BTN U.S. Hotel Chain Survey, 2008: JW Marriott Wins Upscale As Marriott, Hilton Dominate

Travel buyers are showing high levels of satisfaction with Marriott International and Hilton Hotels Corp., as the two companies' brands dominated most tiers in the 2008 U.S. Hotel Chain Survey.

For the second year in a row, Marriott's JW Marriott brand was rated highest by buyers in the upscale tier and improved its score compared with last year's. Marriott's flagship brand, which tied JW Marriott for the top slot in the 2007 survey, was close behind, tied with Starwood Hotels & Resorts Worldwide's W Hotels. Marriott's Ritz-Carlton brand also was one of two top scorers in the deluxe tier.

Hilton, however, stole a bit of Marriott's thunder in the other tiers, which Marriott brands also dominated last year. Hilton Garden Inn and Homewood Suites by Hilton both were top-rated in the midprice and upscale extended stay tiers, although Marriott brands were close behind in both.

Although JW Marriott is much smaller than other major upscale brands—about half of its 40 total properties are in the United States—it consistently has gained favor with buyers during the past three years, with buyer satisfaction ratings for the brand constantly rising in the survey. On a five-point scale, the brand has risen from a score of 3.72 in 2006 to 4.07 in 2007 to 4.17 this year. At the same time, in J.D. Power and Associates' 2007 North America Hotel Guest Satisfaction Study, which considers the brand to be part of the luxury category, it even overtook Four Seasons to become second-highest rated overall, behind only Ritz-Carlton, according to Don Semmler, Marriott's executive vice president of full-service brand operations.

"JW Marriott started as a salute to our chairman, and has grown up and is performing extraordinarily well," Semmler said. "It's a brand we can still afford to build and have the ability to get a return to investors without having to do a lot of residential components."

In addition to the top average score, JW Marriott also received the top rating in eight of 13 criteria in BTN's survey, including resort meeting facilities, physical appearance, business amenities and business center, group travel arrangement and corporate rate programs. The other five categories were split by Marriott and W: Marriott was top-rated for arranging individual travel and non-resort meeting facilities, and W got top marks for its in-room amenities, commission payment system and food quality.

Semmler was not surprised that the Marriott brands scored well in terms of meeting facilities and arrangement, and said the company will continue to put meetings innovation at the forefront this year.

The Marriott brands also have been investing in property improvements, particularly in the lobbies. During the next few years, Marriott plans to invest in 100 hotel lobbies, adding communal tables, working space and a day/night bar component to increase their appeal as gathering spaces, Semmler said.

"It's a way to take lobbies from being like your grandmother's old living room to active spaces," he said.

W Hotels, which surged from a ninth-place finish in 2007, also has been investing in property improvements, including partnerships to redesign W properties in Los Angeles and San Diego and launch a new presidential suite at its San Francisco property, according to Starwood.

"W is very dependable," said John Roberto, senior vice president and managing director of the quality assurance practice for customer experience management firm LRA Worldwide. "Whimsical brands may come and go, but W makes the effort to continually reinvent itself, and it's very consistent in terms of quality of product."

Behind W and Marriott, Loews Hotels and Hyatt Hotels and Resorts tied for fourth place overall in the upscale category. They were followed by yet another Starwood/Marriott tie, between the Le Meridien and Renaissance brands.

In the United States, the upscale tier is expected to continue an above average performance this year. PricewaterhouseCoopers' 2007 U.S. Lodging Industry Report and Forecast, which differentiates between upscale and upper upscale tiers, forecast a 5.8 percent growth in upper upscale rates and a 6.2 percent increase in upscale rates this year, higher than the overall average of 5.6 percent. In terms of revenue per available room, PwC said the upper upscale tier would increase by 5.6 percent this year, while the upscale tier would increase by 5.1 percent, the same rate forecast for the overall United States lodging industry.

PricewaterhouseCoopers also expects supply growth to be above average in both tiers this year: 4 percent in upscale and 2.1 percent in upper upscale, higher than both the U.S. average of 2 percent and the growth rates of both tiers in 2007. W Hotels, for example, is expanding its presence in such U.S. markets as Minneapolis, Atlanta, Washington, D.C., Austin, Hollywood and downtown New York.

Marriott's Semmler also expected JW Marriott to double its number of properties over the next few years, particularly in such budding international markets as India. Marriott also is adding new properties domestically, including in Phoenix, San Antonio and downtown Los Angeles, he said.