Airport Hotels Raise Prices As Their Popularity Grows
<B> Airport Hotels Raise Prices As Their Popularity Grows</B>
By Barbara Cook
Major hotel companies that operate airport properties report a surge in their meetings business line, as corporate planners take advantage of the ability to produce quick-turn conferences, lasting no more than two days, at these convenient locations. Especially growing in popularity is the small meeting, with 50 attendees or less.
But from the corporate perspective, the convenience of using airport locations is being offset by the hard line they are taking when it comes to negotiating.
From the planner's perspective, airport properties offer multiple advantages over downtown locations for certain types of meetings. Use of a central geographical destination with good air access simplifies the transportation problem, while the need for arrangements outside the hotel is kept to a minimum.
But planners are saying that their very popularity is giving these fast in-and-out sites an extra ace in a negotiating environment already stacked in their favor.
"Prices at airport hotels are skyrocketing," said Stephen Clark, assistant vice president of conference and travel services for CUNA Mutual Group in Madison, Wis. "They used to be easy to deal with, but now they're demanding. They are the most difficult to deal with because they don't need to deal. They give you the rate and you take it or leave it."
Hyatt vice president of sales Fred Shea acknowledged that the airport hotel's ability to respond quickly to meeting planners, plus provide them with the full services associated with a downtown hotel, makes "deals harder to get these days." Although in some cases hotels may offer their better customers a cocktail reception, "You don't see a lot of that," he noted.
Hyatt has 14 airport hotels and has broken ground on a planned 206-room hotel in Rosemont, Ill., to serve Chicago O'Hare. That property will come on line in the spring of 2000.
"The trends are good and business is strong," Shea said. "The bulk of the meetings business is small meetings at airports, but we are getting more of the larger corporate groups that are having new product launches." These new product launches operate on a 90-day booking cycle, Shea said, and are designed to offer sales training. "They bring their people to the airport because they can get in quickly, concentrate on the meeting and return home," he added.
Fully 50 percent of Hyatt's business at airport hotels comes from the meetings industry. Dallas Fort Worth, San Francisco and Chicago are particularly strong airport hotel markets, Shea said. He noted that the popularity of Chicago and DFW is due to their central locations and easy accessibility from anywhere in the country.
San Francisco enters the picture because the downtown market is tight, it's easier to use the airport as an alternative and the San Francisco Airport Hilton "has good meeting space," Shea said.
For the future, Shea projected that airport hotel meeting space will be driven by corporate demand to become even more technology-oriented, including Internet access and the availability of high quality telecommunications.
Officials of Wyndham Hotels also are noticing an "uplift" in bookings at airport properties, plus a boost in the number of small meetings being held there. Wyndham offers a large number of garden hotels at airports, but has some larger properties as well. The garden hotels--full service, four-star properties that cater to business travelers--currently earn about 20 percent of their revenue from corporate meetings.
Wyndham has two new larger hotels, not garden properties, coming on line at airports. One at Miami International will open this fall and another one is under development at Tampa West Shore at Tampa International.
Marriott International's 22 airport properties' meeting space range from 6,000 to 20,000 square feet, the latter being enough room to house more than 900 meeting delegates.
"We are at most major airports," said Susan Hodapp, Marriott's hotel brand director, noting that corporate meeting buyers increasingly need flexibility from the hotel staff to make spur-of-the-moment changes in plans. "Many times, because of the speed of these meetings (two days maximum), the hotel staff has to run alongside the meeting planner."
Hodapp said that meeting planners still can negotiate price at airport hotels if they are willing to adapt their schedule to the hotel's booking patterns. For example, she said, starting the meeting on a Monday allows for greater price flexibility on rooms, a factor that could offset the overall cost of the meeting. It's companies that require a middle-of-the-week schedule that face less flexibility in negotiations, she said.
John Onorio, vice president and brand manager for Clarion Hotels, reflected that the current popularity of airport hotels for "blitz meetings" has added new importance to this segment of the market.
"There's a new appreciation and value that is being placed on airport hotels that can host meetings," he said. "Whenever you have to ask an individual to go to a mid-town location in mid-afternoon, it becomes a choice between that and an airport location. There seems to be a movement toward small, quick, in-and-out meetings at airport hotels."
As a result, Onorio said, airport hotels "are not the low-end things they started out to be years ago when we weren't as advanced in sound abatement."
Clarion offers special discounts to try to keep meeting attendees at the airport hotel on Friday evenings, but this is largely attractive only if the delegate's spouse is along and the destination is a popular one, Onorio said.
Airport hotels also are noticing that A/V requirements are becoming more sophisticated as a general rule, Onorio said. Panners generally require that the hotel offer at least teleconferencing to allow the group to communicate with the home office. Videoconferencing facilities haven't become an issue, yet, Onorio, though he predicted "that is coming."
Given the climate, he said, "We don't have to make deals. But the hotels have to deliver the goods.