In­de­pen­dent Streak

To­day’s busi­ness trav­el­ers ex­pect unique ho­tel ex­pe­ri­ences, and hote­liers are only to happy to ac­com­mo­date

Business Traveler (USA) - - INSIDE - By Jerome Greer Chan­dler

Busi­ness trav­el­ers ex­pect unique ho­tel ex­pe­ri­ences, and hote­liers are only too happy to ac­com­mo­date

Don’t dis­count the im­pact of Mil­len­nial mo­men­tum. It’s chang­ing the face of busi­ness travel, es­pe­cially in their in­di­vid­u­al­ized choices of where to lay their yet-to-gray heads for the night. “I re­ally think we’re fac­ing a very spe­cial mo­ment in the devel­op­ment of the ho­tel in­dus­try, ”as­serts Lukasz Dabrowski, se­nior vice pres­i­dent, global for cor­po­rate ho­tel so­lu­tions provider HRS. Of the roughly world­wide 300,000 prop­er­ties in the HRS port­fo­lio, two-thirds are in­de­pen­dents.

The gen­er­a­tional shift is pro­pel­ling younger busi­ness trav­el­ers to book ho­tel prop­er­ties much the same way they ar­range for their pri­vate travel, Dabrowski says.“The bal­ance is def­i­nitely shift­ing from the same room, with the same ameni­ties wher­ever they go world­wide to­wards the new, the lo­cal, the unique.”

Mar­wan Ba­trouni, se­nior di­rec­tor and ho­tel prac­tice area leader at cor­po­rate travel con­sul­tancy Ad­vito, echoes that as­sess­ment. “Younger trav­el­ers want the best of both worlds ,”he says. They crave fre­quent stayer points, the bet­ter to spend them on their per­sonal leisure long­ings. At the same time they’re also in search of “a non-tra­di­tional or new ex­pe­ri­ence while on the road. ”It’s the sort of thing that keeps Mil­len­ni­als smil­ing, whether they trav­el­ing for busi­ness or plea­sure.

“The mar­ket­ing is evolv­ing and trav­el­ers want options,” agrees Rodolfo El­izando, vice pres­i­dent and head of global busi­ness con­sult­ing at Amer­i­can Ex­press Global Busi­ness Travel. Busi­ness trav­el­ers “ac­cus­tomed to al­ter­na­tive lodg­ings from their leisure travel want these options for cor­po­rate.”

Those options in­clude true in­de­pen­dents and in­creas­ingly the so-called‘soft brands’– in­de­pen­dent prop­er­ties that find economies of scale and mar­ket­ing prow­ess un­der the cor­po­rate um­brel­las of big chain hote­liers.

A Soft Land­ing

The chains are catch­ing on fast to the trend. Af­ter all, the Mil­len­nial mar­ket mat­ters more ev­ery day. Con­sider some of the ma­jor play­ers in the game: Hil­ton World­wide’s Cu­rio Col­lec­tion, Lowes Ho­tels & Re­sorts’OE Col­lec­tion, Mar­riott In­ter­na­tional’s Au­to­graph Col­lec­tion, Star­wood Ho­tels & Re­sorts’ Tribute Port­fo­lio, Choice Ho­tels In­ter­na­tional’s As­cend Ho­tels Col­lec­tion, Best West­ern In­ter­na­tional’s BW Premier Col­lec­tion and Van­tage Hos­pi­tal­ity’s Lex­ing­ton Legacy Ho­tels.

The grow­ing trend presents sig­nif­i­cant op­por­tu­ni­ties in the in­de­pen­dent ho­tel space in gen­eral, as well as among soft brands, ac­cord­ing to Carl­son Wagonlit Travel. By 2020 the march of the

Mil­len­ni­als is ex­pected to ac­count for a full half of all busi­ness trav­el­ers says CWT Ho­tel So­lu­tions group di­rec­tor Eric Jon­geling. “We have seen, and ex­pect to con­tinue to see, a larger ap­petite for these unique prop­er­ties. ”By con­trast, the older guard –“trav­el­ers with longer ten­ure, ”as the CWT ex­ec­u­tive calls them – are look­ing for “the tried-and-true tra­di­tional ho­tel.”

For ex­am­ple, Mar­riott In­ter­na­tional’s lux­ury and life­style port­fo­lio in­cludes such trusty names as Ritz-Carl­ton, JW Mar­riott and Re­nais­sance Ho­tels. How­ever, also pop­u­lat­ing that list are up-and­com­ing brands such as EDI­TION, AC Ho­tels and hip new­comer Moxy Ho­tels. But it is the Au­to­graph Col­lec­tion, Mar­riott’s port­fo­lio of one-of-a-kind in­de­pen­dent ho­tels, that is the ho­tel gi­ant’s fastest grow­ing brand.

To­gether, lux­ury and life­style brands ac­count for nearly 25 per­cent of Mar­riott’s sys­tem-wide pipe­line, and that’s prior to any post-merger con­tri­bu­tion of Star­wood’s flags in the same cat­e­gory.

For Hil­ton World­wide, ex­ec­u­tive Dianna Vaughan knows what it’s like to op­er­ate with one foot in each arena – as se­nior vice pres­i­dent and global head both of soft brand Cu­rio and more tra­di­tional Dou­bleTree.

Cu­rio has over 30 prop­er­ties, with more in var­i­ous stages of devel­op­ment. They range across a cou­ple of dozen coun­tries – with ho­tels as di­verse as The Ho­tel Roanoke & Con­fer­ence Cen­ter, nes­tled in the Blue Ridge Moun­tains of Vir­ginia, to the grand dame Re­ichshof Ham­burg. An­other of the ad­di­tions to the col­lec­tion is Ju­niper Ho­tel Cu­per­tino, which sits a scant mile from the Ap­ple cam­pus. It’s the very essence of a Mil­len­nial en­clave.

What ren­ders these prop­er­ties dis­tinct, says Vaughan, is that ev­ery one of them re­flects the “dis­tinct cul­ture of their re­spec­tive com­mu­nity.” Each is an in­te­gral, some­times legendary, part “of the city that they call home.”

In a more tra­di­tional brand such as Hil­ton’s Hamp­ton, “stan­dards are more pre­scrip­tive ,”she says .“If you go to a Hamp­ton and look at that front desk, you know you’re stay­ing at a Hamp­ton. ”The like­ness is more than skin-deep: guest rooms must be “X-square feet,” the art­work be­hind the front desk fit­ting a fa­mil­iar pat­tern. Soft brands such as Cu­rio af­ford hote­liers the“op­por­tu­nity to be a lit­tle bit more flex­i­ble.”

Points are im­por­tant as well – they can help drive prop­erty pref­er­ence, a point that’s not lost on the soft brands.“The feed­back we get is that trav­el­ers want their HHonors points,” says Vaughan.

But there’s got to be more than points to con­vince cor­po­rate trav­el­ers to book an in­de­pen­dent or col­lec­tion prop­erty. “Cu­rio is backed by Hil­ton. It pro­vides that quiet as­sur­ance” that the reser­va­tion won’t get lost or the room dou­ble-booked. Then there’s the mat­ter of re­search­ing prop­er­ties. Re­spected hote­liers, such as Hil­ton, make the job of scop­ing out the in­de­pen­dents that in­habit their “col­lec­tions” eas­ier.

The Global View

Even as big chains cast an ever-widen­ing net, both through their own main­line prop­er­ties and via col­lec­tion brands, they can’t be ev­ery­where.

“Out­side the US the ho­tel makeup is ac­tu­ally quite dif­fer­ent,” notes Suzanne Ne­u­fang, HRS’ vice pres­i­dent of the Amer­i­cas. Ac­cord­ing to re­search from STR, the break­down among ho­tels in the US is 60 per­cent chain vs. 40 per­cent in­de­pen­dent. But it’s out­side the USA that the indies flat out dom­i­nate. “It’s like 85 per­cent in­de­pen­dent/15 per­cent chain, ”Ne­u­fang ex­plains, and per­haps as high as 90/10.

Some con­text that puts her num­bers into per­spec­tive: Among Euro­pean ho­tels, 88 per­cent are in­de­pen­dents, 12 per­cent chain. In South Amer­ica, 91 per­cent of the lodg­ing in­ven­tory is in­de­pen­dent, 9 per­cent is chain. And in bur­geon­ing Asia/Pa­cific, 95 per­cent of ho­tels are indies, a mere 5 per­cent are chain prop­er­ties.

“We have some ar­eas in the world where in­de­pen­dent con­tent is ab­so­lutely dom­i­nant, ”says HRS’ Dabrowski.

Per­haps it’s travel pat­terns that give the ap­pear­ance chains are more widely dis­persed than they are. It could be that the pres­ence of flag­ship chain ho­tels in the world’s bank­ing cap­i­tals – London, Paris, Frankfurt, Hong Kong and Shang­hai – im­part the il­lu­sion that they’re just as preva­lent in smaller so-called sec­ondary cities.

“It’s not that the chains are not rep­re­sented” in cities that are more off the beaten path, Ne­u­fang says. “It’s just the pro­por­tion of how many, on av­er­age, chain prop­er­ties you have in the re­gion vs. the in­de­pen­dent sup­ply.”

Open­ing New Doors

How does this all fit into the big­ger pic­ture? The new­found fo­cus on in­de­pen­dents and soft brands “re­ally com­pletes the cy­cle, ”con­tends Dabrowski. “Look at what’s hap­pened to those in­de­pen­dent prop­er­ties. They’re re­ally be­ing pushed and squeezed by the con­sol­i­da­tion process in the in­dus­try. ”As a con­se­quence you have big chains with big brands, but that are also de­vel­op­ing their own in­de­pen­dent en­trants. That puts pres­sure on the re­main­ing true in­de­pen­dents.

How this cy­cle of con­sol­i­da­tion and re­newal plays out re­mains to be seen. Cur­rently, the mar­ket is as­sim­i­lat­ing this new ar­ray of oneof-a-kind, life­style ho­tels. And there are manifest rea­sons they’re as­cen­dant just now, not least among them the Mil­len­nial shift. But the re­sults of that shift, both from a purely busi­ness travel as well as larger so­ci­etal per­spec­tive, aren’t in yet.

The em­brace of the new breed of in­de­pen­dents may present “chal­lenges in deal­ing with cor­po­rate trav­el­ers and their or­ga­ni­za­tions ,” ac­cord­ing to Amer­i­can Ex­press’ E liz on do. Re­mem­ber, many in­de­pen­dent prop­er­ties “were de­signed for leisure trav­el­ers. It’s pos­si­ble that they can evolve to meet cor­po­rate needs, but it will re­quire a deep un­der­stand­ing that there’s no one-size-fits-all so­lu­tion.”

Ex­perts do agree on this much: For now, this shift in the makeup of ho­tels – be they true in­de­pen­dents or soft brands – is open­ing up a wealth new busi­ness ac­com­mo­da­tions for a new gen­er­a­tion of busi­ness traveler. BT

Left: Ho­tel La Jolla, Cu­rio Col­lec­tion by Hil­ton; Above: Grand Bo­hemian Asheville lobby, Mar­riott Au­to­graph Col­lec­tion

Above: Moxy Ho­tel in Milan

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