One-on-One With K Hotels CEO Michael Palmer: Connecting Corporate Buyers, Independent Hotels
Michael Palmer, CEO of Los Angeles-based K Hotels, recently spoke with Business Travel News senior associate editor Michael B. Baker about the independent hotel collection's role in corporate travel negotiations, outlook and growth strategy.
Business Travel News: How are you able to facilitate corporate business?
Michael Palmer: We encourage our hotels and work with them to contact corporations directly. That's the preferred way to go. It becomes less confusing when you can deal direct, so we put our independent hotels directly in contact with corporations to facilitate their needs. It also gives the hotels, in cases where corporations have multiple needs in multiple cities, the ability to participate in programs that they otherwise wouldn't be able to do because corporations can't deal with individual hotels around the world, but K allows these hotels to become part of this corporate demand.
BTN: What are some advantages to independent hotels for corporate purposes?
Palmer: Your well-known luxury five-star properties automatically are identified in that category. Although many of our independent hotels might be five-star, they may not sell themselves as that for this group business and they may not market themselves that way. A good example is the Ring Hotel in Vienna, a five-star business hotel, and they tend to downplay that and go after that four-star business.
BTN: What are your plans for growth?
Palmer: Our primary objective is to fill out the gateway cities, where most of the business goes. We'll also be releasing shortly a new version of the website, through which you can find your property both by location or experience, for example, spa or golf. You'll be able to identify properties in multiple categories under this scenario. Later in the year, we'll have our loyalty program so our member hotels will be able to build some loyalty with their guests.
BTN: What trend lines are you seeing with group travel at your hotels?
Palmer: Group travel is still alive and thriving, though many companies are downsizing. It hasn't stopped corporations from incentive travel. Now more than any time, it's important for corporations to give their employees something to strive for. Even though the block room numbers may have decreased, there's still a big value in that segment. Although we're seeing the lead times for bookings and securing group events have decreased, the destination options have increased.
BTN: Do any markets seem to be rebounding faster than others?
Palmer: In New York and Florida, in particular, I've noticed big increases for our members. I see increases in most markets. Leisure travel is up, though not dramatically yet.
BTN: Do you expect these to continue?
Palmer: It's tied to the economics here in the United States and Europe. If the economy continues to improve, which it has been doing, I see the hospitality and leisure travel and corporate tied in this direct correlation.
BTN: What is the range of hotels that you represent?
Palmer: The largest is the Treasure Island in Las Vegas, with 3,000-plus rooms, down to smaller hotels with 20-plus rooms, like in Costa Rica. They vary in size. The key element is they're independent, and independent hotels don't have that brand recognition, so K brings some brand recognition to these independent hotels. We can bring them into the eyes of the consumer. At the beginning of this year, we formed a joint venture with a large group of independent hotels in Europe, JJW Hotels, which represents about 60 hotels throughout Europe, and we represent about 50 hotels in the United States. Between us, we formed a strong joint venture to bring independent hotels to the forefront of the travel industry in every way possible: corporate, consumer, travel agent and working with our great PR firm. It's been a very good start to this year.