Extra Space Affords All Suites An Advantage

Despite the U.S. hotel market starting to rebound after a three-year contraction, operators of all suite chains maintain that their brands' price-value equation is as compelling today for buyers as it was during the downturn. Primarily in terms of extra space, they argue, all suites have a built-in advantage over non-suite competitors.

All suite chains, however, know that their competitors are moving aggressively to build brand recognition among buyers, now that demand for business travel is returning. "We opened five hotels last year, good timing in light of the upturn in demand. Each has a different profile, which speaks to the flexibility of the all suites concept," said David Greydanus, senior vice president for brand management for Embassy Suites Hotels. "Yet, each features a true two-room suite, which is a brand standard. Each portion of the suite has a television and telephone. Plus a microwave, refrigerator and wet bar are standard in the living room portion."

While SpringHill Suites by Marriott operates in the midprice tier, the price-value equation is the same as at upscale Embassy. "We appeal to a certain target group of customers, business travelers chief among them," said Chad Waetzig, Marriott senior vice president for select service brand management. "Through our research, we found that, regardless of economic times, roughly 25 percent of travelers look for extra space in a hotel and that, therefore, suites appeal to them. In good times or bad, the value equation for a suite product is perfect for those looking for extra space."

Unlike the Embassy model, SpringHill features suites that are a single room that is 25 percent larger than a typical room in a business hotel. "By definition, the working area in the room is separate and distinct from the sleeping area, allowing guests to be productive when they're in the hotel," Waetzig said.

Business travelers use the extra space for a variety of reasons. "They're certainly more likely to conduct interviews or hold meetings in the room," Waetzig said. "Setting up a base of operations, a kind of office away from the office, has been helpful for a lot of our business travelers. At the same time, they have enough space to spread out and relax."

The value proposition around the suite remains what it always has been, said Maureen O'Hanlon, senior vice president of sales and marketing for Prime Hospitality, whose AmeriSuite brand competes against SpringHill in the midprice sector. "We've made quite a few inroads over the past two years in gaining corporate accounts. In the down economy, buyers were looking to reduce travel expenses. Even with the improving economy, they'll remain cost conscious."

Buyers who traded down from full service to midprice chains during the downturn encountered less resistance from travelers when the midprice options included an all suites alternative,.

"Travelers have less of an issue when they perceive they're getting more for their money in terms of extra space," said Gary Polito, corporate travel manager at Bose Corp. in Framingham, Mass. "They view the extra space as a kind of unexpected benefit."

Another cost saving for buyers is that breakfast at all suite brands typically has been complimentary. While free breakfast has been a hallmark of the midprice without food and beverage category, it is rare among the upscale brands Embassy Suites competes against. "The full, cooked-to-order breakfast always has been a brand standard as is the evening manager's reception and that's not going to change," Greydanus said.

"Once companies start looking at how much they spend on breakfast, including gratuities, the stronger the appeal of brands that absorb these charges into the room rate," O'Hanlon said.

Waetzig said SpringHill attracts a different customer group than Marriott's traditional midprice business hotels, namely Courtyard and Fairfield Inn. "It's a group that places more importance on enjoying themselves on a business trip. By contrast, a lot of business travelers who are Courtyard users, for example, are more focused on getting in and out of the hotel, being productive and fulfilling the purpose of the trip," he said. Travelers who opt for an all suite product, on the other hand, enjoy "being productive and getting the job done, but they also like the extra space in the room, so they can unwind at the end of the day."