Limited Service Hotels Rocking
<B>Limited Service Hotels Rocking</B>
By Bruce Serlen
Even compared with the health of the U.S. lodging industry overall, the midprice without food and beverage segment has shown particular strength in recent months. Both Hilton Hotels Corp. and Marriott International, for example, have announced milestones that signal significant growth for their Hampton and Fairfield Inn brands, respectively. Smith Travel Research data, meanwhile, provided further evidence of the strength of the market for these limited service hotels.
For travel buyers, the midprice segment represents a cost-effective alternative to full service hotels. Considering that many of these properties are located in the suburbs outside downtown business centers, they also can provide travel managers with the access their travelers want to convenient transportation, including to interstate highways and airports.
Smith Travel Research found that in August room revenue in the midprice without food and beverage segment grew 15.1 percent year to date over the prior year. According to Mark Lomanno, Smith Travel's president, this was the largest percentage increase of any hotel chain category. By contrast, the next best growth in room revenue during the period was 12 percent for the upscale chains and 11.1 percent for the upper upscale chains. Midprice chains also led the field during the period in the percentage of increase of rooms sold at 10.1 percent.
Hilton this month announced that 21 new Hampton Inn and Hampton Inn & Suites had opened during August and September. These properties, all of which were franchised, include 16 Hampton Inns and five Hampton Inn & Suites, bringing the total number of hotels in the brand portfolio to 1,056. Since the start of the year, 75 new properties had opened through Sept. 30.
Hampton was one of the brands acquired by Hilton as part of its acquisition of the Promus Hotel Corp. in late 1999. At the time, lodging industry analysts said that such a brand as Hampton was of particular interest to Hilton because of the lucrative franchise possibilities, and that Hilton aggressively would support that growth. Those predictions quickly have been borne out.
"During August and September, the brand opened a new hotel in every region of the country," said Phil Cordell, senior vice president of brand management. Already strong in the Southeast, Northeast and Midwest regions of the country, the brand is now looking to accelerate development in the West.
Included in the August-September openings are new properties that have opened in the suburbs of such cities as Chicago, Kansas City and St. Louis. The suburban properties range in size from the 60-room Hampton Inn in New Philadelphia, Ohio, to the 133-room Hampton Inn and Suites in Greenville-Duncan, S.C.
"We also introduced the new Hampton Inn prototype in August that's being built in Texas," Cordell said. "It eliminates the wall separating the bedroom and living room areas, creating a more spacious feel. It's what we call a 'studio suite.' "
The conversion of the traditional two-room suite into a studio variation is part of a larger trend in the midprice segment. At Hampton, each studio suite measures approximately 375 square feet. Featured are a work surface with two chairs, separate vanity and bath areas, refrigerator/wet bar and sofa sleeper.
Fairfield Inn, by contrast, has grown aggressively in recent months through conversions of existing hotels. This summer, for example, Marriott entered into a franchise agreement under which 20 Chalet Susse hotels will be converted to the Fairfield brand. Olympus Hospitality Group acquired the 20 properties in February. The Chalet Susse hotels being converted consist of 2,320 rooms and are located in New England and the midatlantic states. The chance to establish a "strong foothold" for the brand in these regions, New England in particular, made the deal especially appealing to Marriott, according to John Onorio, Fairfield's brand vice president.
The strength of the Fairfield Inn brand was of particular interest to the owners/managers of the properties. "The importance of branding in today's environment is crucial," said David Simon, CEO of the Paramount Hotel Group, which will manage the properties on behalf of Olympus Hospitality Group.
"The conversion of the Chalet Susse properties will begin following a major renovation of the properties, which already has begun," said Craig Lambert, senior vice president for select service lodging at Marriott. Marriott expects to complete the conversion by August 2001.
Lambert said that Marriott remained on target to reach its stated goal of opening 175,000 new rooms across all of its brands worldwide in the five-year period from 1999 to the end of 2003. Of that total, 70,000 rooms now either are under construction or in the development pipeline.