H&MM visits relaunched Holiday Inn

After attending the InterContinental Hotels Group conference in September in Los Angeles, where the Holiday Inn brands and their relaunch efforts took center stage, I wanted an additional perspective.
At the conference, John Merkin, SVP of brand management for Holiday Inn, said there was a real sense of optimism from owners and employees about upgrading their properties. Merkin said he understood some concerns, most notably the cost of items (up to $120,000 for Holiday Inn Express signs and $150,000 for Holiday Inn signs alone), but everyone promised big returns on investment.
But what was the buzz at the properties themselves? How much of a difference did the upgrades really make, and how inconvenient was the renovation process?
Luckily, a Holiday Inn Select in Strongsville, Ohio -- about 20 minutes from Hotel & Motel Management's editorial offices in Cleveland -- had recently went through the transition. Joe Isernia, GM at the property, took a few minutes of his time to show me around and answer some questions. Below you'll find a slideshow of images from the Strongsville Holiday Inn and a Q&A with Mr. Isernia:

Property Holiday Inn Strongsville :: Owner Lodgian
General Manager Joe Isernia :: No. of rooms 303

H&MM: When did the renovations take place?
Isernia: August 25 to August 29, 2008.

H&MM: What have you done and what is left to be done?
Isernia: We replaced both of our exterior signs and added exterior lighting onto the building. We added green ashtrays and garbage receptacles, new potted plants, new exterior benches, added window tinting to the front lobby doors, a lobby scent machine, and a new digital sound machine in the lobby. We installed new Holiday Inn lights and a scripted sign behind the front desk. In the rooms, we installed a curved shower rod with a new, white shower curtain, new bath amenities with a display. We added completely new bed linens with four pillows (two soft and two firm) with pillow tags and upgraded terry products in the bathroom. We are all done with the new hallmarks.

H&MM: Approximately how much did the renovations cost?
Isernia: $330,000.

H&MM: How long was the IHG team at the property?
Isernia: Six days.

H&MM: What were the easiest and most difficult parts of the upgrade?
Isernia: The easiest was the lobby scent machine; the hardest was the bed linens -- that part was time consuming.

H&MM: In your opinion, what upgraded area makes the biggest difference to the guest?
Isernia: The bed and bath linen; they can feel the upgraded product.

H&MM: How will the improvements help you stand out among your competitive set?
Isernia: Keeps us more competitive with our new logo and upgraded guestroom standards.

H&MM: Describe the QA training process, and how did your employees respond?
Isernia: The employees went through a service training workshop from our human resource manager -- five components on service training for the new hallmarks.

H&MM: Will the renovations allow you to increase rates?
Isernia: It will make us more competitive with our competition.

Will the EESA stabilize the industry?

Although many people view the Emergency Economic Stabilization Act of 2008 as a bailout for Wall Street, its effects will be widespread and likely will directly affect the hotel industry, according to faculty from the Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management at New York University. Three faculty members—Bjorn Hanson, Frederic B. Mayo and Donna Quadri-Felitti—were panelists on a podcast released today titled "The Emergency Economic Stabilization Act of 2008 and Its Effect on the Lodging Industry." (To listen to the podcast in full, click here.)

The EESA was enacted on Oct. 3 in response to the meltdown of Wall Street financial institutions. The act was divided into three sections: the Emergency Economic Stabilization Act, the Energy Improvement and Extension Act of 2008 and the Tax Extenders and Alternative Minimum Tax Relief Act. The first section, with its 43 provisions, was the main driver of the podcast and will have the largest effect on the lodging industry. (To download a summary of each of the 43 points, as well as other information, click here.)

"It is one of the most far-reaching interventions in the last 70 years and certainly the most broad-reaching in this century," said Mayo, clinical professor at the Tisch Center.

"There are no specific provisions in the act that relate directly to lodging or the travel industry, but the act will create investment opportunities for our industries," Hanson, clinical associate professor at NYU Tisch Center, said. "As the government acquires troubled assets in the form of mortgages and related instruments, there will be hotel mortgages in the pool." Because of the act's provisions, commercial mortgages—including those for hotels and travel-related businesses—issued before March 14, 2008, are eligible for acquisition.

"The nature of this act and its administration indicate that there may be some important opportunities to purchase mortgages with positive underlying value, purchase mortgages that are returning positive returns relative to the price paid to acquire the mortgages, purchase mortgages and foreclose as an approach to gaining ownership, or to purchase mortgages for resale based on repackaging or waiting for more favorable market conditions," Hanson said. (Check the Treasury website for updates.)

Additionally, some of the money from the act, namely the first $250 billion, already has been injected into the market, said Quadri-Felitti, clinical assistant professor at the Tisch Center. "The initial phase of the $250-billion package is just now beginning to flow into the market. However, some immediate reactions to the actual signing of the legislation were noticeable. These include a surge in the U.S. dollar as foreign investors began buying U.S. treasury debt once the law passed. While the dollar had been recovering from its July ’08 historic low against the euro, since Oct. 1, it has gained approximately 13 percent and, for the year, 22 percent. A similar pattern of recovery is seen against the pound."

The strengthening of the U.S. dollar is bittersweet—although it signals a slight turnaround some time in the future, it also could harm cities that have become dependent on foreign travelers, such as New York, Los Angeles and Miami, Quadri-Felitti said. "Replacing the value of the long-haul foreign traveler is going to be challenging. Nearly every segment will see contractions," she said.

And in the rest of the country, it may not get much better any time soon, with consumer confidence at an all-time low of 38.0 and corporate travel in an emergency freeze state for some companies. "Owners will, in the short term, experience flattened profits and operators will be tested to implement creative ways to reduce expenses," Quadri-Felitti said. "Third-party distribution partners and all stakeholders will need to consider the value of every relationship as well as each relationship’s contribution to the fiscal health of the other."

But the act ultimately will be good for the industry and the economy as a hole, she said, noting it will bring liquidity to the market and has already eased the credit crunch, among other yet-unseen benefits. "This time, perhaps those with successful track records that span more than one cycle will be best situated to capitalize on the coming availability of hotel properties as well as the available debt and capital that will eventually be right-priced as the correction settles," Quadri-Felitti said.

Next up ... Macau

Questex Media, our parent company, owns two popular international investment conferences, the International Hotel Investment Forum (IHIF) held in Berlin; and the Russia & CIS Hotel Investment Conference, which just wrapped up in Moscow a couple of weeks ago.

Just today, we announced that a third exciting show is being launched in 2009: IHIF Asia Pacific, to be held in Macau, June 8-10, 2009.

“The launch of IHIF Asia Pacific is a perfect fit based on the emerging Asian markets and our mission to serve the hotel investment community through the development of leading investment conferences,” said Liz Crawford, global director, IHIF and hotel events for Questex. “The conference will address the enormous potential for hotel investors, developers, operators and consultants around the world, especially in the Asia Pacific region where there is positive upswing in tourism dollars as well as projects in the pipeline. IHIF Asia Pacific will cover all the major regions in Asia and provide key decision makers with first-class networking opportunities and conference programming about the continuing shift of economic power to the Asian market so vital to their future success in hotel investment.”

The conference is scheduled for the much-talked about Venetian Macau Resort Hotel. It is sponsored by CB Richard Ellis Hotels Group and by media sponsors such as our own Hotel & Motel Management, Hotel Design, Luxury Hotelier and The Hotel Times magazines.

This will certainly be one of the “must attend” events in 2009, and we look forward to seeing you there. More details will follow in the coming months.

A good night for hotels in Chicago

Tuesday night, Nov. 5, was a good night for hotels in and around Chicago, where Barack Obama held what turned out to be his presidential victory party in Grant Park. Across the country, John McCain held his election-night event at the Arizona Biltmore, a resort the hotel industry knows very well as host of the annual Lodging Conference.

Two stories that caught my eye this morning focus on Chicago hotel occupancy. Check out this post from Washington Wire, The Wall Street Journal's political blog. About half of one prominent hotel overlooking the Grant Park celebration was booked by Chicago residents, the GM said.

Then look at this article from the Chicago Tribune, talking about how many local families made a night of it, staying overnight in hotels to experience the excitement of an election.

Finally, I really enjoyed this story posted on KTAR.com, an Arizona talk-radio program Web site. It's all about how the staff at the Biltmore prepared for the election-night party.

What's your reaction to the election? E-mail me here with your thoughts.

Marriott celebrates its business brand

Bill Marriott, chairman and CEO of Marriott International, praised the use of space at the new Courtyard Newport News (Va.) Airport hotel, which hosted the brand’s 25th anniversary celebration. The hotel showcases the brand's new lobby and exterior design and refreshed guestroom design. Marriott said he never imagined when the first Courtyard opened that there would be 800 hotels to follow.

When asked about the timing of the redesign, Marriott said, “If you need the opportunity to drive rate, this will give it to you.”

Research found that guests would pay a $10-$15 premium for hotels with the new lobby, said Brian King, VP, global brand manager for Courtyard by Marriott. “We've seen a 27 percent lift in intent to recommend and intent to return scores from our customers."


King hopes to have 500 properties with the new lobby or elements of it by 2011. Courtyard worked closely with its franchise advisory board on the new design. “We’re not just going to throw things out there and say, ‘Do it,'” he said. “What makes this manageable is that it is a kit of parts. Regardless of footprint, we can get the concept in there.”

A new interior design package for guestrooms has a global inspiration that aims to be modern, warm and approachable. Tubs have been taken out of plans for most bathrooms in favor of glass showers. Cost per key will remain about $87,000.

Dilip Desai, senior managing partner for LTD Management Co., which owns and operates the Newport News property, said during his seven years on the Courtyard FAC, Marriott and the owners give and take. “That’s what I like about Marriott. We are the owners and they are listening to us,” he said.

Marriott International will open 30,000 rooms this year and has another 30,000 in the pipeline for 2009. The majority of them already are financed, Marriott said. “We’re good through ’09, and hopefully things [with the economy] will start to turn around by then,” he said.

For a Marriott video of the anniversary event, click here.

Join H&MM for a live chat with TripAdvisor

TripAdvisor reports that three reviews and opinions are posted to its website every minute of every day. And with nearly 20 million having been contributed so far, chances are your hotel can be found there.

As the largest online travel community, TripAdvisor has become a trusted brand for travelers who seek out information vital to helping them plan their trips. They’re not only reading reviews that very well may sway whether they book a room at your hotel, but they’re posting them, too.

I spoke to a number of hoteliers for our Nov. 3 issue about the trend of online reviews, asking them how seriously they take them, what measures are in place to monitor them and how they respond. Some operate in-house and others work with vendors, but all said they pay attention.

Executives from TripAdvisor, however, told me only a small percentage of hoteliers take advantage of the ways they can actually become involved in the site, whether that be signing up for alerts when new reviews are posted about their properties or posting updated hotel descriptions or photos.

So we here at H&MM thought it was time to have both sides sit down and talk.

Join us at 11 a.m. on Wednesday, Dec. 3 for a live online chat with TripAdvisor. Learn how reviews are posted, what steps you can take to be a part of the community and how other hoteliers are using TripAdvisor listings to their advantage.

To be alerted when registration is open, all you have to do is text 806F732 to 64842, and I’ll also keep you posted right here on HotelTalk.

Leisure travelers trading down, not out

The Travel Industry Association hosted a conference call today to present its 2009 Travel Forecast, and the news seemed surprisingly upbeat, at least compared to other forecasts we've been seeing.

Peter Yesawich, chairman and CEO of Ypartnership, reported the October results for the latest Traveler Sentiment Index, which gauges consumers’ interest in leisure travel and their perceived ability to travel. The TSI identified 60 percent of American households as travel households, and from that 60 percent, travelers rated their opinions on six measures. Three of the measures— perceived safety, quality of service and affordability—were rated highly among respondents, with affordability being up dramatically from July (39.1 to 53.1). The other three measures—perceived time to travel, interest in travel and availability of money to travel—dragged the rating down and implied the age old factors of time and money are big issues in the current lull.

The interesting aspect of the numbers is they remained largely unchanged from the TSI done earlier in July, with some numbers getting a boost, which means whatever the impact of the current economic downturn, the leisure market may have already bottomed out.

According to Yesawich, the increase in promotions and deals has led to the higher perception of affordability. "Value is king to the consumer, demonstrated by those saying they want to travel and are looking to do so differently. Three-fourths expect to book some inclusively priced vacation or a packaged vacation," Yesawich said. "People want to know the cost before departure. Managing a budget is important."

Six out of 10 travelers plan to comparison shop for prices, which is an all-time high in the TSI numbers. "People are defaulting to the online world to look at immediate promotional offers," Yesawich said. A growing trend is the all-inclusive trip, which travelers have been looking for more and more.

Another component in this slight increase in consumer confidence (which dropped to a 15-year low in July) is the drop in gas prices, which re-energizes the car trip and helps destinations with close proximity to large populations.

However, as always, there is a downside to this news. This increases a potential need to drop rates in order to draw the budget-conscious travelers, who often chase deals instead of destinations. Also, seven of 10 respondents plan to stay fewer nights on trips. And more remote destinations aren't helped as much by the lower gas prices.

Bottom line, leisure travelers still say they are going to travel—it just might be down the chain scale and for fewer nights.