On-Airport Hotels Flourish Amidst Unique Challenges

<B>On-Airport Hotels Flourish Amidst Unique Challenges</B>

By Bruce Serlen

As new airport hotels in Boston and Pittsburgh demonstrate, airport properties--more than most types of lodging facilities--deal head-on with the kind of stress business travelers face everyday. Flights canceled because of inclement weather? Long lines of unexpected guests can show up at the front desk, requesting rooms. Downtown hotels sold out midweek? Business travelers will book rooms at the airport and commute to and from business appointments downtown. Flights delayed a few hours? Travelers will book rooms for a portion of the day to use as either makeshift offices or to relax. Likewise, they'll want to gain access to the hotel's fitness center for a half day to work out.

Yet, while airport hotel occupancy rates tended to be among the lodging industry's highest in 1999, airport properties posed distinct challenges from an operations point of view.

"When a hotel is part of an airport, either in the terminal or on property, it's subject to all the stresses that that airport's infrastructure is experiencing," said Robert Dirks, senior vice president of sales and marketing at Hilton Hotels Corp. Hilton recently opened the 600-room Hilton Boston Logan Airport and operated 29 other airport properties at year-end 1999. "Today, airports typically are undergoing accelerated growth, which is anticipated to continue in the future," Dirks added. "That translates into crowded runways, delayed flights and overflowing passenger lounges and parking facilities. All this influences business travelers checking in to airport properties and the level of service these hotels are trying to provide."

For travel managers, airport hotels typically are included in the mix of properties on the approved list for a given destination. "Depending on a client's travel patterns, and volume projections in that market, we negotiate for these properties like we do any other," Dirks said. "Volume is really the prime criteria."

While the Hilton at Logan is close to the airport grounds, other Hiltons, such as the one at O'Hare Airport in Chicago, are actually in the airport. The pressure tends to be more pronounced at these hotels and even is greater when the location is an international gateway. "Getting off long haul flights, travelers often need a place to stay before catching a flight the next day," he said.

But airport hotels have proven convenient for travelers not just flying in or out. Increasingly, airport properties are a destination in and of themselves.

"We're only open a month, but we've already seen a large number of guests conduct their entire business right here at the airport. In terms of making the best use of your time, it's an ideal kind of arrangement," said Patrick Sorge, director of sales at the 330-room Hyatt Regency Pittsburgh International Airport, which is connected directly to the airport terminal by moving walkways.

"Appointments can take place in a guest room, suite or small meeting room," Sorge said. "Yet, we've learned that this kind of business creates a certain level of guest service expectation, in regard to in-room catering, for example."

Sorge said many guests were questioning their perception of an airport hotel. "Travelers simply may have expected a functional box, given that it's part of an airport that runs 24 hours a day. What they find is more of a luxury, almost boutique property that just happens to be attached to an airport."

Typical length of stay at Hilton's airport properties, including the one at Boston Logan, was 1.3 days in 1999. Length-of-stay projections at the Hyatt Regency Pittsburgh are similar: 1.2 days.

Depending on the market and the airport's proximity to downtown, many airport hotels today also serve another segment of the business travel market: They double as a lodging alternative for travelers who, given their first choice, would prefer to stay in the city center. "Considering our proximity to New York City, roughly 25 percent of our travelers use the hotel as a base while commuting in and out of the city to conduct their business," said Steve Cook, director of revenue strategy for the 590-room Marriott Newark International Airport Hotel.

In light of the difficulty and expense of getting a room midweek last year in such key destinations as New York, Cook said the percentage of this overflow business grew in 1999 and likely will increase in 2000 as well. "Once the city backs up, travelers ask themselves, 'Where am I getting off the plane and can I get a room there?' "Cook said.

From an operations perspective, noise and security haven't been major concerns at airport properties, despite what the general perception might be. Staffing and parking, however, have been significant issues.

"The biggest challenge is staff training in anticipation of the surge in demand you experience when the airport closes down for unexpected bad weather," Dirks said. "A similar situation can occur on a smaller scale when a particular flight is canceled due to mechanical problems." Dirks said Hilton airport properties cross-train their staffs with these scenarios in mind. "As a result, we're able to move more people to where they're needed most--the front desk--in a matter of minutes," he said.

But the effects of the surge in demand don't end at the front desk. "On a Sunday night, for example, we might anticipate 70 percent occupancy and inform housekeeping accordingly," Cook said. "But if international flights suddenly are canceled because of weather, occupancy can increase by 100 rooms. This puts stress on housekeeping for Monday, when we might be sold out."

Consequently, Cook said the hotel staff began to rely on the Internet in 1999 to monitor weather patterns. It's at these times that the hotel-airport connection is most put to the test. "We're forced to work together because under the circumstances, these guests aren't going to be very happy," Sorge said. "In fact, they're likely to be tired and disgruntled. The communications are never as good as they should be. So for both us and the airport administration, it can be a real test of proactive customer relations."

In light of increases in airport traffic in 1999 and the convenience for travelers leaving their cars on airport grounds, parking was a chronic problem for hotels last year and likely will remain an issue. "While it varies by property, parking is specifically for the hotel or part of the general airport parking," Dirks said. "We try to get special rates but, given what a revenue producer parking can be, we often are subject to the airport's pricing." For hotels not in the terminal, this puts pressure on the shuttle bus systems they maintain to transport guests. "We have travelers who'll go out of their way to take the hotel shuttle because it tends to be more reliable than the airport's own," Cook said.

Not surprisingly, given that airports operate around the clock, these hotels are seeing demand for use of their guest rooms and fitness centers--on a day basis. "We offer a reduced room rate for day use," Cook said. "Interest in it is growing, but we can't confirm availability in advance because of our high occupancy levels."

"Air travel is stressful," Dirks said. "Travelers who have down time between flights want to take advantage of the relaxation exercise provides.