Hotel & Motel Management - October 20, 2008 - (Page 34) 34 News H&MM October 20, 2008 | HotelMotel.com Success rooms will be finished this year and the attrition rate of rooms will be on the rise. Continued from page 1 6.1 percent over this time last year, Staying ahead with a total of 285,070 rooms While not everything is rosy this year for extended-stay, the hit it’s open. Average daily rates are up by expected to take as 2008 ends more than 5 percent, and revenue should be a light one, thanks to per available room saw a slight in- demand remaining consistent on crease of just under 1 percent. Av- an annual basis, said Mark Skinerage occupancy overall stands ner, a partner with The Highland more than 9 percent higher than Group. “Demand from year to year the U.S. hotel industry average. on a national basis has However, some downnever gone down,” Skinfalls were noted in the rener said. port as well. And even the satuExtended-stay econrated pipeline is someomy and midscale secthing that’s been seen tors took hits to demand many times before in an in the first two quarters, industry well known for falling 0.6 and 1.9 peroverbuilding. cent respectively. Supply “I think the big worry has increased faster than Wyatt is that you get two probdemand, resulting in a HOMEWOOD SUITES lems at once: You get the drop in occupancy of 4.4 percent so far this year, and a con- increase in supply, and if the econtinued softening is expected for omy causes the demand to fall, that makes the decline in occuthe remainder of 2008. And with a pipeline of 28,000 pancy that much bigger,” Skinrooms under construction as of ner said. The historically healthy upQ2 and timelines for completion getting longer, Highland report- scale sector of extended-stay saw its ed it anticipates just 8,000 of those typical climb in demand—2008’s midyear numbers were 7 percent higher than those in 2007—and drove overall demand numbers for extended-stay into the positive. For more on segment trends, visit Skinner said the most notable www.HotelMotel.com/extendedstay. trend seen from midyear numbers ONLINE EXTRA! the economy Suburban Extended Stay Hotels. Today, Choice operates a total of 89 extended-stay hotels, with 74 in its pipeline, said Kevin Lewis, president of Choice’s extended-stay brands. Lewis said part of the success of extended-stay as MainStay Suites properties, such as the one in Port a segment lies in St. Joe, Fla., are in the midscale segment, which saw its low operating demand down 1.9 percent over the past 12 months. costs, especially in personnel. For example, he said, segment at all. Lewis said he has passed on fewer front-desk workers are needed because most hotels have limit- deals at Choice that didn’t offer a ed office hours and are closed over- long-term business plan. The comnight, and housekeeping staffs can pany will measure business generbe kept small because rooms are ators, traffic counts and whether there is a market present to draw cleaned only once a week. Rebecca Wyatt, EVP for up- people in for long stays. Basically, Lewis said, what’s scale extended-stay brand Homewood Suites by Hilton, said anoth- presented should not be a location er key to success for extended-stay at a busy intersection on the interis maintaining a focus on the cus- state, or he’ll turn it down. “There’s The foundation The basic business model be- tomers for which the segment was plenty of opportunity across the hind the extended-stay segment is built—individuals like auditors, country. It’s not like there’s a lot of unique to the industry and poised consultants or medical personnel impact for us,” he said. Wyatt said another key to the for success, thanks to its cost-effi- who travel for a living, even when strategy at Homewood Suites is to cient operations and highly speci- the economy is lagging. “I think there is a great deal of not be reeled into trying to attract fied customer base. Comprising between 5 percent stability in our customer base. … short-stay customers. While the and 6 percent of U.S. room count, We really keep that focus on the option is attractive to guests who extended-stay also stands to take extended-stay mix. That certain- are looking for a suite at a lower a bigger chunk of the industry in ly helps keep the occupancy higher price, there are controls in place at than the rest of the industry,” Wy- Homewood to limit those kinds the future. of stays. “It’s a niche market, and it’s a att said. “I discovered five or 10 years However, construction workmarket that’s growing,” Skinner ers also are key extended-stay cus- ago that if you don’t keep that fosaid. Choice Hotels International is tomers, and their numbers have cus on the right kind of business, one company taking advantage of fallen flat this year along with new you will end up with the one- and that potential. In 2005, Choice, construction—a trend to account two-night business, and you will which already operated midscale for the drop in demand seen in lose the efficiencies that make this type of business work. … If you MainStay Suites as an ancillary economy and mid-price. “Upscale extended-stay runs want to be in the extended-stay extended-stay brand, acquired more like a tradi- business, you need to be in the extional hotel than tended-stay business. If you lose mid-price and your focus, you’re just not going economy. … It’s to get the return you need to see,” not as dependent Wyatt said. At Accor NA, Studio 6 is prion the construction industry,” marily corporate-owned. Out of its 49 properties, only 11 are franSkinner said. chised, Poirot said. The reason behind the move is to find a balance Strategy The process for between the ability to control the opening an ex- product presented across propertended-stay ho- ties, but also allow room for fast tel isn’t just about growth when additional partners how well a brand are brought on board. “Your brand is only as good as may fit but also whether the mar- the consistency at every single loThe Studio 6 brand of economy properties intends to ket in question cation,” Poirot said. expand from its 49 locations to 100 by 2010. Shown jkovacs@questex.com has a need for the here is the property in Charlotte, N.C. is the drop in demand for both mid-price and economy, but he added the fall can be easily attributed to today’s economy and most likely is nothing that will have an impact on extended-stay for too long. While economy might not be the fastest-growing sector of the extended-stay segment, Olivier Poirot, CEO of Accor North America, said he doesn’t see it going anywhere. “There is still a very solid demand for it,” Poirot said. Accor NA operates the Studio 6 extended-stay brand, which is planning an expansion from its 49 properties to about 100 by the end of 2010. At the upper tier of economy, Studio 6 strives to give midprice brands a run for their money by offering comparable amenities at lower prices, Poirot said. “I think it’s all about growth,” he said. “The potential for that brand is between 300 and 500 [properties].” CIRCLE NO. 117 ACCOR NA CHOICE HOTELS INTERNATIONAL http://www.HotelMotel.com http://www.HotelMotel.com/extendedstay
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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