Hotel & Motel Management - December 8, 2008 - (Page 30) 30 News H&MM December 8, 2008 | HotelMotel.com www.HotelMotel.com/digital_edition Spending Continued from page 4 market first took a noticeable hit, the company put together a contingency plan to free up $8 million for additional advertising. “We know our members are hurting, and we need to work extra hard to help out,” Kong said, adding that BWI implemented a hiring freeze and other cost-saving measures. Kong, who became CEO in 2004, told attendees he started in the hotel industry in 1970 as a busboy and dishwasher at the Hilton Hawaiian Village. Although the next year holds uncertainty, “I’m Ron Pohl, VP of brand quality, said improving breakfast presentation is a high-priority goal. convinced the values that have made this organization prosper and thrive for over six decades will serve us well through these tumultuous times and continue to provide us with the platform to succeed in the future,” he said. Reservations delivery reached a new high, with Lynx revenue up almost 6 percent. Kong projected to end the year with about $1.2 billion in revenue. He said North America will end the year at about $810 million. Year-to-date revenue per available room was up 6.5 percent versus 1 percent industrywide, Kong said. Kong emphasized the importance of international operations, saying larger economies of scale help when it comes to sharing costs, such as upgrading the website and booking engine. “Instead of 2,200 hotels sharing the cost, we have over 4,000 hotels sharing the cost. In addition, we anticipate deriving $1.6 million in profits from international operations this year,” Kong said. By the end of the year, BWI will have about 145 hotels in Asia. Kong also told members to learn from the past. “The worst thing we can do is panic and discount our rates indiscriminately,” he said. In the past 30 years of hotel industry performance, occupancy went down 16 times; average rate went down twice—in 2001 and 2002; and RevPAR went down only three times—in 1991, 2001 and 2002, Kong said. “Occupancy drops don’t necessarily cause the RevPAR to decline. However, discounting our rates indiscriminately will likely cause a drop in RevPAR.” He cited a Cornell University study that found hotels that discounted more than 3 percent actually lost revenue. Bettering brand image While leisure travelers will continue to be a focus, the company needs to concentrate more on business travelers, said Dorothy Dowling, SVP of marketing and sales. Dowling announced the launch of Best Western Business Plus, a program to help properties drive corporate business. Dowling also announced a name change for loyalty program Gold Crown Club International to Best Western Rewards. The loyalty program has seen major growth since 2001, with nearly 9 million members. BWI is projecting almost $650 million in revenue associated with the program this year, a 29-percent increase from last year. Another strategy to enhance the brand’s image is through membership development. David Francis, chairman of BWI’s board of directors and BWI member, said 500 properties have left the system in the past three years, but they are being replaced with superior product. Kong said BWI will continue to ensure it is getting the right quality hotels in the right areas. “We bring in about 150 to 180 hotels a year and most are new construction or AAA three-diamond,” Kong said. “This will have a very positive impact on the entire Best Western portfolio over time.” The company also has 25 projects approved for its Atrea prototype (changed from Atria due to copyright issues), which was introduced last October, Kong said during an interview after the general session. The first of the uppermidscale properties is expected to open in January in San Antonio. The Atrea design is intended to compete with brands like Courtyard by Marriott and Hyatt Place, with a loft-style guestroom and a multifunctional lobby. Ron Pohl, VP of brand quality and member services, talked about short-term initiatives like improving the breakfast presentation is a high priority, based on customer satisfaction surveys. “As we become more competitive at the Courtyard, [Hilton Garden Inn] level, our fees are half that, and owners will find they have a brand that has much better value,” Pohl said. hgunter@questex.com Mirage Continued from page 4 be the company’s largest deal, he said. The division will cater to the luxury market because of the growth potential and the company’s familiarity in that market, he said. Aziz said MGM Mirage is trying to differentiate itself from traditional hotel companies, with innovations in the spas, restaurants and rooms. “We’re trying to focus on having every single amenity in the hotel be the very best,” he said. Focus on design Aziz thinks the future of hotel rooms will be about doing more with less. “You’ll see less clutter everywhere. We’ve bombarded the guests with all of the new tricks and trends that they don’t even know how to move.” Aziz said he wants the design to avoid the trap of doing what’s trendy right now. “Their focus on what’s cute and trendy has made them forget the experience a guest [wants] is to stay away from fads and stick with timeless luxury.” MGM approaches design from a brand-centric nature. “We start with the end in mind. Each brand has a specific set of expectations … so when you’re designing a Bellagio, you have to bring in a designer that is known for designing opulence and elegance.” BEST WESTERN INTERNATIONAL New wealth MGM Mirage also is going after the young, wealthy crowd, Aziz said. “We’ve gone as far as creating a new brand, called MX,” he said. “These people like to be surprised, they like to be wowed and they’re able to afford those innovations. … They get bored very quickly when it becomes too traditional, too stale.” Three MX deals have been signed, and Aziz thinks the brand will grow faster than any other one in the portfolio. pheney@questex.com CIRCLE NO. 117 CIRCLE NO. 124 http://www.HotelMotel.com http://www.HotelMotel.com/digital_edition http://www.sterifab.com http://www.sterifab.com
Table of Contents Feed for the Digital Edition of Hotel & Motel Management - December 8, 2008 Hotel & Motel Management - December 8, 2008 Contents Best Western Sets Spending Strategy Courtyard Turns 25, Unveils New Lobby New Division of MGM Goes Beyond Gaming Perspective Legal FAQ Marketing Matters Family Business On Finance AAHOA Update Satisfaction Trends HotelWorld Update Consultant’s Corner Trends & Stats IH/M&RS Editors’ Choice Award Winners Insurance Ad/Editorial Index Marketplace Classifieds Checking Out Hotel & Motel Management - December 8, 2008 Hotel & Motel Management - December 8, 2008 - Hotel & Motel Management - December 8, 2008 (Page 1) Hotel & Motel Management - December 8, 2008 - Hotel & Motel Management - December 8, 2008 (Page 2) Hotel & Motel Management - December 8, 2008 - Contents (Page 3) Hotel & Motel Management - December 8, 2008 - New Division of MGM Goes Beyond Gaming (Page 4) Hotel & Motel Management - December 8, 2008 - New Division of MGM Goes Beyond Gaming (Page 5) Hotel & Motel Management - December 8, 2008 - Perspective (Page 6) Hotel & Motel Management - December 8, 2008 - Perspective (Page 7) Hotel & Motel Management - December 8, 2008 - Marketing Matters (Page 8) Hotel & Motel Management - December 8, 2008 - Marketing Matters (Page 9) Hotel & Motel Management - December 8, 2008 - Family Business (Page 10) Hotel & Motel Management - December 8, 2008 - Family Business (Page 11) Hotel & Motel Management - December 8, 2008 - On Finance (Page 12) Hotel & Motel Management - December 8, 2008 - On Finance (Page 13) Hotel & Motel Management - December 8, 2008 - AAHOA Update (Page 14) Hotel & Motel Management - December 8, 2008 - AAHOA Update (Page 15) Hotel & Motel Management - December 8, 2008 - Satisfaction Trends (Page 16) Hotel & Motel Management - December 8, 2008 - HotelWorld Update (Page 17) Hotel & Motel Management - December 8, 2008 - Consultant’s Corner (Page 18) Hotel & Motel Management - December 8, 2008 - Consultant’s Corner (Page 19) Hotel & Motel Management - December 8, 2008 - Consultant’s Corner (Page 20) Hotel & Motel Management - December 8, 2008 - Consultant’s Corner (Page 21) Hotel & Motel Management - December 8, 2008 - Trends & Stats (Page 22) Hotel & Motel Management - December 8, 2008 - Trends & Stats (Page 23) Hotel & Motel Management - December 8, 2008 - Trends & Stats (Page 24) Hotel & Motel Management - December 8, 2008 - Trends & Stats (Page 25) Hotel & Motel Management - December 8, 2008 - IH/M&RS Editors’ Choice Award Winners (Page 26) Hotel & Motel Management - December 8, 2008 - IH/M&RS Editors’ Choice Award Winners (Page 27) Hotel & Motel Management - December 8, 2008 - Insurance (Page 28) Hotel & Motel Management - December 8, 2008 - Insurance (Page 29) Hotel & Motel Management - December 8, 2008 - Insurance (Page 30) Hotel & Motel Management - December 8, 2008 - Insurance (Page 31) Hotel & Motel Management - December 8, 2008 - Insurance (Page 32) Hotel & Motel Management - December 8, 2008 - Insurance (Page 33) Hotel & Motel Management - December 8, 2008 - Ad/Editorial Index (Page 34) Hotel & Motel Management - December 8, 2008 - Marketplace (Page 35) Hotel & Motel Management - December 8, 2008 - Classifieds (Page 36) Hotel & Motel Management - December 8, 2008 - Classifieds (Page 37) Hotel & Motel Management - December 8, 2008 - Classifieds (Page 38) Hotel & Motel Management - December 8, 2008 - Classifieds (Page 39) Hotel & Motel Management - December 8, 2008 - Classifieds (Page 40) Hotel & Motel Management - December 8, 2008 - Classifieds (Page 41) Hotel & Motel Management - December 8, 2008 - Checking Out (Page 42) Hotel & Motel Management - December 8, 2008 - Checking Out (Page 43) Hotel & Motel Management - December 8, 2008 - Checking Out (Page 44)
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