Hyatt Adds Innovation, Technology To Upscale Mix
<B> Hyatt Adds Innovation, Technology To Upscale Mix</B>
While this year's upscale segment showed the greatest shifting of positions among all the segments in the Hotel Chain Survey, hotel analysts and buyers agreed that the changes were not due to falling service levels at any of the chains.
Instead, the hotel companies that leap-frogged over their competitors did so by adding a refreshing dash of innovation to their existing quality mix.
"For the brands that dropped a few rankings, it's not that they failed to do well what they did well in the past. But there are some hotel companies that are standing still and they seem to be losing shares to those companies that are growing, adding marketing and interesting messages," said analyst Bjorn Hanson, hospitality and leisure industry leader at New York's PricewaterhouseCoopers. "It seems the lack of activity is viewed negatively, while companies on the move had a favorable gain."
Analysts agreed that the three companies in the winner's circle this year--Hyatt Hotels & Resorts, Westin Hotels & Resorts, and Doubletree Guest Suites & Hotels--all focused not only on service to their existing customers, but on marketing strategies as well.
With the tables turning once again, Chicago-based Hyatt Hotels moved into first place, beating out last year's winner, Westin Hotels & Resorts. Despite not winning any single category in its segment, Hyatt's overall weighted score, based on consistently high ratings in all categories, moved it to the top of the survey.
As in the past, Hyatt's executives attributed the company's success to its private ownership, which allows it to focus on services and new programs rather than quarterly earnings.
"All public companies necessarily have something of a different focus," said president Doug Geoga. "They need to take a good deal of time managing the expectations of the investment community. We focus on the impact of steps taken on our hotels--and that focus gives us an edge as a private company."
One edge Hyatt seems committed to pursuing is in the technology arena, an increasingly important one to its corporate customer base. In one $25 million project, the chain debuted a Single Image Inventory System that can give corporate buyers direct access to all available Hyatt inventory in real time. It also upgraded its central reservation system and global distribution network, and offered customers seamless connectivity and real-time booking capability.
Even while attempting to meet the demands of corporate buyers for better and faster ways to book transient and group travel, though, Hyatt continued to provide consistent service and product.
"You can count on service across the board at all Hyatts," said Brook Sommers, corporate meeting and event planner at Storage Technology in Louisville, Colo., who uses Hyatt properties for about 500 meetings a year. "If you stay in a Hyatt in Dallas or Denver, you know they will be similar in amenities, quality of stay and meeting space."
Another customer, Nortel Network's senior manager of corporate meetings Carolyn Pund in San Jose, noted that Hyatt salespeople consistently respond to proposal requests faster than those at any other company.
"I'll send out bids to four or five major chains and get Hyatt's response that afternoon," she said. "Hyatt has the strongest system to service national salespeople, and give access to actual availability. They actually work on the whole contract, so it's like one-stop shopping."
When it comes to booking short-term corporate meetings, she said, often the first company to respond is the one that gets the business.
Hyatt also has the capability to provide direct electronic portfolio data to its corporate clients, and is working with them to bring direct links to the market. "Some want Hyatt information on the Internet and others want a direct link," said Joan Lowell, vice president of individual travel and electronic distribution.
While last year's bumpy ride down Wall Street had its publicly traded competitors concentrating on the bottom line, Hyatt focused on improvement projects, completing renovations or upgrades on more than half its properties.
At the same time, it developed a four-part strategy for strengthening its relationships with corporate buyers, including expanding its sales force, increasing its presence at trade shows, developing advertising campaigns and creating direct mailings.
Coming in fifth in the "ease in arranging individual travel" category and eighth in "ease in arranging group travel," Hyatt hopes to improve its scores by implementing voice-recognition technology to facilitate telephone bookings. It will debut the product for group bookings by midyear, Lowell said.
The system, being built in cooperation with Pegasus Systems, will allow meeting attendees to provide their name, address and guarantee information to a toll-free telephone number, and have the information transferred electronically to the individual property and Hyatt's central reservation system.
The company also plans to enhance its sales system by the third quarter to better track and report spending data.
But the big news "going on right now is a lot of creative development of corporate intranets," said Hyatt marketing vice president Tom O'Toole. "Corporations are really starting to make practical use of corporate intranets. We are able to provide prospective customers much more detail on information, allowing both travel managers and Hyatt to have more informed negotiations and relationships."
Coming in a very close second to Hyatt in the survey, Westin Hotels & Resorts of White Plains, N.Y., took two first place positions, in quality of food and quality of business amenities. Apparently, despite being folded into the Starwood Hotels & Resorts family, Westin was able to differentiate itself from its sister brand.
Indeed, some travel buyers said the consolidation of Westin and Sheraton into Starwood helped emphasize Westin's consistent service, properties and buyer interaction, even as it demonstrated some inconsistency in the Sheraton brand. "There are Sheratons that aren't close to the caliber of Westins," said Sommers of Storage Technology. "Some Sheratons are fabulous and some are horrible."
Despite changes that merged many of the companies' programs, Westin continued to offer some of its strongest programs and products last year. Small meeting planners can use Westin's One Call service, which pledges to respond within 24 hours, said brand vice president Sue Brush.
Starwood, meanwhile, has recognized the perception problem at Sheraton--which ranked eleventh in the physical appearance category this year--and is attempting to improve the image and physical layout of its hotels.
Sheraton is testing four new room design prototypes, bringing new technologies into sleeping and meeting rooms, and expanding its buyer programs, said president and COO Fred Kleisner. It is rethinking its in-room amenities and plans to renovate 15,000 guestrooms this year.
"Starwood is investing in its brands, particularly in Sheraton," Kleisner said. "The physical appearance category score will go up a great deal. We want to give a look of the millennium to the Sheraton guestroom and name."
Each new room will include a large work surface, task lighting, high-speed Internet access and other business amenities. Installation of the Internet access alone will cost about $800 million. As for décor, they will offer monochromatic color schemes and the "heavenly bed" debuted at W Hotels.
Teleconferencing and T-1 access lines also are being added to Sheraton's urban conference centers. Smart board rooms, whose rollout was launched and halted last year because of the merger, will now be installed in major gateway cities, including Los Angeles, New York and San Francisco.
Coming in sixth for its corporate rate program, Sheraton and its sister brands will be using the Starwood Executive Travel program, which caters primarily to small- to medium-sized companies and global buyers without enough volume to negotiate preferred rates.
<CENTER><B>Merged Hotels Move Up</B></CENTER>
Analysts believe the movement of Doubletree Guest Suites and Renaissance Hotels & Resorts into third and fourth place, respectively, is associated with their mergers into parent companies.
"It may have to do with Doubletree's association with Promus and Renaissance's with Marriott," said hospitality analyst Robert Mandelbaum, who is director of research at New York's PKF Consulting. "It looks like Doubletree and Renaissance may have benefited from the systems they now use and the conduits out there to book business travel that Promus and Marriott provide."
In third place overall, Doubletree took the gold in three individual categories: ease in arranging individual travel, ease in arranging group travel and overall price/value relation.
The latter is no doubt attributable to three programs adopted last year. In January, a senior executive was assigned to each of the chain's 30 top accounts--each of whom books a minimum of 5,000 room nights a year--to solidify the existing relationship and provide personalized service, said Promus executive vice president of marketing Tom Storey.
In the second program, which began 18 months ago, each top account was assigned a national sales manager and several regional or local salespeople to work hands-on with clients at the properties that get its highest volumes.
The third program offered Doubletree's top 350 accounts volume-band pricing, where prices are set based on levels of volume at individual properties and accounts can negotiate lower rates by promising to shift volume.
"There's a real movement with the reorientation of Doubletree," said Ted Mandigo, president of Chicago-based T.R. Mandigo & Co. "The Promus Group coming in and taking a real aggressive position with promotion of that helped."
Despite the programs, though, Doubletree's corporate rate program placed just tenth in the rankings.
On the technology front, Doubletree plans to capture corporate customers' portfolio information after the hotel chain completes the rollout of its System 21 property management system in about 18 months.
<B><CENTER>Renaissance Rises; Marriott, Wyndham Slip</CENTER></B>
While its association with Marriott International may have helped fuel a rise up the charts for Renaissance, Marriott itself slipped three places, to sixth. "I'm not sure if I can explain the switch. We're sometimes puzzled why we went north or south," said Marriott senior vice president Rufus Schriber. "There has been a strong effort on Renaissance to integrate it into the family."
Marriott, like Renaissance and all of the remaining brands on the list, is taking more of an account management approach to sales, moving closer to its biggest buyers.
While Marriott showed a slight dip in ranking, Wyndham Hotels & Resorts, which won third place last year, fell to tenth place as it struggled to absorb the large number of properties that entered its system last year. "I expected that we would drop because our hotel and resort business doubled last year," said Wyndham president Les Bentley. "Doubling the size of the chain made it more difficult to score well because we did not have enough time to implement programs."
The weight of its parent company's financial difficulties also affected its ranking, according to company officials and analysts, and will continue to take a toll until it is resolved, Bentley said.
"The company is battling with problems like surviving," said a hospitality analyst. "Patriot has all kinds of complicated problems."
Still, Wyndham is fighting back. It plans to continue its wave of property conversions and renovations, while also providing specialists to handle group and transient business accounts and improving its business-oriented services and amenities. "Early on we did the basic stuff," Bentley said. "Now the basic stuff is a requirement, not an extra. This year, we're going to get caught up on things we should have done last year."
The company plans to upgrade all business class rooms--10 or 20 percent of its current inventory--and add high-speed Internet access in many guestrooms within two years. For groups, it is considering revamping meeting rooms with high-speed Internet access, projection equipment and space for small groups. It will spend $120 million in renovations this year.
<CENTER><B>Hilton Holds Its Own</B></CENTER>
Although Hilton moved down two places, its preferred buyers stand behind the product and staff, and applaud its constant updates on new programs and projects for meeting buyers.
"Hilton really reflects the kindness of the people with whom I spend time there," Nortel's Pund said. "They have programs every year to keep customers familiar with what they are doing."
Its community-service projects, like offering leftover food to local shelters, also strengthen its relationship with customers. "It gives us a good feeling working with a company that does things like that," Pund said.