Four Seasons Solidifies Its Hold As Asians Stumble
<B> Four Seasons Solidifies Its Hold As Asians Stumble</B>
By Maria P. Vallejo
Four Seasons/Regent Hotels and Resorts topped the deluxe category again this year as some Asian-based hotel companies shifted places and a new brand gained recognition.
Sweeping eight categories compared with six last year, Four Seasons Hotel & Resorts held onto its first place standing, solidifying its position against Ritz-Carlton Hotel Co., which took second place, winning six categories.
Despite the close finish, the Four Seasons win came as no surprise to travel and meeting buyers. The Toronto-based company maintained its position by emphasizing its focus on the corporate market and enforcing an individualistic style for each of its properties. Analysts also surmised that Ritz-Carlton's loss of four properties, in Aspen, Colo., Houston, New York and Washington, D.C., also contributed to the Four Seasons win.
Four Seasons last year added three new salespeople to its worldwide sales office and charged them with catering to the needs of North American travel managers and agents. At the same time, it shifted its most experienced salespeople in its largest markets, such as New York, to a new focus on corporate travel buyers in their local areas.
"We felt we had placed too much emphasis on the group market and not enough on the corporate market," said vice president of sales David Crowl. "It was a realization that if Four Seasons wanted to take the market seriously, it needed to put more resources against it."
The strategy seems to have paid off, as Four Seasons won the "ease in arranging individual travel" category.
Corporate transient travelers comprise more than 70 percent of Four Seasons' business, and over the past five years the company has focused on a series of changes and enhancements to better meet the unique needs of this market. It increased staffing and developed databases and software to better capture information about its largest and best customers.
A focus on providing more individualized service to buyers also helped Four Seasons win the corporate rate program category. While some buyers may be accustomed to being offered a standardized corporate program by hotel partners, Four Seasons deviates from the norm to create individualized negotiated-rate programs predicated on each customer's unique needs, Crowl said.
On the group side, Four Seasons for some time has had a minimum standard of responding to all clients within two hours. Sales and operations people working in the group business also are trained to be flexible and work with clients to create a personalized experience for both the meeting planner and the attendee.
"We've spent time, money and energy to focus on customer needs," Crowl said. "That trickles down to the operation side that has to learn to think outside of the box to fulfill those needs. We do not expect the client to adapt to us."
From arranging food and beverage menus for groups to coordinating meeting themes, Four Seasons officials said, they assess each group's needs and create a plan for them from scratch.
For travel agents, the chain's commission payment policy remains strict: North American travel agents get commissions within 72 hours, and exception reports are created and tracked to determine which hotels are not maintaining the standard. International travel companies that prefer to receive their payments in local currencies may wait several more days before receiving their commissions.
Beyond its interaction with buyers, Four Seasons also won the overall deluxe category for its distinct property designs, each of which incorporates elements and styles indigenous to its location. This feature became a powerful advantage for the company against its competitors this year.
"The consistency of the Ritz-Carlton was an advantage for a while, but people got tired of it," said a New York-based analyst of the Ritz hotel and guestroom design. "Every Ritz-Carlton stay is great, but the same. The Four Seasons continues to make improvements and creative deals with local customers, and that's playing more as a favorite than the Ritz-Carlton."
Four Seasons, which used an advisory board to provide feedback on its resort property designs, took both the physical appearance and resort meetings facilities categories. A similar board helped in the design of downtown hotels, where this year it won the meetings facilities category.
The resort hotel advisory board consists of 11 people, including representatives of incentive houses, corporate meeting planners and insurance planners. Board members are provided with blueprints, models and renderings to critique and help redesign Four Seasons properties. As a final thank-you, they are invited on a familiarization trip where they help place the finishing touches on the property.
Four or five different design companies and architectural firms work with Four Seasons officials to develop new hotels and create a design that fits each location.
"Four Seasons is responsible for what our hotels look like," Crowl said, "and we are very responsible to the environment. It's important when someone walks through a facility that it complements the environment."
Holding onto second place, and no doubt keeping its eye on first, Ritz-Carlton also is planning to increase its sales teams at individual properties to work specifically on corporate accounts, said James Schultenover, vice president of sales and marketing for the Atlanta-based chain. A year ago, Ritz-Carlton implemented CLASS, an integrated guest history system, to better track the preferences of its repeat guests.
In the past year, the company spent much of its funds, energy and focus on improving the quality of business amenities inside its guestrooms and business centers as well as its employee services. It also launched the Care program, under which hotel rooms are renovated every 90 days. Currently rolled out to 70 percent of properties in the chain, Care is scheduled for full chainwide rollout by year-end.
Business technology is another area Ritz-Carlton has been addressing. Since the beginning of the year, several locations have been beta testing a "technology butler," charged with aiding guests with their technological needs. The company will begin evaluating the results of the program in the next few months and consider chainwide deployment at that time.
The greatest surprise in the deluxe category to analysts and some travel buyers is the rise of the Luxury Collection/St. Regis into third place, up two spots from last year.
"Without the Sheraton name, the most noticeable name, it's interesting that the Luxury Collection/St. Regis already has generated a perception," said Robert Mandelbaum, director of research at New York's PKF Consulting. "St. Regis is a brand that's made instant recognition since splitting off. The other names are known within the deluxe category; Four Seasons and Ritz-Carlton are strongly defined luxury brand names."
Indeed, some analysts said that including Sheraton as part of the Luxury Collection's name, as it did in the past, hindered the brand, and dropping it helped bring the Collection to a third place showing. The St. Regis name already was established among luxury hotel connoisseurs, despite its having only one property when the brand was launched.
Anxious to keep the momentum going, the Luxury Collection/St. Regis will train its focus on corporate transient and group buyers this year. "Our first priority was to deal with travel agents, and we've done a very good job of telling them to book our products. Perhaps we also need to get that message to the consumer. We need to focus on meeting planners and travel mangers," said Doug McKenzie, Starwood's vice president and luxury brand manager.
The collection, like the Starwood chain as a whole, plans to expand its portfolio to include more North American hotels. At the same time, each hotel will focus on maintaining and improving vital business technologies in guest and meeting rooms.
<CENTER><B>Asian Chains Fight Back</B></CENTER>
Of the remaining slots in the survey, three are filled by Asian-based hotel companies. The movement of Shangri-La Hotels & Resorts into fourth place in the category this year proved the Hong Kong-based company's strength in the market, pushed down Mandarin Oriental and helped bump the Peninsula Group into seventh place, from third last year.
This movement might be attributable to the strengths of its competitors and the inclusion of a new hotel rival in the segment. But experts blamed the Asian financial crisis (see story, page 44), misconceptions of its impact on the continent and the shifting service preferences of travel buyers.
While some analysts suggested that travel buyers prefer the friendlier service of U.S. deluxe hotels, Shangri-La is among the Asian companies that have mastered both the Eastern and Western styles. "Business travelers want personal service. They like to be remembered, addressed by their name and greeted with a smile," said senior marketing vice president Robert Hutchinson.
Shangri-La staffing, though, maintains the Asian style. "The key to being successful in the deluxe category is personal service," Mandelbaum said. "The Asian hotels have one-to-one staffing-to-room ratios that adds to that personal experience."
Shangri-La's meeting buyers applaud its efforts to bring service to the group market as well. In addition to good rates, said Patty Danielecki, who plans about 50 meetings a year for Bristol-Meyers Squibb, the chain "has a deluxe package for meetings that includes everything. It is bringing value to clients and makes my job a lot easier by bundling everything in one package."
Despite the economic problems of Asia, Shangri-La plans in the next six months to open hotels in Beijing, Harbin and Wuhan. A continual renovation plan is underway for its 36 hotels and resorts, with the largest renovation currently taking place at the Shangri-La Singapore, where changes are being made to the tower wing, lobby and restaurants. "We are very fortunate to have owners who understand the importance of maintaining and upgrading facilities," Hutchinson said.
Meanwhile, the Hong Kong-based Peninsula Group found its limited number of properties to be a marketing difficulty in the past few years. With only eight properties in Asia and the United States, it is finding corporate clients by focusing on transient business travelers, said sales and marketing manager David Katemopoulos.
On the technology front, the company's R&D group consistently creates new in-room technologies to woo the global road warrior. The Kowloon Hotel was one of the first high-tech hotels in Asia, providing Internet e-mail in all of its guest- rooms. It also boasts hand-free telephones in the bathrooms, a world clock that defaults to the guest's home time and silent fax machines. Every room on the property is considered a business class room.
"Demand is for updates in in-room technologies, in response to the changes in technology that govern the corporate world," said Katemopoulos. "The laptop computer and e-mail have revolutionized the way executives do business. The hospitality industry must understand the changes and the roles they play in the executive's life, and anticipate his future needs.