April 30, 2008 - The hotel industry continues to reinvent itself to accommodate the ever-changing face of the business traveler. These days, the revamp is targeting younger travelers for whom technology is indispensable. During the past 38 months, a total of 38 hotel brands have been introduced, according to PricewaterhouseCoopers hotel analyst Bjorn Hanson. Of those brands, 20 are in the luxury segment, 12 upscale, three extended stay and three midscale.
At the same time, some companies now allow employees to stay at hotels of their choice for a per diem rate, Hanson said. "The traditional way was to have contracts with hotels or hotel companies, but more and more companies are putting aside those traditional arrangements," he explained. "Instead, the travel management department is allowing people to make their own choices by setting up a per diem."
When making choices, younger business travelers want brands that pamper, fit their lifestyles and offer a unique hotel experience--rather than seeking comfort in traditionally familiar brands. Therefore, hotel companies are creating new brands that offer guest amenities uncommon in most big-named brands, including sleek flat-screen desktop computers located at the bar.
"This generation lives in loft-type accommodations, drinks Starbucks and flies on JetBlue," said John Russell, CEO of NYLO Hotels, a new brand that opened its first doors in December in Plano, Texas. "They want a new experience. They like design-driven, high-tech environments for a good price. It is a product void and a price-point void."
In NYLO's Plano property, pod chairs hang from high ceilings in the guest rooms, adding to the loft-like milieu. A 24-hour bar, restaurant, fitness center, game room and trendy furniture are NYLO standards, strategically placed to appeal to this market, according to Russell.
"A lot of business travelers get up early in the morning to catch flights at 3 a.m.," Russell explained. "They want food, a large fitness center and a sauna that allows them to relax. It should be a fun business trip, and most business travelers have a 'been-there-done-that' attitude and want something new and contemporary."
NYLO plans to build 52 new hotels around the United States--including in the metropolitan areas of Denver, Dallas and Providence, R.I.--each incorporating local aesthetics and, therefore, avoiding complete uniformity within the brand. A typical night at one of the properties would cost between $120 and $220. The NYLO Hotels XP brand extension, according to the company, "caters to business travelers looking for midprice lodgings with unique design and enhanced amenities," with nightly room rates ranging between $90 and $110.
Earlier this year, Marriott International and boutique hotel guru Ian Schrager partnered to launch a new luxury brand named Edition. The boutique brand will debut in 2010 with properties in Arizona, Chicago, Costa Rica, Los Angeles, Madrid, Miami, Paris and Washington, D.C. The partners expect as many as 30 development deals by year-end.
"There are all kinds of reasons for going into hotels, and this hotel fits into a niche that we're not in," said Marriott chairman and CEO Bill Marriott.
Traditionally, hotel companies relied on brand awareness to drive bookings, but with the help of the Internet, new brands can be marketed online with pictures and reviews. In that way, hotel companies can take risks and introduce individualized boutique brands.
"The Internet has made it very easy to conduct research and discover new brands," said PwC's Hanson. "Google, online virtual tours of the hotels and visitors' comments on Trip Advisor make it much easier and less expensive to launch brands. We are in a period of accelerating construction despite the reports that there is no money in the hotel industry. There are greater numbers than there were two years ago."
The new generation of traveler is concerned not only with staying at a hip, new location, but also with what effect their stay may have on the environment. Reducing a business traveler's carbon footprint has been a major concern, and travel managers have responded to that by including environmental questions in the requests for proposals they send to lodging companies.
Starwood Hotels and Resorts Worldwide in 2006 introduced Element, which the company this year said would be the first brand built exclusively with properties certified by the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) program.
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| Company |
Brand(s) |
|
| LUXURY |
| Marriott International |
Ritz Carlton Reserve,
Edition |
| Starwood Capital |
Crillion,
Baccarat |
| Hilton Hotels |
Waldorf=Astoria Collection
|
| Hyatt |
Andaz |
| Taj Hotels and Resorts |
Taj,
Blue |
| Gansevoort Hotel Group |
Gansevoort |
| West Paces Hotel Group |
Capella |
| Graves Hotels Resorts |
Graves Hotels |
| WHM, LLC |
LXR Hotels |
| West Paces Hotel Group |
Solis |
| Novare Group |
Twelve Hotels |
| Preferred Hotel Group |
Montage |
| Rocco Forte Hotels |
The Rocco Forte Collection |
| Candela Hotels |
Candela Hotels |
| Remington |
The Gallery |
| SBE Entertainment Group |
SLS Hotels |
|
UPSCALE |
| Starwood Hotels and Resorts |
Aloft |
| Global Hyatt |
Hyatt Place |
| NYLO |
NYLO Hotels |
| Kimpton |
Palomar |
| Alden Hotels |
Alden Hotels |
| Aqua Hotels and Resorts |
Aqua Boutique Hotels |
| Auberge Resorts |
Solage |
| Lifestyle Hospitality |
James Hotels |
| LXR Luxury Resorts |
Stay Social |
| Vantage Hospitality Group |
Lexington Collection |
| Kor Hotel Group |
The Tides |
| eSuites Hotels |
eSuites |
|
| MID-SCALE |
| Best Western |
Atria |
| CityStay Hotels |
CityStay |
| NYLO Hotels |
XP |
|
| ALL-SUITES |
| Starwood Hotels and Resorts |
Element |
| Choice Hotels |
Cambria Suites |
| HVM, LLC |
Extended Stay Deluxe |
Source: Bjorn Hanson, global leader of PricewaterhouseCoopers' Hospitality & Leisure Practice
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