Hotel & Motel Management - October 20, 2008 - (Page 18) 18 Trends & Stats H&MM October 20, 2008 | HotelMotel.com www.HotelMotel.com/digital_edition Brand conversions popular, effective choice for hotels IN THE details Switching brands helps growth Conversions eliminate oversupply Segments see activity Midscale with F&B takes hit U.S. conversion activity room supply—12 months ending July 2008 Change in thousands 50 25 25.4 14.6 1.6 -1.3 -6.3 -26.4 -23.7 -48.1 -30.7 34.1 17.3 38.7 By Bobby Bowers H&MM Columnist hile new hotel construction often is the most prominent brand development mechanism, hotel conversions can offer an effective complement for brands to quickly gain distribution and grow market share. Moreover, newly converted rooms are not added to hotel room inventory, thereby eliminating the potential “oversupply” effects of newly constructed rooms in the marketplace. Examining the U.S. conversion numbers from the past 12 months ending July 2008, conversion activity was 131,700 rooms converted in and 136,500 rooms converted out of chain scales. The conversion volume was concentrated in the midscale-with-food-and-beverage and economy chain scale segments. These W the upscale segment were seen with the Crowne Plaza brand, which experienced a net gain of about 3,000 rooms through conversion over the past 12 months. It is important to note development activity over the past several years in the midscale-without-F&B segment and upscale segment has skewed predominantly to new construction. The Quality Inn brand, which is in the midscale-with-F&B chain scale, was particularly active in conversions and gained the most net conversion rooms of all brands over the past 12 months—basically twice as many rooms as its closest competitor and sister brand, Rodeway Inn gained. Crowne Plaza, Baymont Inns & Suites and Doubletree round out the top five net conversion gainers. It’s not surprising the top three conversion loss brands are in the midscalewith-F&B segment. The nature of Best Western’s membership agreements results in a fairly “natural” out-flow and in-flow to the brand. Other chains in the segment contribute to the conversion activity as they work to eliminate tired product and obsolete locations while bringing in new hotels to keep their brands fresh. Although conversion activity normally is highest in the midscale-with-F&B and economy segments, strategic conversions in the upper-upscale segment have helped select brands gain share. Hilton 0 -25 -50 -75 Conv in Conv out Luxury Upperupscale Upscale Midscale w/F&B Midscale w/o F&B Economy Top 10 brands converted into—12 months ending July 2008 Rooms in thousands Quality Inn Days Inn Econo Lodge Ramada Rodeway Inn Holiday Inn Americas Best Value Crowne Plaza Sheraton Comfort Inn 4.8 4.8 4.5 4.5 4.4 5.7 5.5 5.1 6.5 11.7 0 5 10 15 Top 10 brands converted out of—12 months ending July 2008 Rooms in thousands Best Western Holiday Inn Ramada Days Inn Comfort Inn Quality Inn Adams Mark Holiday Inn Express Super 8 Econo Lodge 4.5 4.0 3.6 3.4 3.3 6.1 5.9 5.5 9.2 16.7 Upper-upscale chains experienced a net gain of more than 8,000 rooms while midscale without F&B lost a net of just more than 6,000 rooms. The upscale segment basically had zero net conversion activity—about 1,000 rooms for a net loss from conversions. two segments have experienced relatively high conversion numbers over the past several years. In the most recent 12month period, the midscale-with-F&B segment experienced a net loss of about 14,000 rooms while economy gained about 8,000 rooms. As would be expected, luxury chains experienced the lowest conversion activity. The segment was basically unchanged, with a net gain of 300 rooms. Upper-upscale chains experienced a net gain of more than 8,000 rooms while midscale without F&B lost a net of just more than 6,000 rooms. The upscale segment basically had zero net conversion activity—about 1,000 rooms for a net loss from conversions. Higher gains in experienced a net gain of 2,000 rooms over the past 12 months, while Sheraton also actively converted participants, gaining 1,400 rooms net through conversions. Conversions can be an effective method to gain market share while avoiding the potential negative effects of adding to new supply, particularly in a challenging operating environment. Combined with the right mix of new development activity, conversions can help hotel brands stay fresh with increased inventory and gain distribution quickly. hmm@questex.com Bobby Bowers is senior vice president of operations for Hendersonville, Tenn.-based Smith Travel Research. 0 5 10 15 20 Top 10 brands—net conversion gains—12 months ending July 2008 Rooms in thousands Quality Inn Rodeway Inn Crowne Plaza Baymont Doubletree Econo Lodge Knights Inn Americas Best Value Hilton Howard Johnson 1.7 3.1 2.8 2.6 2.4 2.2 2.2 2.0 3.7 7.2 0 5 10 © 2008 Smith Travel Research http://www.HotelMotel.com http://www.HotelMotel.com/digital_edition
Table of Contents Feed for the Digital Edition of Hotel & Motel Management - October 20, 2008 Hotel & Motel Management - October 20, 2008 Contents Event Empowers Property-Level Leaders Boutique Bonanza Perspective Legal FAQ Consultant's Corner AAHOA Update Sales Clinic HotelWorld Update On Finance Trends & Stats Surprise Guests by Predicting Their Needs Transactions Worse Than Most Predicted Electronic Safes Housekeeping Services Marketplace Events Ad/Edit Index Classifieds Checking Out Hotel & Motel Management - October 20, 2008 Hotel & Motel Management - October 20, 2008 - Hotel & Motel Management - October 20, 2008 (Page Cover1) Hotel & Motel Management - October 20, 2008 - Hotel & Motel Management - October 20, 2008 (Page Cover2) Hotel & Motel Management - October 20, 2008 - Hotel & Motel Management - October 20, 2008 (Page 1) Hotel & Motel Management - October 20, 2008 - Hotel & Motel Management - October 20, 2008 (Page 2) Hotel & Motel Management - October 20, 2008 - Contents (Page 3) Hotel & Motel Management - October 20, 2008 - Boutique Bonanza (Page 4) Hotel & Motel Management - October 20, 2008 - Boutique Bonanza (Page 5) Hotel & Motel Management - October 20, 2008 - Perspective (Page 6) Hotel & Motel Management - October 20, 2008 - Perspective (Page 7) Hotel & Motel Management - October 20, 2008 - Consultant's Corner (Page 8) Hotel & Motel Management - October 20, 2008 - Consultant's Corner (Page 9) Hotel & Motel Management - October 20, 2008 - AAHOA Update (Page 10) Hotel & Motel Management - October 20, 2008 - AAHOA Update (Page 11) Hotel & Motel Management - October 20, 2008 - Sales Clinic (Page 12) Hotel & Motel Management - October 20, 2008 - Sales Clinic (Page 13) Hotel & Motel Management - October 20, 2008 - HotelWorld Update (Page 14) Hotel & Motel Management - October 20, 2008 - HotelWorld Update (Page 15) Hotel & Motel Management - October 20, 2008 - On Finance (Page 16) Hotel & Motel Management - October 20, 2008 - On Finance (Page 17) Hotel & Motel Management - October 20, 2008 - Trends & Stats (Page 18) Hotel & Motel Management - October 20, 2008 - Trends & Stats (Page 19) Hotel & Motel Management - October 20, 2008 - Surprise Guests by Predicting Their Needs (Page 20) Hotel & Motel Management - October 20, 2008 - Surprise Guests by Predicting Their Needs (Page 21) Hotel & Motel Management - October 20, 2008 - Transactions Worse Than Most Predicted (Page 22) Hotel & Motel Management - October 20, 2008 - Transactions Worse Than Most Predicted (Page 23) Hotel & Motel Management - October 20, 2008 - Transactions Worse Than Most Predicted (Page 24) Hotel & Motel Management - October 20, 2008 - Transactions Worse Than Most Predicted (Page 25) Hotel & Motel Management - October 20, 2008 - Electronic Safes (Page 26) Hotel & Motel Management - October 20, 2008 - Electronic Safes (Page 27) Hotel & Motel Management - October 20, 2008 - Electronic Safes (Page 28) Hotel & Motel Management - October 20, 2008 - Electronic Safes (Page 29) Hotel & Motel Management - October 20, 2008 - Housekeeping Services (Page 30) Hotel & Motel Management - October 20, 2008 - Housekeeping Services (Page 31) Hotel & Motel Management - October 20, 2008 - Housekeeping Services (Page 32) Hotel & Motel Management - October 20, 2008 - Housekeeping Services (Page 33) Hotel & Motel Management - October 20, 2008 - Housekeeping Services (Page 34) Hotel & Motel Management - October 20, 2008 - Housekeeping Services (Page 35) Hotel & Motel Management - October 20, 2008 - Housekeeping Services (Page 36) Hotel & Motel Management - October 20, 2008 - Housekeeping Services (Page 37) Hotel & Motel Management - October 20, 2008 - Marketplace (Page 38) Hotel & Motel Management - October 20, 2008 - Events (Page 39) Hotel & Motel Management - October 20, 2008 - Ad/Edit Index (Page 40) Hotel & Motel Management - October 20, 2008 - Classifieds (Page 41) Hotel & Motel Management - October 20, 2008 - Classifieds (Page 42) Hotel & Motel Management - October 20, 2008 - Classifieds (Page 43) Hotel & Motel Management - October 20, 2008 - Classifieds (Page 44) Hotel & Motel Management - October 20, 2008 - Classifieds (Page 45) Hotel & Motel Management - October 20, 2008 - Checking Out (Page 46) Hotel & Motel Management - October 20, 2008 - Checking Out (Page Cover3) Hotel & Motel Management - October 20, 2008 - Checking Out (Page Cover4)
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