Millennium Names Underhill New Prez

Paul Underhill, the new president of Millennium Hotels and Resorts USA, comes to the job at a critical moment for Millennium and the U.S. lodging industry.

Underhill assumes the reins from Robert Morse, now president of MeriStar Hotels and Resorts (BTN, Oct. 22), following a costly acquisition, renovation and rebranding of 12 gateway-city Regal Hotels, and as U.S. occupancy rates and room revenues continue to drop in an economy made worse by the events of Sept. 11. Further, the Millenium Hilton in New York, located across from the World Trade Center site, is closed temporarily as a result of the attacks.

Underhill, previously an asset manager for Millennium's Singapore-based parent CDL Hotels International before taking over day-to-day operational responsibility for the U.S. portfolio, last week sounded realistic about the challenges awaiting him. "I don't expect the economy to turn around fully until the fourth quarter of next year and business travel with it. Like others in the industry, I've seen ups and downs in the economy, but I've never seen an incident like Sept. 11 have such an impact on the business."

Millennium spent the past year expanding its brand name in the U.S. market. "This was necessary for long-term growth. Travel buyers, for example, had to know what the brand stood for in the marketplace," Underhill said. "But the emphasis now will be on improving operations at the individual properties, so we're sure we're meeting the expectations of business travelers. There's still a lot of strength in the markets we're in and we're going to be taking advantage of that."

Underhill will be accomplishing this objective with diminished resources. "When you're facing occupancies of 70 percent, as opposed to the 85 percent you were expecting, you're going to make certain adjustments—in staffing, for example. What we're going to try to do is simplify operations and operate more efficiently, while still maintaining the high service levels our guests are used to."

He cited Millennium's hotels in Cincinnati and St. Louis as examples of the kind of marketing flexibility for which he'd like the company to be known. "In those markets, we chose to make one of each property's two towers a midprice franchise, while the remaining tower remained an upper upscale Millennium," he said. In each instance, Millennium decided to go with Four Points by Sheraton, which is part of Starwood Hotels & Resorts Worldwide. "With this kind of double branding, we can focus on individual business travelers at the Millennium, while other business travelers, who may be on a more restrictive budget, can stay at the Four Points. Being able to offer two different price points in the same building helps us to expand our market share overall."