Interview: Loews Hotels CEO Paul Whetsell

Former Virgin Hotels executive director Paul Whetsell in January became CEO of Loews Hotels, a luxury chain of 17 properties in the United States and Canada. Whetsell recently spoke to Business Travel News lodging editor Michael B. Baker about his plans for Loews and the company's strategy to draw more corporate transient travel.

What are your top priorities in this position?

We want to expand our customer base. To do that, we need to fill in some of the distribution gaps that we have at Loews. We're not in Boston; we're not in Chicago or San Francisco. One of our primary objectives is to find hotels that we can acquire in those markets. We also want to reach out to a broader customer base with our existing hotels. Loews has basically been one of the top group hotels in the industry. We want to do an outreach to the corporate community more aggressively. We want Loews to be the hotel of choice for the corporate traveler just like it is for the group traveler.

What will that corporate outreach entail?

When we reach out to the business community, we need to change some of the offerings a little bit. In our public space, we normally set aside areas for our group customers when they break out of one of their meetings, and when they're not going into a breakout, we have space for them to have private meetings. Whereas for the business traveler, we'd like to provide some space where they can plug in their computer or put their iPad down and do some of their work. Perhaps some of the offerings we have in the guest room would change. We're looking at how we handle check-ins. When you have a group customer coming as part of a block, they want to know where the meetings, breakouts and luncheons are, versus the corporate traveler, who has flown from Los Angeles into New York and wants to get to his room as quickly as possible. He's going to check out the next morning, so he just wants to be sure everything's working. It's subtle, and it's not that we don't do that today. We want to make sure that when we're making that guest contact that we are accommodating our business travelers as well as our group travelers.

How will you be working with travel buyers?

We have a pretty extensive internal sales staff. Something that we've done pretty well on the group side is a group advisory board that meets with us a couple of times a year. These are some of the biggest meeting planners in the industry. We sit down with them, ask what we're doing well and what we could be doing better and see what their needs are going forward. In the last couple of years on the group side, for example, the industry felt a lot of pressure to reduce travel costs. They still wanted to have meetings, but they were going to cut down the number of meal functions from four to three, and the coffee breaks and the afternoon breaks won't be quite as elaborate. Now that the group business is picking back up, we're seeing some of those meal functions restored, so we need to adapt again. We haven't been doing that as closely with the corporate travelers. What are they looking for? We know one thing they're going to ask for is free Wi-Fi, and that's something we might look at, but we want to listen to them and touch them a little more and get more feedback from them and become a little more progressive on the offerings Loews has for corporate travelers.

You said the meetings business is picking up. Do you expect that to continue throughout this year?

You hear a lot about uncertainty: not political uncertainty, but the uncertainty of what's happening overall in the economy. People, when they're uncertain, pull in the reins a little bit. Discretionary items get hit first: research and development, capital expenditures, marketing, advertising, training and travel, for some people. It's much easier to cut back your meetings than it is to lay off people. We may not like where the economy is today. It seems that it's very slow growth, but it's growth nonetheless. It's been a little more predictable, with 1.5 to 2.5 percent GDP growth. We're seeing more capital expenditures, more R&D and training, and more meetings are starting to be restored. They have a little more clarity. The future is not quite as foggy as it was, so they can plan those meetings. We've also seen nice pickup on the food and beverage side and ancillary services.

Will your growth largely be through new builds or acquisition?

We want to fill those distribution gaps, and the preferred route is to acquire. I still believe you can acquire at a discount to replacement costs, but there are certain markets where it's very difficult to find the right opportunity. In cases when somebody presents to us a particularly attractive development project, we will look at that. But if I had to give an example, if we were looking at 10 deals, I'd rather have eight be acquisitions and two be developments.

Is part of that because financing for development remains difficult?

I have a very aggressive plan to grow this company. Development projects in the major markets where we want to be can take three to five years to get from the planning stage to opening. That's time. It's much quicker on the acquisition front.

Do you plan to expand Loews' presence outside of North America?

For sure. The gaps we have in North America are no-brainers. When you look at where our distribution is today, we have five hotels in Florida, two on the West Coast and are looking at more out there. We can't ignore where those feeder markets are. Certainly Europe and Asia are targets for us. Our preference would be to find portfolios of hotels or companies that we can grow a little bit faster, not one property at a time. Our focus is going to shift when we fill some of these other gaps. We're opportunistic.