Niche Hoteliers Look on the Bright Side

Even as occupancy levels continue to stay low, executives at historic properties remain positive

By: David Peterkofsky

SAN FRANCISCO Despite dealing with low occupancy levels and room-rate erosion from hotel discount Web sites, hospitality executives at the Historic Hotels of America’s annual meeting here encouraged colleagues to emphasize the unusual characteristics of their properties in an effort to bring back business.

Throughout a panel discussion entitled “Thoughts From the Top,” executives urged the assembled hoteliers to tout the individual charms of their historic properties in order to generate publicity and tourist dollars.

Bill Otto, president and Chief Operating Officer of Marcus Hotels and Resorts, told hoteliers they should be “celebrating who you are as a hotel. Each of you has something the chains don’t have a personality.”

Emotional Connection

Tom LaTour, chairman and CEO of the Kimpton Hotel & Restaurant Group, echoed that sentiment, saying hotels and hoteliers must make “an emotional connection with your customers. Without that, you’re dead meat.”

Hotel companies no longer can afford to be complacent, with sales teams that don’t fully understand the selling points of their properties or lack the know how to generate new business, said Thatcher Brown, director of business development for Fairmont Hotels.

Brown said many hotel sales reps today simply don’t know how to prospect for new business properly. Marcus’ Otto agreed, noting that his company established a product education program for its sales representatives shortly after Sept. 11 to quickly improve their selling techniques.

“The skills required to sell today are very different,” Brown said. “The phones aren’t ringing anymore.”

Brown and the other panelists felt strongly that the travel-agent sales channel remains as viable as ever, despite the ongoing consolidation among retailers.

Agents are “experts who can create customized solutions” and will be continue to be valued by Fairmont, Brown said.

Agents Will Survive

Otto added: “Travel agents will still be here for some time. Though U.S. shoppers are looking on the Internet, they’re not buying as heavily.”

As part of the panel’s talk, Mark Lomanno, president of hospitality industry watcher Smith Travel Research, presented statistics that indicate the worst may be over for the hotel industry as a whole.

Industrywide, occupancy levels dipped 2.1 percent to 61 percent for the first nine months of 2002, according to Smith figures.

But Lomanno noted that more people stayed in hotel rooms during the summer of 2002 than in the previous summer, and the hotel industry added more than 100,000 new rooms during the past 12 months.

Demand Is Increasing

Demand actually has increased incrementally throughout the year, according to Lomanno, who added that demand will likely register a 1.5 percent increase for 2002 and climb another 2.5 percent to 3 percent in 2003.

Ultimately, the increase in demand will strengthen average daily rates, said Lomanno, who noted that he recently read an article that said today’s Web-savvy travelers view the purchase of a hotel room as the second most negotiable purchase behind buying a used car.

But the 15 largest hotel markets in the United States will continue to struggle in 2003, Lomanno said, largely due to their reliance on business and convention business, which he predicted would remain sluggish.

Industry Research

Another researcher, John S. Fareed of Resort Marketing Partners, shared the results of a questionnaire his firm sent to managers of small, medium and large hotel properties across the country.

The Resort Marketing survey asked the hoteliers for the top issues they are facing in the coming year.

Echoing the concerns of many in the travel industry, including travel agents, their responses included: the current uncertain economy, attracting and retaining qualified employees, geopolitical fears centered on the possibility of conflict in Iraq and further terrorist attacks, finding the right partners for distributing room inventory, and the rising costs of doing business, such as insurance and utility costs and property taxes.