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and we need to deliver on that

Time:2019-06-29 17:48Underwear site information Click:

Brands viable Budget keep resilience

NEW YORK—With an evolving guest profile and expanding ownership interests, economy hotel brands are enjoying a growth period right now, according to brand executives.

Speaking on a panel titled “Economy: The in place to be?” at the recent NYU International Hospitality Industry Investment Conference, executives from G6 Hospitality, InterContinental Hotels Group, Meininger Hotels, Wyndham Hotels & Resorts and RLH Corporation talked about the returns and resiliency that characterize today’s budget-conscious hotel brands.

Product evolution
“I think the most significant change we’ve all seen is the dynamic evolution of the product,” said Lance Miceli, EVP and chief marketing officer of G6 Hospitality, which owns the Motel 6 and Studio 6 brands. “There’s absolutely no shortage of high-caliber design and guest-facing functionality, and that applies not only to the physical asset, but also to the technology assets and technology environment.”

Chip Ohlsson, EVP and chief development officer, North America, for Wyndham Hotels & Resorts, added lower-segment brands don’t need to be excluded from the trend of lifestyle hotels.

 and we need to deliver on that

 

“Every hotel is in the lifestyle sector. Every customer has a lifestyle they adhere to, and we need to deliver on that,” he said. “Whether it’s Motel 6 or some of our (Wyndham) brands or Avid … it’s interesting to see that evolution from a homogenized ‘how cheap can I get it?’ approach to one of ‘how much value am I bringing in?’”

Karen Gilbride, head of Avid Hotels for IHG, pointed out that while Avid sits in what she called the lower-midscale segment, the brand grew out of similar needs to provide a lifestyle experience at a lower price point.

She said that customers have evolved to expect quality design at a lower cost, and hotels have had to keep up.

“Look at Ikea and Trader Joe’s and Southwest Airlines—all these companies showing that regardless of price point, you can have a high-quality, fresh and modern experience,” she said. “Guests looked at hotels and asked, ‘Why do I have to pay more to experience that?’”

Hannes Spanring, CEO of Meininger Hotels, said “certain basics need to be fulfilled, even in the budget sector,” and guests have evolved to expect experiences at all price points that include good design, cleanliness and safety.

Miceli said budget-sector hoteliers have another advantage in that guests today are more self-sufficient and may not need as many bells and whistles from the hotel product itself, largely thanks to technology. As long as hotels have strong Wi-Fi capabilities, he said guests can stream their own TV and movies, and order food they like via online delivery services, such as Grubhub.

Amenity creep?
Many budget-conscious brands make design and amenities a priority, but amenity creep worries must be front-of-mind, the panelists said. The key to that is having a laser-focus on yield, Miceli said.

“Unless you can yield it, is it really viable to put in the room?” he asked.

Paying constant attention to what’s necessary and what isn’t keeps these costs in check, speakers said.

Meininger Hotels, which Spanring described as a “hybrid brand” of traditional hotel-style rooms mixed in with multi-bed rooms, went through an exercise several years ago that proved this point.

“About seven years ago, we included breakfast in the rate, and it was not that appreciated. We stopped free breakfast and offered it for a fee, and suddenly it was way more appreciated,” he said.

Now, the brand concentrates on great amenities in shared public spaces, and even considers a future where guests “may not even need televisions in their rooms, because they stream everything on their devices anyway,” he said.

Paul Sacco, EVP and president of global development for RLHC, said good Wi-Fi now is more important than any other amenity, noting results of an RLHC guest survey which showed that “Wi-Fi was 64% more important than a change of clothes.”

“People would rather do without clean underwear than Wi-Fi in their rooms,” he said.

Construction vs. conversion
Underwriting new construction in the economy space is a big consideration, speakers said, and all agreed that many current economic factors support new-builds and conversions.

Sacco, whose company does some new-construction in the economy space, said there’s a fair amount of “economic opportunity” for it.

“There’s a lot of new supply in upscale right now, and you have to be careful in a lot of markets, when you’re underwriting, if there are maybe five or so upscale projects coming in and competing with each other,” he said. “So sometimes you notice there’s an opportunity to build something at a lower (level) that you can build very nicely, that guests want and can offer a lower rate, and (the owners) don’t get as hurt in the down cycle.”

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