Hotels. Sparring.

FOXTROTSFox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 

2006 October 20

Hotels. Sparring. 

Many hotels are spending millions on spas, and it will take them years to get their money back – if they ever do. 

Fighting words. Sounds like something I would say, but these are actually the words of somebody who should know about the spa business – Mike Canizales, ex-Microsoft but now running a spa-development operation called Spa Chakra. 

He adds that hoteliers need to look at a spa as a stand-alone profit centre. “Spas are still like a restaurant – lunch and dinner are busiest periods,” he says.  

“But they should not be more than 50% full.” Fully-booked spas are considered successful, like Mandarin Oriental’s in
London – where its seven rooms are booked, says Canizales, from here to eternity. But guests hate them because you can never get in. 

(Which reminds me of what Yogi Bear said – “no-one goes there any more; it’s too crowded”.) 

Canizales also believes that spa residence rooms/suites in a hotel can be profitable only if they can be converted to regular suites if needed for occupancy. 

end

Conglomerate. De-Cendant.

FOXTROTSFox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 

2006 October 10

 

Conglomerate. De-Cendant. 

 

As I advised my reader in my most recent column, the Cendant hotel group was looking for a new name. It did not look very far; it chose Wyndham, the name of the hotel company it bought at the end of 2005. 

 

I believe this is a  mistake – albeit partly because Cendant did not buy my over-priced manual ‘All You Need To Know About Branding In 60 Minutes’. 

 

The reason is that the consumer does not get it. Just take a look at all the new names, and twists and turns with old names I have written about on this page. There is too much for them to retain, with similar descriptions. 

 

Somewhat puzzling is that more than a few hotel companies are ignoring my advice, and naming their group after one of their brands. Examples – Hilton, InterContinental, Marriott, Raffles, Shangri-La. For sure, they are all on the verge of collapse, but perhaps not just yet. 

 

end 

 

Branding. Too many limits.

FOXTROTSFox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 

2006 September 30

Branding. Too many limits. 

Rather suddenly (ok, so I missed it), InterContinental has launched another brand – Indigo. This is a limited-service brand (hotel-speak for no-service), initially with four in the
US. 

But wait a minute, doesn’t IC already have Express (which is a limited-service brand) to cover the LS sector? Or is there something else I missed? I know Indigo has a bit more colour (particularly indigo), but surely that’s not enough to support a brand? 

end

Double standards. Terrible news.

FOXTROTSFox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 

2006 September 20

 

Double standards. Terrible news. 

 

I am puzzled why certain
US senators, and a majority of the
US population, have not moved to stop Kingdom Hotels investing and managing hotels in the
US – in
Fairmont and Four Seasons, in which Kingdom owns equity. (I know these two are Canada-based companies, but you know what I mean.) 

 

Kingdom is clearly a terrorist operation; not only is it Saudi owned, but it is now planning a stockmarket listing in
Dubai. And as all right-thinking people know, anything related to
Dubai is also terrorist-related.  

 

What more proof is needed? 

 

Unfortunately, this scenario is not too far from reality. There was strong and sadly-wide support in the
US to stop a
Dubai government company from running six ports in the
US after its takeover of P&O Shipping. 

 

Not only is P&O in itself not far removed from the travel business, but its Dubai buyer, Dubai Holdings (which comes in many forms), also owns Madame Tussauds in London, the Jumeirah hotel group, and Thomas Cook Travel in India. (Nothing was said, ironically, when Jumeirah Hotels recently bought the Essex House hotel in
New York.) 

 

end

Asia: Future resorts.

 

 

FOXTROTSFox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 

2006 September 20

 

Asia: Future resorts. 

I usually stumble on trends at least six months after everyone else, but this one I made up myself before everyone else: 

 

New low-fare airlines (LFAs; from
Bangkok,
Kuala Lumpur, and
Singapore) have added an impressive selection of routes to Phuket over the past 15 months. All came before the tsunami, but there is no reason to believe they will not continue. 

 

Achieved hotel rates on the island fell in 2004, although it is not clear that LFA passengers were responsible. And even if they were, it does not matter – because occupancy increased, enough to push up revpar as well. 

 

Airlines have always been an important element in making resort destinations successful. But it is now LFAs that can now make a resort work, and not regular airlines.
Asia is probably ready for a third international resort destination – partly because of the tsunami – so which will it be? 

 

Current ones are
Bali and Phuket. Others, such as Langkawi,
Lombok, and Koh Samui, have not made it, and neither have Pattaya and
Penang. (
Goa is in a region that attracts a different geographical market, but
Sri Lanka, post-tsunami, may change.) 

 

Longterm pretenders have been
Hainan (around Sanya) in
China, and Boracay in the
Philippines. Both those are getting a boost with respected hotel names – particularly
Hainan, with Hilton, Kempinski, Marriott, Shangri-La, and Sofitel, and Shangri-La in Boracay. 

 

Neither resort has LFA support – but watch
China. When LFAs get into
China or
Hong Kong – which surely will be before year-end? – then
Asia’s world will change again. 

 

Link that to another of my year-end expectations – exit visas for individual travellers from China to Malaysia, Singapore, and Thailand – and that should keep the region’s hotel developers busy for a couple of years. 

 

end

Easy: Bottom’s up?

 

FOXTROTSFox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.  Foxtrots – leading the industry in a dance. 

2006 September 10

 

Easy: Bottom’s up? 

The Easy Group, one of the companies behind the successful Easyjet low-fare airline, has opened its first Easy Hotel. Unfortunately, because it has been promoting the Easy Hotel name for some time – but as a retailer with merchant rates at selected hotels – take off of its own-brand hotels may be slowed. 

 

Then again, the product will likely attract a lot of attention in the marketplace. The new Easy Hotel in
London is owned and operated by the group; a second, franchised, is due this September, in
Basle, Switzerland, an Easyjet base. 

 

I like the description of its
London hotel rooms – small, very small, and tiny – if only as a counter to the absurd position in the rest of the hotel world, where a standard room is defined ‘superior’. 

 

Rooms in
London are indeed small (6-7sqm; yes, really), with lowest advance-booking rates near US$40 including tax – but not including service charge (which comes in the form of a US$20 charge for cleaning the room at the end of the stay). Only three of the 34 rooms have windows. 

 

I have no problem with some of these concepts – such as size and windows. But the room cleaning system is bad, because the guest has no choice – so it is really a partly-hidden extra. Not like on Easyjet, where you can buy your food inflight, or bring your own.  

 

Using a phrase over-used by low-fare airline management, Easy’s
London hotel prices are a rip-off. Accor’s budget brands have rates in
Paris lower than Easy in
London. Its rooms are three times larger, they sleep at least three, TV is free (Easy charges), and they have windows – three-three-free? 

 

Proposed rates for Easy’s
Basle hotel – under US$20 – would be fairer for
London. But London’s rates should be US$10/room for advance booking – say up to two months – going up to its full rate, around US$65 for late booking or peak periods, although that also looks high. And as with low-fare airlines, name and date changes should be allowed, but charged, with rates available at the time of change. 

 

end