Continuing my extensive coverage of developments in the lodging industry, here's a story about the new wave of hotel collections. So-called soft brands are a way for mega-hotel companies to incorporate some originality and individuality into the mix. This article appeared in the October issue of Lodging Magazine.
The Soft Sell
THE INDEPENDENT HOTEL’S GUIDE TO SOFT BRANDS
More and more travelers today, especially the younger generation, prefer independent hotels with a touch of moxie to cookie-cutter alternatives. But as more hotels declare their independence, it can be increasingly difficult to get noticed in an ever-competitive landscape. Enter the concept of membership in a hotel collection.
Within the past few years, nearly every major hotel company has added a soft brand collection to its portfolio. Neil Cantor, head of the Choice Ascend Hotel Collection, points out that the scrum in the space is caused by "chains that want to be where the consumer is." From an owner's perspective, being part of a soft brand collection has a multitude of advantages, not the least of which are maintaining autonomy while increasing visibility and access to resources. Guneet Bajwa, managing principal of Presidio Companies, is working with Starwood's Luxury Collection on a soon-to-open resort in St. Helena, Calif. "Soft brands give owners the freedom to provide a unique experience without being boxed in by standards," he explains. Jay Patel, co-owner of Wintergreen Hospitality, says the entry of the Franklin Hotel in Chapel Hill, N.C., into Hilton's Curio Collection, "gave us an immediate presence on a global landscape that you could only dream of on your own." That was because of the connection to strong global sales and marketing channels, prodigious guest loyalty programs, reservations and customer care systems, and revenue management and back-of-house processes.
Another benefit is easier access to financing, explains Jim Brady, developer and owner of The Press Hotel in Portland, Maine, which recently joined Marriott's Autograph Collection. "There's no question about it," Brady says. "Having the big red M is a very important factor to lenders. It's like a Good Housekeeping seal of approval."
Independent hotels can also gain access to the training programs offered by bigger brands, says Scott Sussman, the hotel and marketing director of The Peacock Inn in Princeton, N.J., an Ascend Hotel Collection member. "Learning is a big bonus of belonging to Ascend," Sussman says. "In addition to training, we can go to conventions and have the ability to network with other hoteliers and share best practices."
Then there's the matter of sheer buying power. The savings achieved through being part of a collection can be substantial. Aside from economies of scale in terms of guest supply and intranet purchasing, Sussman points out that affiliation with Choice's Ascend gives his hotel better negotiated rates with online travel agencies and lower credit card fees.
So, for the independent, it may seem the best of all worlds. But not all independents may be cut out for collection life. According to a number of owners, a fitting hotel should have a strong streak of personality and a unique presence in its market. Samuel Leizorek, managing partner of Las Alcobas Mexico City, which joined the Luxury Collection earlier this year, says being part of a soft brand requires the dedication of a hands-on owner. "Owners who might want this have to be highly involved in the day-to-day management of a property...people who retain the soul of an innkeeper and manage a property with great attention to details," Leizorek explains. Jon Cummins, president of Amerimar Enterprises, the management company for St. Ermin's Autograph Collection Hotel in London, agrees it's a proposition for an active owner. "You are responsible for creating and furthering your own individual brand and identity," he says.
For collection candidates, the next step is selecting the right brand. To achieve the right fit, Press Hotel's Brady says it's important to evaluate the local marketplace. "Look at the competitive landscape in your own backyard," he says. "Look at supply/demand dynamics in the market and make cost/benefit decisions based on that."
It's also important to peer into the future. If an owner is involved in buying and selling, length of contract might be a huge factor, says Scott Kucinski, vice president of operations and investor relations for Sotherly Hotels. "REITs, for example, may not want to be encumbered by lengthy and expensive franchise agreements, which can make a sale more difficult," he notes. Sotherly partnered with Preferred Hotels for its historic Georgian Terrace property in Atlanta because the brand offers a lower fee structure than many of the new collections and a shorter contract length, Kucinski explains.
Then there's that fee structure itself. Some collections take a set percentage of all revenue. Others base percentages only on room revenue. Rabin Ortiz, general manager of Copamarina Beach Resort in Puerto Rico, says he likes the fact that the BW Premier Collection takes its percentage "solely from reservations made through Best Western channels versus a straight revenue cut. In other words, we only pay for the business Best Western drives to us."
In the end, choosing a collection may also be about the company you keep. Richard T. Widman, president of Charming Inns, owner of Wentworth Mansion in Charleston, S.C., appreciates being part of a collection of hotels that have unique personalities yet share the same high standards. "What appeals to us as part of Small Luxury Hotels is that although the properties are very different, the level of quality and luxury across the brand is consistent," Widman says. "As the number one luxury hotel in our market, we want to be associated with similar properties around the world."
More and more travelers today, especially the younger generation, prefer independent hotels with a touch of moxie to cookie-cutter alternatives. But as more hotels declare their independence, it can be increasingly difficult to get noticed in an ever-competitive landscape. Enter the concept of membership in a hotel collection.
Within the past few years, nearly every major hotel company has added a soft brand collection to its portfolio. Neil Cantor, head of the Choice Ascend Hotel Collection, points out that the scrum in the space is caused by "chains that want to be where the consumer is." From an owner's perspective, being part of a soft brand collection has a multitude of advantages, not the least of which are maintaining autonomy while increasing visibility and access to resources. Guneet Bajwa, managing principal of Presidio Companies, is working with Starwood's Luxury Collection on a soon-to-open resort in St. Helena, Calif. "Soft brands give owners the freedom to provide a unique experience without being boxed in by standards," he explains. Jay Patel, co-owner of Wintergreen Hospitality, says the entry of the Franklin Hotel in Chapel Hill, N.C., into Hilton's Curio Collection, "gave us an immediate presence on a global landscape that you could only dream of on your own." That was because of the connection to strong global sales and marketing channels, prodigious guest loyalty programs, reservations and customer care systems, and revenue management and back-of-house processes.
Another benefit is easier access to financing, explains Jim Brady, developer and owner of The Press Hotel in Portland, Maine, which recently joined Marriott's Autograph Collection. "There's no question about it," Brady says. "Having the big red M is a very important factor to lenders. It's like a Good Housekeeping seal of approval."
Independent hotels can also gain access to the training programs offered by bigger brands, says Scott Sussman, the hotel and marketing director of The Peacock Inn in Princeton, N.J., an Ascend Hotel Collection member. "Learning is a big bonus of belonging to Ascend," Sussman says. "In addition to training, we can go to conventions and have the ability to network with other hoteliers and share best practices."
Then there's the matter of sheer buying power. The savings achieved through being part of a collection can be substantial. Aside from economies of scale in terms of guest supply and intranet purchasing, Sussman points out that affiliation with Choice's Ascend gives his hotel better negotiated rates with online travel agencies and lower credit card fees.
So, for the independent, it may seem the best of all worlds. But not all independents may be cut out for collection life. According to a number of owners, a fitting hotel should have a strong streak of personality and a unique presence in its market. Samuel Leizorek, managing partner of Las Alcobas Mexico City, which joined the Luxury Collection earlier this year, says being part of a soft brand requires the dedication of a hands-on owner. "Owners who might want this have to be highly involved in the day-to-day management of a property...people who retain the soul of an innkeeper and manage a property with great attention to details," Leizorek explains. Jon Cummins, president of Amerimar Enterprises, the management company for St. Ermin's Autograph Collection Hotel in London, agrees it's a proposition for an active owner. "You are responsible for creating and furthering your own individual brand and identity," he says.
For collection candidates, the next step is selecting the right brand. To achieve the right fit, Press Hotel's Brady says it's important to evaluate the local marketplace. "Look at the competitive landscape in your own backyard," he says. "Look at supply/demand dynamics in the market and make cost/benefit decisions based on that."
It's also important to peer into the future. If an owner is involved in buying and selling, length of contract might be a huge factor, says Scott Kucinski, vice president of operations and investor relations for Sotherly Hotels. "REITs, for example, may not want to be encumbered by lengthy and expensive franchise agreements, which can make a sale more difficult," he notes. Sotherly partnered with Preferred Hotels for its historic Georgian Terrace property in Atlanta because the brand offers a lower fee structure than many of the new collections and a shorter contract length, Kucinski explains.
Then there's that fee structure itself. Some collections take a set percentage of all revenue. Others base percentages only on room revenue. Rabin Ortiz, general manager of Copamarina Beach Resort in Puerto Rico, says he likes the fact that the BW Premier Collection takes its percentage "solely from reservations made through Best Western channels versus a straight revenue cut. In other words, we only pay for the business Best Western drives to us."
In the end, choosing a collection may also be about the company you keep. Richard T. Widman, president of Charming Inns, owner of Wentworth Mansion in Charleston, S.C., appreciates being part of a collection of hotels that have unique personalities yet share the same high standards. "What appeals to us as part of Small Luxury Hotels is that although the properties are very different, the level of quality and luxury across the brand is consistent," Widman says. "As the number one luxury hotel in our market, we want to be associated with similar properties around the world."
