Suite-Like Properties Dominate Midprice, No-Food Segment

<B>Suite-Like Properties Dominate Midprice, No-Food Segment</B>

By Bruce Serlen

If further evidence were needed that the suite concept has taken hold among the midprice segment of the business traveling public, consider this: The top three spots in the survey's midprice category for chains without food and beverage service all were won by suite properties--or at least variations on the suite concept.

The three--in the order in which they placed--are Hampton Inn & Suites, AmeriSuites and Country Inns & Suites. A year earlier, the three chains placed among the top four positions. Hampton led the field for ease in arranging individual travel, while AmeriSuites received the highest score for ease in arranging group travel.

But serious questions are being raised about the profusion of suite brands in the marketplace today and the nature of the suite product being offered.

On the simplest level, of course, corporate travel buyers are happy to include suite properties on their preferred lists of hotels because of the extra living space they provide. "Business travelers can more easily use the suite as a temporary office or, if the stay is for more than a few nights, the extra space allows them to spread out and feel more at home," said Phil Cordell, senior vice president of brand management for Hampton Inn & Suites.

But in today's era of flexibility and adaptability, there's no longer a clear model for what constitutes a suite property or, for that matter, a suite. Traditionally, a suite has a parlor/living room and one or more separate bedrooms with a door that can be closed for privacy. Yet, suddenly it seems that one room can be deemed a suite, if it is spacious enough.

Fine tuning the experience of a business guest staying at a Hampton Inn & Suites property, the chain last month introduced a new prototype design. The prototype eliminates the wall separating the bedroom and living areas and offers a more spacious studio suite.

In addition, the lobby/breakfast area of the property--where the free continental breakfast is served--is being expanded. "Our market research told us we had been over-delivering to the business traveler by providing a traditional one-bedroom suite with full kitchen," said Cordell. "Typical business guests are here for shorter stays, but say they want additional space."

These changes could suggest flexibility or brand dilution. "All-suite properties have proven so popular because there was a clear differentiation between them and traditional hotels," said Jack F. Trout, president of Trout & Partners, a marketing strategy firm, and author of Differentiate or Die. "Once the points of differentiation are taken away, you run the risk of blurring your image."

At Hampton Inn & Suites as well as AmeriSuites and Country Inns & Suites, meanwhile, special features are being added to increase the appeal to the target business traveler. At AmeriSuites, for example, TCB (Taking Care of Business) suites proved particularly popular in 1999. The suites are outfitted with special desks, ergonomic chairs and other business-friendly amenities.

"More business people are bringing work with them when they're out of the office. Consequently, they're prepared to pay a premium for something like a TCB suite because it allows them to be more productive while they're with us," said John Leavitt, senior vice president and brand manager for Prime Hospitality, owner of the AmeriSuites brand.

Coming down the road is high-speed Internet access, which will allow business travelers to check and send e-mail messages. "It's coming, but the wave hasn't crested just yet," said Paul Kirwin, president of Country Inns & Suites.

For corporate travel buyers, negotiating with these chains can differ from negotiating with chains in other segments of the industry. "We feature everyday value pricing, so there really isn't a lot of room for negotiating," said Cordell.

"We'll negotiate with national clients," said Leavitt, "but it's often for a specific property. The customer involved may have a manufacturing plant or office nearby and be bringing a particularly large amount of business to that one property."

As with other segments of the hotel industry, midprice chains are undergoing aggressive expansion. Country Inns & Suites, for example, plans to add 50 units a year for each of the next five years. Similarly, AmeriSuites plans to more than double in size (from 98 hotels to 200) by the end of 2001.

Locations should remain suburban sites--typically along a highway, which provide travelers with easy access by car. Leavitt has a preference for sites near shopping malls and movie multiplexes because it gives guests convenient access to leisure activities.

Like other value segments, urban sites are considered too expensive to develop. "The rate structure we'd be forced to charge wouldn't be realistic for our business traveler," said Kirwin.

Hampton Inn & Suites is setting its sights on development outside the United States. "We already have a modest presence in Canada and Mexico and even a limited distribution in South America," said Cordell. "But we expect these markets to grow over time."

Consistency of product is crucial, however. "For a variety of reasons, consistency becomes more of an issue for us outside the United States," Cordell said. "If we can be successful though, it can become a competitive advantage because U.S. business people will recognize our brand as reliable and a good value when they travel to these countries.