Marriott Extends Reach Across Extended-Stay Spectrum

<B> Marriott Extends Reach Across Extended-Stay Spectrum</B>

By Lynn Woods

With four extended-stay brands--Residence Inn, TownePlace Suites, ExecuStay and Executive Apartments--Marriott is well on the way to realizing its goal of becoming the "one-stop shopping" option of choice for companies seeking not only a room for the night, but a room for a month. With 310 properties open, an 83 percent average occupancy and 90 more hotels slated to be added by the end of 2001, Residence Inn--the extended-stay leader--is a formidable competitor. Launched 24 years ago (it is the oldest brand in the industry), the brand has a share of 4 percent among extended-stay firms charging $65 a night or higher--by far the largest in the segment.

Tim Sheldon, Residence Inn's vice president of marketing, said the brand is striving to gain more share, though the road ahead is anything but easy. "Our vision is that when customers have a need for extended stay, they think of Marriott first," he said. The source of future customers is traditional full-service hotels, and getting them won't be easy. Extended stay, which only has attracted widespread interest in the past few years, is a relative neophyte at name recognition.

Residence Inn also has to contend with increasing competition from companies offering a newer product. To keep its own hotels fresh and up to date, management continually is tinkering with facility standards. As part of the latest updating, it is enhancing the public spaces (see story, page 16).

TownePlace Suites, a newer, midprice brand launched two years ago, now numbers 44 hotels and is continuing to grow. The big news, however, is Marriott's dramatic expansion of ExecuStay, a corporate housing service it acquired earlier this year that offers serviced apartments for a month or more in major U.S. cities.

ExecuStay has been snatching up corporate housing providers at a frantic pace in the past two months. In Columbus, Ohio, it acquired Executive Living, a 300-unit company, while in Dallas it bought the corporate housing division of JPI, a Dallas company with about 150 units in the Sunbelt city. It also has purchased Executive Living of Stockton, Calif., which doubles ExecuStay's Bay Area corporate apartment inventory to approximately 1,500 units.

In addition, ExecuStay has formed a long-term lease agreement with Pine Equity N.Y. Inc., doubling its Manhattan inventory to approximately 500 apartments. Gary Abrahams, ExecuStay's CEO and president, said the firm currently offers more than 6,500 apartments in 45 states. That number no doubt will expand as ExecuStay enters new international markets, such as London, which is planned for next year. For now, Marriott's extended-stay presence overseas is limited to Executive Apartments, which offers apartments in Budapest and Hong Kong.

In high-demand markets, such as New York, Tyson's Corners, Va., San Francisco and Boston, the company will master-lease inventory to ensure availability. In New York, for example, 25 percent of ExecuStay's overall business consists of fixed inventory.

Abrahams said about a third of customers were corporate travelers and another third were businesspeople in the midst of relocating. A few deals have been brokered with large-volume corporations in which the corporation signs a lease for a year and ExecuStay manages the inventory.

He noted that seven of Marriott's largest accounts were beginning to use ExecuStay for their extended-stay needs, albeit through a business agreement rather than formal contract. To further entice Marriott customers, as of April, all four extended-stay brands have been included in the Marriott Rewards frequent stay program.

Marriott also is marketing its extended-stay brands through the recent creation of an extended-stay division within its national sales force. Abrahams said sales reps and reservation agents currently were undergoing cross-brand training--enabling them, for example, to reserve a Residence Inn suite in the event the Marriott in the same city is sold out. Previously, sales efforts have been "pretty much stand-alone."

Marriott in July opened an extended-stay desk at its central reservation center in Omaha, Neb. "We're starting to see a lot of opportunities come through our central reservation number," said Abrahams.

With Marriott's conversion to Web-enabled software, reservationists soon will be able to have access to available inventory for ExecuStay, allowing them to make a booking on the spot. So far, they have had to contact apartment suppliers with a request by e-mail, which required them to call back a prospective guest in a couple of hours with an available location and price.

Corporate travel managers also can shop for apartments through Marriott's Web site, by filling out an application, e-mailing it to the hotel company and awaiting a reply, Abrahams noted.

Marriott is putting its stamp of quality on ExecuStay by implementing a set standards in the apartment facilities, furnishings and amenities. By the beginning of next year, guests can expect to see the same type of cherry trunk, houseware brands and bed--covered with a comforter and prettied up with dust ruffles--no matter where they stay.

Every living room will have a 25-inch-screen television, and a second TV in the bedroom, microwave, VCR, answering machine and two phone lines will be standard. Abrahams said Marriott currently is contemplating the inclusion of a stereo in the package.

In most cases, other facilities include an in-apartment washer/dryer, a fitness room in the building and a pool, either on the roof, in the case of city apartments, or accompanied by tennis courts in suburban locations.