Interview: Loews Hotels President And CEO Paul Whetsell

Los Angeles - Two years into his position, Loews Hotels president and CEO Paul Whetsell is ready for what he calls a "stabilizing" year. During that time, the upper upscale hotel company has invested about $250 million in renovations and technology upgrades across its portfolio and added locations in a few U.S. gateway cities. Whetsell said he also "made a lot of changes those first two years on the operating and marketing front, and now it's more or less time to let them take root." Speaking with Business Travel News lodging editor Michael B. Baker at the Americas Lodging Investment Conference here in late January, Whetsell talked about Loews' plans for 2014 as well as its recent decision to make basic Wi-Fi a free amenity across all its hotels.

What sort of year are you expecting?

We're going to have a very good year. January turned out to be good for us. If we can keep that up, the industry is supposed to do a 6 percent to 7 percent [increase in 2014 revenue per available room year over year], and we're going to do a bit better than that because we're coming off of a big renovation year. When you can get that, which is almost three times the rate of inflation, you should make money. Unless some external event happens, I think we have a good three to five years left in the cycle.

What's happening with development at Loews?

We have two hotels that we're building: one in Chicago and one in Orlando. Chicago is a 400-room hotel that's going to be very nice, 52 stories with 400 luxury rentals on the top, which we won't own. In Orlando, we're having 1,800 rooms. We bought in Washington, Boston and Los Angeles, and within this quarter, we'll announce two or three more deals in our pipeline coming up. We've basically covered our major gateway cities. We're a little more focused on what I call major markets now: Seattle, Portland, Dallas, Houston and Minneapolis. These are all good markets to support a Loews. Four out of five hotels that we bring in our system will be existing, but we will have one or two in our pipeline that we're building along the way. We're fortunate to have a good balance sheet where we're able to do that. Then, we'll turn our attention a little more international as we fill in the holes here, but we have a lot of growth domestically to do.

What drove the decision to offer free Wi-Fi across your system?

We're not as big as some of the other brands—we have 21 hotels—so, we're really trying two things. One is to build up better loyalty within our system. A lot of people know our hotels individually. They'll come up to me and say the Loews Miami is one of their favorite hotels, but that doesn't necessarily mean they think of the Loews Boston. The second is that we're trying to attract a much broader customer base through digital marketing, e-commerce and social media. We were one of the first brands to allow people to make reservations through Twitter. My belief is that we're not that big of a trendsetter with the free Wi-Fi, because everyone is going to have to do it. We do have a premium, higher speed, if someone is downloading 100 files and wants it done in 30 minutes instead of two and a half hours. But if you just want to check your email, it's just a matter of time before everybody [offers] that [for free].

What are some of the challenges on the distribution side?

It's difficult to keep up with all the new channels of distribution, all the different vehicles you have to monitor today, so we're making an effort to step up our game here. At our annual internal meeting for general managers and directors of sales and marketing, we had Google and TripAdvisor, and it was eye-opening. The person from Google was showing us how they map their customer from the time they start thinking about a hotel stay until they actually book it and how many different websites they may go to, and we have to be ready on every one of those sites to tell our story. It's time-consuming, it's costly and it's complicated. Our head of social media [Piper Stevens] came out of Godiva Chocolate, and she's adapted.

What else do you have planned for this year?

We've upgraded our product, put $250 million into our hotels, and we've upgraded our technology, which allows us to do the free Wi-Fi. The next one on our list is really taking a look at the in-room entertainment. The pay-per-view model is rapidly changing. People come in today and have their own computer and can stream Netflix. We just changed our standard in our hotel. Everything new has to be a 47-inch smart TV.