<B> Hotels Ready For Euros</B>
<I>Bass, Hyatt, Marriott and Patriot Already Compliant</I>
By Maria P. Vallejo
When the euro rolled out last month, international hotel buyers and vendors hoped the new currency would bring easier negotiations, better group deals and stronger pan-European hotel companies. Corporations like Bass Hotels and Resorts, Hyatt International, Marriott International and Patriot American Hospitality have been busy making their European divisions euro-compliant and preparing for an expected onslaught of euro requests from customers.
"Most companies are very ready," said Stuart Hill, the Hotel Electronic Distribution Network Association's representative for Europe, the Middle East and Africa. "Hotel companies in Europe have not felt the effects yet, but they will find their corporate clients are demanding that they be able to offer the euro. International companies and buyers based in Euroland are requesting rates be quoted in euros."
Insiders said the euro's rollout will result in price transparencies across country borders, allowing buyers to more easily compare properties in different countries. And it will save them money by allowing them to shift business from more popular destinations to lesser-known, and less expensive, properties, which in turn will benefit from a surge of new business.
"It opens up the borders and simplifies things a bit," said Mack Koonce, who is executive vice president of marketing and strategic planning for Dallas-based Patriot American. "Hospitality by definition is not dealing with just local properties. The buying efficiency of multi-destination customers will be improved."
Agreed Eric Brun, Hyatt International's director of marketing services for Europe and the Middle East, "It's going to push people to travel more and the transparency of prices will change some of their travel patterns. I think we will see a boost in destinations. For groups and conferences, it will move things."
Hoteliers acknowledged that the effects will be most noted for group rather than transient travel, as the destination of business travelers is set by the location of their offices and clients. But some also noted that the euro will reduce conversion costs and open opportunities for hotel development, offering more supply to all customers.
"It lowers the cost of foreign currency conversion and will provide an economic stimulus for greater investment, lowering the cost of investment capital and opening markets up," said Marriott International senior vice president of finance Gary Rosenthal. "That's good for business and capital creation. And what's good for business is good for the hospitality industry."
The euro also will encourage more regional-European negotiations, said Koonce. "The common currency creates opportunities for pan-European projects, so there will be a lot less branded and country-by-country companies. It will make pan-European brands more relevant, though that's going to take several years to fully impact the business."
In preparation for the switch, Hyatt International launched a dual currency system in the first week of January, enabling its Spirit reservation system to quote rates and provide portfolio information in both euros and local currencies.
In a study of 250 European travel buyers in France, Germany, Italy, Spain and the United Kingdom last spring, Hyatt found that most companies plan to convert their financial systems to the euro and expect their suppliers also to comply, Brun said. Seventy percent of the respondents were Hyatt corporate customers and 30 percent were travel agents and incentive houses. Half said they planned to conduct business in both the local currency and the euro by January 1999, while 24 percent planned to use only the local currency and 26 percent will work in local currencies and the U.S. dollar.
Marriott began preparing for the change more than a year ago, developing a euro task force and project group to identify issues and company sectors that need to be addressed. Included are plans to modify Marriott's Marsha reservation system to quote rates in local and euro currencies; enhance travel agents' conversion systems; develop newsletters and training programs for front desk employees; and train sales staff. The conversion process will affect 67 hotels in the 11 Euroland countries and eventually 32 more in Greece and the United Kingdom. By the second quarter of this year, dual currency invoices will be available, Rosenthal said.
At Wyndham International, a complete rollout of euro-compliant programs was not necessary, since many of its European properties and customers are located in the United Kingdom and limited inbound business gave the company a little more leeway, said Roy Tutty, COO of the European division. The one property in Euroland, Le Manoir de Gressy in France, already is euro-ready, and all hotel systems in the United Kingdom and Europe will be by this summer. "The U.K. is not in Euroland, but our customers can come from Euroland," Tutty said. "We didn't believe we could wait."
Bass Hotels & Resorts also is preparing for clients demanding their bills in euros, despite the fact that most of its hotels are in the United Kingdom. After studying the issue for two years, Bass in September completed installation of euro-compliant software in all management systems. It also developed a compact disk training guide in English and the 11 different languages of the countries adopting the euro, and used it to train 8,000 line staffers in sales and marketing, call centers and procurement.
Ian Graham, Bass Hotels and Resorts' vice president of accounting services for Europe, the Middle East and Africa, predicted that the euro will cause "the gap between the cheapest and most expensive city to contract slightly.