For the first time since 2001, Hilton Garden Inn claimed the top spot in the U.S. Hotel Chain survey's midprice segment, a tier that is among the fastest-growing in the hotel industry in terms of revenue and supply, and one of increasing interest to business travel buyers as more look to trade down service levels within their hotel programs for cost savings.
Together, Hilton Hotels Corp. and Marriott International dominated the category, with their brands taking the top five slots: SpringHill by Marriott, first in the category last year, in second, Courtyard by Marriott in third, Hilton's Hampton in fourth and Fairfield Inn by Marriott in fifth.
Hilton Garden Inn earned top scores for its meeting facilities and its food and beverage offerings, and tied with SpringHill to lead in the physical appearance of its properties and its overall price/value relationship. Adrian Kurre, Hilton Garden Inn senior vice president of brand management, said the brand shines in those categories because most of its properties are new builds rather than conversions, and it started an overhaul in room design about five years ago.
"2007 was getting all of that into place," Kurre said. "Our internal tracking on our loyalty scores were also up, so the decisions we made and the process we were in really all played out."
Kurre said it began with the brand working ahead to conform to February 2009 digital television standards and updating aspects of the room of interest to business travelers. Hilton Garden Inn implemented a barometric-pressure-controlled sleep system, new duvets and ergonomic desk chairs, all of which reached critical mass in 2007, he said.
Phil Cordell, senior vice president of brand management for Hilton's much more widely distributed Hampton brand, said Hampton has kept its high standing in the survey with similar improvements, such as a new bedding program and a reintroduced breakfast program. In addition, Hampton is making gains with business travelers as it develops more of an urban presence, with five Hamptons set to be open in New York by year-end and growth in Philadelphia, Boston, Chicago and Washington, D.C.
"We started out as a roadside, suburban hotel. The brand has really grown up," Cordell said. "We've moved up a little in rate, and we've been introduced to a new world of business travelers."
The two Marriott brands received the top scores in most other survey categories. Buyers gave SpringHill top marks for its ability to arrange individual travel, its staff and the quality of its in-room amenities. Courtyard was rated highest in arranging group travel and the quality of its business center.
In terms of corporate rate programs, however, buyers' top pick was La Quinta Hotels. Feliz Jarvis, La Quinta's executive vice president of sales, said the brand maintains a number of accounts with such large companies as Wal-Mart, Home Depot, FedEx and UPS, and also is able to reach others that might not have much leverage with the hotel giants.
"We do not have the kind of distribution that our competitors, like Marriott and Hampton Inn, have with their empires, so we tend to be a little more flexible in what we provide to them," Jarvis said. "There might be some accounts that Marriott might not offer a national discount that we might offer a national program."
Choice Hotels International's Comfort Inn brand, meanwhile, was rated highest by buyers for its commission payment system.
BTN in the 2007 survey stopped distinguishing between midprice with and without food and beverage because of the increasing overlap in the two tiers, particularly as those in the latter category, such as Hampton, add such features as hot breakfasts. PricewaterhouseCoopers' 2007 U.S. Lodging Industry Report and Forecast said the midprice without food and beverage tier would be one of the fastest-growing segments this year, with a supply growth rate of 4 percent, double the overall U.S. average of 2 percent. In terms of rate and revenue, the tier was behind only luxury, with a forecast 6.8 percent growth in average daily rate and a 6.4 percent growth in revenue per available room.
Corporate travel is responsible for some of that growth, as buyers increasingly turn to the tier as a cost-cutting strategy
(BTNonline, Feb. 4). "We've seen some of our corporate accounts that had maybe five of our hotels increase that to maybe 60 or even our entire brand," La Quinta's Jarvis said.
Part of the midprice allure is inclusive pricing often offered for such amenities as breakfast, parking and Internet access. Most major midprice brands offer Internet access as part of the rate, while upscale properties generally charge for it. Hilton Garden Inn's Kurre said the infrastructure will pave the way for even more in-room improvements in the near future. "With wireless and broadband cards, fewer people will go through hotels to get high-speed Internet access," Kurre said. "We now have the right wiring in the room to be able to figure out some other opportunities with in-room entertainment."