosphere.
Similarly, Westin has spruced up its happy hour with local customs and foods, making it a more social event, Brush said.