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Lodging 2012 Hotel Survey

Pricier Upper Upscale Brands Outscore Legacy Brands; Hilton Brands Take Upscale Tier

By Michael B. Baker / September 12, 2012 / Contact Reporter
Business Travel News on X

Although they have a fraction of the distribution of their big-box brethren, Starwood's W and Marriott's JW Marriott outscored the legacy brands in the upper upscale tier of BTN's 2012 Hotel Chain Survey. Two Hilton Worldwide brands, meanwhile, largely dominated a competitive upscale tier.

[Please click here to view the digital edition of the 2012 Hotel Chain Survey, featuring all charted data, downloadable as a pdf.]

W Hotels edged out last year's top brand JW Marriott by a hundredth of a point, a considerable improvement from its seventh-place finish in 2011. Buyers gave W top scores for its sales staff, food, physical appearance and business amenities. Perennially a top performer in the survey, JW Marriott was the top brand for consistency, hotel staff and business center.

The brands are similar, both straddling a line in terms of rates and amenities somewhere between traditional upper upscale brands and luxury brands. Smith Travel Research, for example, defines both as luxury brands. Both also have about 50 hotels spread around the world, about a tenth of the number of Hyatts, Marriotts or Hiltons.

The upper upscale segment this year overall has been a strong performer, with U.S. occupancy remaining above 70 percent and the average rate up 4.3 percent year over year through July, according to STR.

Although W launched in 1998 and is among the newest of the brands in its tier, Starwood currently is renovating much of the North American portfolio. This includes investment of more than $100 million across about a dozen hotels. The W New York at Union Square, for example, recently renovated all 270 guest rooms, and the W Chicago by next year will have renovated its restaurants, lobby and meeting space.

"We're quite busy keeping the brand fresh," according to W global brand leader Vincent Gillet. "Looking fabulous takes time."

JW Marriott vice president and global brand manager Mitzi Gaskins said her brand's top score for staff stems from service initiatives launched during the past few years—including daily staff rehearsals to cement service standards. The brand plans to introduce a more intense training program for staff next year, she added.

"We're all about providing our guests everything they need then getting out of their way," Gaskins continued. "It's about being intuitive as to when a guest wants service, knowing when you are needed and when you are not."

First launched in 1984, JW Marriott enhanced its amenities through partnerships with such companies as U.K.-based spa brand Aromatherapy Associates (for bathroom products) and Christie's for art collections, she said.

Considering the cost premium above most of their competitors, corporate rate programs unsurprisingly was the weakest area in the survey for both W and JW Marriott. InterContinental—which was the third-highest rated upper upscale brand overall—and Hilton tied for the top score for corporate rate programs.

IHG Americas vice president of brand delivery Gina LaBarre said the brand has made inroads with buyers, particularly those who plan events through its "Insider Collection" program, in which hotels work with planners to include events specific to a hotel's location. The brand also has launched a concierge program that provides local market information and videos on its website and through a mobile app.

Meanwhile, buyers rated Marriott's boutique-style Renaissance brand as the best value for its price in the upper upscale tier.

Upper upscale supply growth in the United States this year nearly has been nonexistent, rising year over year by 0.1 percent during the first seven months of 2012, according to STR.

JW Marriott during the previous few years, for example, had opened properties in Chicago, Los Angeles, Miami and San Antonio. In August it announced plans to take over Jumeriah's Essex House in New York, giving the brand its first Manhattan property.

But brands largely are looking overseas for development opportunities. JW Marriott is close to opening new properties in Dubai, Hanoi and India. W opened earlier this year in Paris and has imminent openings in Singapore, Bangkok, Milan and Guangzhou.

"Our pipeline is healthy, but we're not opening too many hotels," Gillet said. "We want to make sure we're in the right locations and that it opens hot."

Hiltons Top Upscale

In the upscale tier, buyers gave the highest marks to Hilton's Embassy Suites, followed by Hilton's Doubletree brand. IHG's Crowne Plaza, which had been the top upscale brand in the previous two BTN surveys, slipped to third. Two hundredths of a point separated the top three brands.

Buyers deemed Embassy Suites as the most consistent of the upscale brands and as providing the best value for its prices. They also gave both it and Doubletree the highest marks for physical appearance.

Embassy Suites vice president of brand performance support Shawn McAteer said the 27-year-old brand secured high scores in product quality criteria because of recent capital improvements at several properties. About 20 percent of Embassy Suites portfolio currently is in some stage of a product improvement cycle, he said. The brand recently opened several new hotels in major urban markets, including Denver, St. Louis, Houston and San Antonio.

Unlike most other brands in the upscale and upper upscale tiers, Embassy Suites has an active pipeline within the United States; as many as 15 new deals are expected to be signed by the end of this year, McAteer said. Embassy Suites a few years ago developed a more flexible prototype, which has facilitated much of its urban expansion.

"As corporate travel buyers work with our brand, this has brought us a lot of awareness," McAteer said. "When we talk to that community, space is important, and having a separate area where you sleep from where you work also has a lot of relevance."

McAteer attributed Embassy Suites' high score in price/value relationship to being "the most bundled offering in our category. No matter which hotel you go to, you will get a suite, complimentary breakfasts and fitness centers. Those pillars never vary."

Doubletree achieved top marks for arranging group travel, meetings facilities, corporate rate programs, staff and in-room amenities. Making consistent such amenities as bedding, fitness centers, Wolfgang Puck coffee products and Crabtree & Evelyn bathroom items has been a priority during the past few years, said Doubletree global brand head Rob Palleschi.

The brand's score for staff is indicative of a recently introduced iPad training program, in which employees can go through quick training vignettes followed by a brief quiz, Palleschi explained. "All that focus on execution and training has helped us move forward," he said. "It's definitely improved our occupancy, rates and loyalty scores."

Doubletree also is growing quickly, having opened 40 hotels last year and expecting to open 50 more by year-end, Palleschi said. Much of the growth is in the Asia/Pacific region, the United Kingdom and Continental Europe.

Crowne Plaza recently has embarked on a repositioning project  and currently is freshening up individual properties as it works to develop a new identity. To make that determination, parent IHG is meeting with individual owners to identify areas for improvement.

"We're looking at how to drive performance and differentiation from both a product and service perspective," LaBarre said. "We'll be done with that phase by the middle of next year."

This report originally appeared in the Sept. 10, 2012, issue of Business Travel News.

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