Hotels Surrounding O'Hare Airport Focus On Mtgs. Biz

The Chicago Department of Aviation's recent efforts to acquire 433 acres of land adjoining O'Hare International Airport to allow for future expansion has cast a spotlight on the extensive hotel inventory located around the world's busiest airport. With only one hotel—an 858-room, full service Hilton—actually on the terminal grounds, the other 30 hotels that define themselves as O'Hare airport properties are based mostly in the nearby village of Rosemont.

The drop in air travel has forced Rosemont hotels, like their counterparts at other major U.S. city airports, to seek out other sources of business. In Rosemont's case, this has meant adjusting the transient-group mix to go after more meetings business, a logical choice since Rosemont already is home to the 840,000-sq.-ft. Donald Stephens Convention Center, one of the country's largest.

Travel buyers typically include airport properties in their hotel programs to supplement downtown hotels. Given the profile of the Rosemont Chicago submarket, however, buyers might have sufficient meetings, as well as transient demand, coming into the destination to warrant a special request for proposals for Rosemont hotels, distinct from their downtown Chicago RFPs. Rosemont properties range from a 1,100-room Hyatt Regency convention hotel to such midprice and economy entries as a 122-room Holiday Inn, 142-room Best Western and 150-room Hampton Inn. Considering the full service hotels have more meetings space, they are better situated to take advantage of Rosemont's strength as a group destination.

"We see ourselves as a market totally separate from downtown," said Alan Fabrius, director of sales and marketing at the 525-room Westin O'Hare. "In our case, we don't derive too much business from the convention center because there are other hotels closer. Yet, we have 40,000 square feet of our own meeting space, which is a good space-rooms ratio. Consequently, most of the groups we host both meet and stay with us."

Despite the downturn in airport-centered business travel, Fabrius said the Westin's objective hadn't changed. "Even though the pie may be smaller, you still want a larger portion than your competitive set is getting," he said. "In other words, the goal has become more about increasing an account's marketshare than about absolute room nights."

While 60 percent of the Westin's business is group, 40 percent is still transient. In the transient segment, the down market has resulted in a shift away from business travel bookings at the published rate toward bookings at discounted negotiated rates. "In this economy, it's inevitable that we'd look more toward national or local accounts, especially when a number of large companies are either based in Rosemont or have regional headquarters here," Fabrius said.

By comparison, the Hyatt Regency O'Hare derives a significant amount of bookings from the Stephens center. "An interior walkway connects the two, so this makes a lot of sense," said Richard Morgan, the Hyatt's managing director. "In this regard, we're a little different from a typical airport hotel in the same way Rosemont differs from a typical airport town."

The percentage of the Hyatt's bookings that are group runs as high as 80 percent. Yet, groups meeting in the property's own 100,000 square feet of space account for the majority of this. Morgan noted that a group booking at one local hotel could be a transient booking at another. "Our transient business often is somebody else's group business, given that the other hotel might be full on a certain night," he said.

As in other markets, the booking window for Rosemont hotels has narrowed. "For transient bookings, we used to book about four weeks to six weeks out, but it definitely has become more of a three-week window," said Amy Hansen, reservations manager at the 296-suite Embassy Suites, which is part of Hilton Hotels Corp. "Similarly on the group side, we're seeing a lot more last-minute business than we saw previously. Bookings often come in the month for the month."

In addition to 10,000 square feet of dedicated meetings space, the Embassy Suites has 22 conference suites in its inventory, each accommodating up to six people. "These are outfitted with a conference table in the parlor area in place of a couch and, even in this economy, are used by companies for recruiting purposes," said Laurel Rhoads McCarthy, director of sales. "Sometimes a company even will take over the entire floor of 22 suites." Recruiting aside, many of the meetings Rhoades McCarthy books are what she called, "fly-in meetings. People are under budget pressure, plus they have so many time restraints that they'll fly into O'Hare in the morning, arrive at the hotel, meet all day and then fly out in the evening," she added.

For buyers considering a separate Rosemont RFP, these hotel managers disagreed on whether Rosemont, in fact, was a cost-effective alternative to downtown Chicago. "Generally, rates are better in this area," Rhoads McCarthy said.

Yet, the choice typically isn't a pricing decision, according to Westin's Fabrius. "If people want to be downtown, that's where they're going to be. Similarly, if they need close access to O'Hare, that's the determining factor. In fact, there have been times when they're offering a lower price than we are," he said.

However, there are other ancillary costs to be factored in. "There may not be a significant differential in room rate, but buyers save a lot of money vis-à-vis transportation costs, coming here to start with," Hyatt's Morgan said.

Downtown hotels confirmed they also view the two markets separately. "Our competition is strictly downtown," said Ian Nicholson, general manager of the 454-room Hotel 71, which opened last year overlooking the Chicago River on East Wacker Drive. "Rosemont can be a 40-minute taxi ride away, so it's a bit of a distance. It's its own hotel community."