A Space of Possibilities

Hotel CEOs on Technology and Business

2012-02-12T04:00:00.000-08:00

Richard Solomons of InterContinental Hotels; Steve Joyce, Choice Hotels; Bill Marriott, Marriott Hotels; Eric Danziger, Wyndham Hotel Group; Hubert Joly, Carlson.

Hotels face new challenges as theycontinue to recover from the recession, including tech-savvy, Web-surfingtravelers who have different expectations as guests than do prior generations.

USA TODAY assembledfive of the industry's top executives last month at the Americas LodgingInvestment Summit in Los Angeles in the LALive JW Marriott hotel for a discussion of the industry's latest developments.They were: Marriott International CEO J.W. "Bill" Marriott Jr.;InterContinental Hotels Group (IHG) CEO Richard Solomons; Carlson CEO HubertJoly; Choice Hotels CEO Steve Joyce; and Eric Danziger, CEO Wyndham HotelGroup.

The discussion rangedfrom hotel Internet fees to iPad apps, new lobbies and chainwide hotelrenovations. The hour-long event was moderated by USA TODAY's Barbara DeLollis . The text has been edited for clarity and length.

USATODAY: Internet access is a top amenity for travelers. With the iPadrevolution, bandwidth use is growing at a faster pace. What are you doing inresponse?

Marriott: Well, we'reworking to try and get down to a few (Internet) suppliers, because in the pastwe had a bunch of suppliers, like 80 or 90. We have 3,700 hotels and everyone'shired their own supplier, so we're trying to narrow the number so we canincrease bandwidth and improve the service. It's a huge problem. Everyone wantsto talk in the room and they want to download everything they can. It's gettingto be quite a challenge.

Solomons: I also thinkwe're going to have to look at things like differential charges. (Forinstance,) basic wireless you could get for free and maybe you pay more forhigh speeds so people who really want it can get it. We all see it as an issue.It's one of the big dissatisfiers that you see in a lot of hotels.

Joyce: Free Internetis the greatest demand in terms of amenities of the travelers. It's almost likehaving water or air conditioning in the room. So we have a strategy of offeringthis for free at an increasing cost (to hotel owners).

Danziger: We offer it forfree in most of our brands, though not all of them. But whether you charge orwhether it's free, you'd better have some dependability and reliability becauseit will become the single source of complaints. By the way, truck drivers whostop at Super 8 are using mobile devices, soit is widespread.

Joyce: We have beenfree for a long time. It is interesting that the last remaining places wherehotels are getting away with charging for it are at the upper-upscale andluxury levels. I think the expectation is that it should be provided free.

USA TODAY: Canoffering free Wi-Fi help differentiate a hotel chain from others?

Solomons: The question isnot whether (free Internet) becomes a differentiator. I think the bigger issueyou're going to see is the small chains or the unbranded hotels are going tofind it just continually harder to compete. You see sales of iPad devices andmobile are up, so (providing free Internet) is very hard if you're a smallplayer.

USA TODAY: Howhas the iPad revolution changed the way travelers book rooms?

Joyce: We were outreally quickly trying to chase the iPhone user and then the Droid user.Business from mobile reservations is up 255% this year. But the interestingthing is it's not mobile or PDA, it's iPads, so we're scrambling to get an iPadapplication out in a month or so. Our customers used to drive down the road,read a billboard and pull over someplace. Now they're looking at an app, andthey're evaluating the seven different hotels within 7 miles. They're lookingat the price and looking if they can drive another 20 miles, if they can save $5.If we're not on the device they're using to book, we're not visible.

USA TODAY: Allof your companies — excluding Carlson — recently invested in Room Key, a newhotel search site. Why do you think customers want another online choice?

Marriott: It's anopportunity for you to go the on Web in the search engine, see a variety ofbrands and then pick the one that you want to go to and go directly to it. Inour case, when you do, if you go to Marriott through the Room Key searchengine, you get your Marriott Rewards points.If you go through Expedia or another site, you don't, so that is an advantageto the customer.

USA TODAY: It's gettingeasier for travelers to find customer reviews on your websites, whether fromTripAdvisor or your guests. How is your company embracing this trend?

Joyce: On any shoppingwebsite, be it sporting goods or electronics, you have that readily available.On Amazon.com they have tons and tons of comments. This is the nature of theInternet, where information is pervasive. Ignoring it is like you're trying tostop the tide with your two hands.

Danziger: We're going tohave TripAdvisor (reviews). The consumer wants it. We know that 40% to 60% goto TripAdvisor.

Solomons: We are movingto reviews on our site. It makes a lot of sense. It's what consumers want.

USA TODAY: Isthere any other benefit to having customer reviews on your site?

Danziger: There is a sidebenefit. Ultimately, I believe the quality of the product will improve(because) now you have direct feedback from a consumer to an owner or managerthat you must respond to.

Joyce: When youstruggle to see how you're going to engage customers, this is one thatresonates most. It causes some unique issues, so we actually went out with atrial two, three years ago and put our own customers' reviews — notTripAdvisor's. We are now going back and looking at a combination. It was clearour reviews by themselves were not sufficient.

USA TODAY: Whenwill travelers be able to use smartphones to unlock a hotel door?

Joyce: We're workingon it. Clearly you will check in and be able to enter your guest room in fiveyears from your PDA.

USA TODAY: Manyof you talk about customizing the hotel experience to a specific audience. Isthat the next trend?

Joyce: I actuallythink for the next several years, value is much more important thancustomization. I don't know any segment of the business where people aren'tdemanding more value, and I think that will remain until people feel like theyhave recovered their wealth, which is going to be 10 years from now. It's freeInternet, free parking, free breakfast and other services they want but don'twant to pay additional for.

USA TODAY: Canyou point to a requirement that customers don't want to pay for?

Danziger: I'll give you agoofy one. I always wondered why it was a brand standard in most mid- andupscale hotels to have a bathroom phone. Is that something that customers saymakes a difference? To me, I'm not touching the phone in the bathroom, andwouldn't that money be better spent on giving customers something they reallywant? A complete review of brand standards came as a result of the downturn, andit's to the consumers' benefit.

USATODAY: Another since the recession?

Marriott: One of thethings we're trying to do is have our manager at the front desk at check-in andcheck-out greeting customers, thanking them for their business so there's a managerpresent who wants to take care of the customer on a personalized basis. Weencourage that.

USA TODAY: Hotelrates are projected to rise this year, but will we see them riseeverywhere?

Joyce: The gatewaycities are going to be a place where rates are going to continue to rise. Ifyou look at the trends, particularly business travel, what's growing faster in2012 is international travel. That tends to hit the gateway cities.

Marriott: There are a lotof so-called gateway cities that are not getting a rate increase, such asWashington, D.C. Government is cutting back. Congress is in session three weeksa month instead of four.

Joyce: What you'reseeing is the elimination of a lot of discounts, so you'll have a shift thatchanges the overall rate that's paid. But the reality is, we're not seeing anymarkets where hotels are making very aggressive price increases.

USA TODAY: Astravel rebounds, will you add back jobs?

Marriott: It depends onthe demand of the particular hotel. We're not adding back people just becausethings are going better. But there are cases, such as this conference here inLos Angeles. We're staffed up, but after you guys leave, there won't be manypeople.

Solomons: We learned, aswe do in every downturn, how staff can be more efficient through multitasking.In some places, we've seen staff engagement go up and service go up becausepeople have taken on more roles. The other thing to remember is that for a lotof owners, they have rising energy costs, rising people costs … so I don'tthink you're going to see massive increases in employment because the top lineis going up.

USA TODAY: Manychains, including Marriott, are reinventing their lobbies to make theminviting, social places. Do guests like the new look?

Marriott: The feedback isterrific, because it's an opportunity to socialize, have something quick toeat, sit in the lobby and work on your computer. At this hotel here (LA Live),you look at the people in all their little pods and areas talking, meeting,visiting and eating. It's a socialization of the lobby, which has neverhappened before in our industry, because people used to go in the lobby, checkin, check out and then leave. Today, they're all over the lobby, and they'recoming back to the hotel and using the lobby for a drink afterward.

Source:Robert Hanashiro, USA TODAY

Anonymous hacks CIA website

2012-02-12T02:00:00.000-08:00

The website of the Central Intelligence Agency wasinaccessible on Friday after the hacker group Anonymous claimed to have knockedit offline.

"CIA Tango down," a member of Anonymous said on@YourAnonNews, a Twitter feed used by the group. "Tango down" is anexpression used by the US Special Forces when they have eliminated an enemy.Likecia.gov, the camimex.org.mx site was unavailable on Friday.

Attempts to access the CIA website at cia.gov were unsuccessful.

More than two hours after the initial attack on the site attempts by AFP to reach cia.gov were met with a message saying the Web page was not available.

Asked about the apparent website outage, a CIA spokeswoman said: "We are aware of the problems accessing our web site, and are working to resolve them."

Members of Anonymous also claimed Friday to have hacked the website of Camimex, the Mexican chamber of mines, and posted emails taken from the site online.

Anonymous last month briefly knocked the websites of the USJustice Department and the Federal Bureau of Investigation offline.

Those attacks were in retaliation for the US shutdown offile-sharing site Megaupload.

There was no immediate explanation from Anonymous for thetargeting of the CIA site.

In June, an Anonymous-affiliated group, Lulz Security, alsotemporarily disabled the CIA website.

Most Anonymous cyberattacks are distributed denial ofservice attacks in which a large number of computers are commanded tosimultaneously visit a website, overwhelming its servers.

Fraud Risk in the Hospitality Industry

2012-02-10T22:00:00.000-08:00

Iam not sure how high Fraud Risk figures in hotel companies risk registers butsurely the recent report on the survey conducted by PKF(UK) LLP and the Centre of Counter-Fraud Studies at PortsmouthUniversity is alarming, in that a conservative estimate brings the losses fromfraud of the UK leisure, travel and transportation sectors at approximate £2billion only for 2011.

According to PKF’s “The Resilience to Fraud of the UK Hotel Sector” the reasons for the losses are many,as are the solutions to create better fraud resistance throughout the sector. Byfraud, the researchers refer to both back-of-the-house transactions (e.g., payroll, procurement of goods andservices) and front-of-house fraud (e.g., credit card transactions). Across theUK economy as a whole, the Government’s National Fraud Authority estimates that£38.4 billion is lost to fraud. Hotel companies performed best in the

The findings indicate that in the vast majorityof the cases fraud is suspected but no measures are being taken to define itand counter it. More specifically the study showed that:

Only 30% of the respondents sought to estimatethe cost of fraud or used losses estimates to make judgements about how much toinvest in countering fraud
Only 23% reviewed the effectiveness of counterfraud work
35% ensured that counter fraud staff regularlyrefreshed their skills
88% stated that they had a zero-tolerance approachbut only 38% monitored the development of anti-fraud cultures (a worryingcontrast between rhetoric and reality)
Less than 40% deployed analytical intelligencetechniques to detect fraud

On the brighter side of the issue:

88% of respondents indicated that they had adopteda ‘zero tolerance’ approach
85% indicated that they had arrangements in placeto ensure that suspected frauds were promptly reported
85% also indicated that they considered applyingall types of sanctions where fraud was found to be present
Over 76% had a clear policy on the applicationof sanctions
69% had reports concerning fraud discussed atboard level

The report shows that there is still a lot to bedone in terms of mitigating this risk and concludes:

"Fraud is a problem which undermines the stabilityand financial health of organisations from across the economy.

Fraud is not avictimless crime, but one which denies us the quality of housing which UKtenants deserve and could otherwise have.

It also piles additional costs on usas consumers, undermines our job security as employees, reduces the value ofcompanies for us as shareholders, and even denies the beneficiaries of charitiesthe full benefit of the donations which we make."

Amid Murders, Mexico Quietly Thrives

2012-02-10T00:29:00.000-08:00

If Mexico's drug violence is so relentless and gruesome, then whyare Marriott, Hilton, InterContinental and other hotel chains piling into themarket?

Largely because tourists and businesstravelers keep piling in too. Shootouts notwithstanding, Mexico is benefitingfrom a tide that is raising many boats around the world. The globe's newnouveau riche are going to Mexico to vacation, taking vodka to Veracruz andkung pao to Cancun. And international companies continue to build factories inthe country, albeit sometimes more slowly than before.

If Mexico's drug violence is so pervasive and gruesome - and itis gruesome - then why are Marriott, Hilton, Intercontinental and other hotelchains piling into the market? John Bussey has details on The News Hub.

Mexico, in other words, is reaping thebenefits of globalization. Companies have figured that out, and they are makinga bet: Long term, those benefits will transcend the country's current violentconvulsion.

And that's likely a good bet to make.

The last five years have clearly beenrough for Mexico. More than 50,000 people have been killed in the explosion ofviolence tied to the country's warring drug cartels. The headlines capture thesavagery. "Fifteen Beheaded in Acapulco"; "Deaths of AmericansRaise New Concerns Over Mexico's Drug War"; and "Dismembered BodiesFound All Over Juarez."

U.S. officials have wondered aloudabout the stability of Mexico. Think tanks have flirted with the term"failed state." Last April, the State Department expanded its alreadyextensive travel warning for anyone venturing to the country.

But despite all those troubles, herecome the hotels.

"Mexico is an important strategiclocation for IHG, and the company works with franchisees to develop hotels forthe long term," says Stephen Boggs of InterContinental Hotels Group, whose brandsinclude Holiday Inn. IHG expects to launch 46 new hotels in Mexico by the endof 2014. It has 120 in Mexico now.

Marriott says its new Courtyard Mexico City Airport Hotel opens inMay and is aimed at the business traveler. It has 19 properties in Mexico, withnine more scheduled to open by 2016.

And the new DoubleTree by Hilton nearthe Mexico City Airport opens next fall. Hilton Worldwide has 23 hotels andresorts in Mexico. It is planning a 35% expansion.

The list goes on.

Mexico is banking on tourists fillingthose rooms, especially new ones from developing economies such as Brazil,China and Russia.

The country is still ranked 10thglobally in the number of visitors it receives, and it is still the mostpopular destination for Americans, who account for the vast majority of tourismvisits.

The trend line is also looking up. Evenafter periods in which hotel rooms went vacant and cruise ships canceled portcalls, tourism picked up at the end of 2011. The government believes 2012 willbe a record for the sector, which accounts for 9% of GDP.

Expedia says it has seen a surge intravelers to Mexico from emerging markets. They are travelers who like tospend. The average Russian will stay nine nights compared with an American'sthree and a half.

And whereas the American might spend$1,000 a week, the Russian will drop that in a day on spa treatments at LeBlanc and the wine cellars of Cancun, says Gloria Guevara, Mexico's tourismsecretary.

Mexico is chasing that new business. Ithas opened or is planning to open tourism promotion offices in Beijing, Seoul,Moscow and Brussels. It has simplified its visa-approval process. And it hascounseled hotels and tour operators on what this new global audience wants in aMexico vacation (Chinese: archeology. Brazilians: shopping. Russians: bling.)

As for the drug violence? "We saythat those are very selective locations in Mexico," often near the borderwith the U.S. and far from the tourist centers, says Gerardo Llanes of theMexico Tourism Board.

"That isn't all Mexico," hesays in a phone conversation from China, where he is pitching Mexico.

But the violence has spilled intostoried Acapulco, and visitors can no longer drive the country, as they mighthave years ago, without navigating around new danger zones.

What's more, much can still go wrongwith Mexico's optimistic plans. The drug wars could worsen, and unemploymentand instability could, too.

For the moment, though, Mexico's focuson tourism is bearing fruit, a reflection of the broader engagement the countryhas with the global economy. That engagement is the backbone of Mexico'seconomic growth, particularly in manufacturing.

In addition to its trade pact with theU.S. and Canada, Mexico has dozens more trade and investment treaties withother countries. Corporate investment continues to flow in—$18 billion offoreign direct investment in 2010 alone, a large chunk of that from the U.S.

Many of those international companiesoperate behind security fences in the region bordering the U.S.—the thousands ofmaquiladoras that employ hundreds of thousands of Mexicans.

And like the hotel chains, they allcontend daily with the array of problems vexing developing markets like Mexico.But they have nonetheless taken a stake in Mexico's future because the countryis a cheap place to make things, with easy access to the U.S. market.

That's a big, stabilizing counterweightto the chaos of the drug wars.

That's the upside of globalization.

Source: John Bussey, Wall Street Journal

BDRC survey shows Hilton and Marriott s the US market leaders

2012-02-09T00:41:00.000-08:00

An optimistic outlook is more appropriate for the United Stateshotel industry than for the U.S. itself, according to a new survey by BDRCContinental.

Despite a weakening dollar, increasing national debt and “thecrisis in the eurozone,” the consultancy says there will be no second “hotelrecession” in 2012 like the one that hit U.S. lodging in 2010.

These findings are based on online interviews with 2,104 businesstravelers and 2,113 leisure guests who stayed in chain or star-rated hotelswithin the past 12 months. Fieldwork was conducted in July and August 2011.BDRC conducted a poll only for U.S. business travelers in 2008. This is itsfirst covering the leisure guest.

The key conclusion of BDRC’s 434-page “US Hotel Guest Survey2011”:

Hilton Hotels & Resorts is market leader for business travelers, while Marriott Hotels and Resorts grabs the ring for leisure guests. The market leader combining the sectors is Hilton.

“In no other market across the globe do we see as tight a race forthe No. 1 spot on brand equity as in the U.S. between Hilton and Marriott,” TimSander, BDRC’s head of hotel brand monitoring, said in an email from the Londonheadquarters. “Overall there is quite a gap between these two and the nextplayer, Holiday Inn, even though Holiday Inn does interfere in this two-branddominance amongst leisure travellers.

“Curiously, neither Hilton nor Marriott make it into the top 10 onintent to recommend, which may imply that they are safe bets but need someoutstanding attribute or trait that make users want to recommend them more,”Sander continued. “Non-deluxe brands find it generally harder to achieve ashigh recommendation scores as upscale players but there are some notableexceptions, Wingate being one of them.”

Other key findings from the survey include:

Business travelers favor upper, full-service brands while budget brands are the segment for the “more cost-conscious leisure traveler.”
Loyalty programs are growing faster in the U.S. than in other markets, with leisure travelers showing particularly “high engagement.”
About one in six U.S. travelers is from Generation Y, which is the most likely demographic to travel internationally. Gen Y also is most prone to use social-media websites, checking them more than once a day.
Internet search engines and hotel websites are the most frequently used information channels, suggesting hotels and chains should invest in and improve them continuously. There is opportunity, particularly regarding Gen Y, for a hotel brand to become a social-media engagement leader. Key target: Gen Y women by way of the smartphone.
The expectation of free Wi-Fi is growing more widespread, and more than half of all travelers likely would choose a hotel that offered it, assuming all other criteria were met.

Brandranking

As it did in 2008, Hilton ranked first amongbusiness travelers, followed by Marriott, Holiday Inn, Ritz-Carlton, BestWestern, Courtyard by Marriott, Embassy Suites by Hilton, Hyatt/Hyatt Regency,Sheraton and Holiday Inn Express. The bottom five: “any Radisson,” Doubletreeby Hilton, Motel 6, Renaissance and Staybridge Suites.

The top 10 brands in leisure: Marriott, Holiday Inn, Hilton, BestWestern, Disney, Ritz-Carlton, Four Seasons, Holiday Inn Express, ComfortInn/Suites and Days Inn. The bottom five: Hampton Inn & Suites, GrandHyatt, Sheraton, Hilton Garden Inn and La Quinta Inn/Suites.

The top 10 in combined ranking: Hilton, Marriott, Holiday Inn,Best Western, Holiday Inn Express, Comfort Inn/Suites, Courtyard by Marriott,Embassy Suites by Hilton, Ramada, and Hyatt/Hyatt Regency. The bottom five:Hilton Garden Inn, Doubletree by Hilton, “any Radisson,” Four Seasons and LaQuinta Inn & Suites

Demographics and the bigger picture

In the U.S., 73% of business travelers are men, though 45% of GenY business travelers are women. The average age is 39, with one in six olderthan 55. The share of frequent stayers has grown, but this group has cut backon the number of nights they spend at a hotel. Conferences, training coursesand seminars are the key reasons for such travel.

Fifty-one percent of leisure travelers are women, 43% are membersof loyalty programs, and the average age is 41. Just over a quarter of leisuretravelers have made a trip of five nights or more. Such travelers are far morelikely to patronize budget brands than their business counterparts. Just morethan half of such travelers make online reservations through hotel websites,rising to seven of 10 frequent stayers.

On a macro level, BDRC says the U.S. hotel market is doing betterthan the country’s overall economy, noting more than 58 million travelersvisited in 2010, spending more than US$110 billion.

“Tourism industry pressure groups are currently campaigning formore visa-waivers to increase further the number of visitors,” the report says.“After the government cut visa fees to South Korea, 54% more Koreans traveledto America the following year.” (In a 19 January address at Disneyland in Orlando, Florida,President Obama pledged to expand the U.S. Visa Waiver Program, calling on theSecretaries of State and Homeland Security to develop an appropriate planwithin 60 days.)

Although BDRC says the U.S. is unlikely to retain its position asthe world’s largest economy much longer because of global competition, highunemployment and a large national debt, its hotel industry is doing fine. Oneindicator: Those loyalty programs in which more than 65% of U.S. business travellers participate. “Almost two in five business travelers have convertedtheir points gained into a leisure trip,” the report says. “This is up 10% on2008, so perhaps reflects some optimism returning as the economy recovers.”

Waldorf Astoria is the brand most likely to inspire loyalty,followed by Ritz-Carlton, St. Regis, Four Seasons and JW Marriott. The bottomfive are Motel 6, Microtel Inn & Suites, Econo Lodge, Super 8 andTravelodge.

Source: Carlo Wolff, HotelNewsNow

JW Marriott hotel in Dubai to become the world's tallest hotel

2012-02-08T00:50:00.000-08:00

The world's tallesthotel is expected to open on Sheikh Zayed Road in Dubai at the end of the year,taking the title away from another towering property in the emirate.

The Dh1.8 billion(US$490 million) JW Marriott Marquis Dubai, with 1,608 rooms, reaches a heightof 355 metres and is scheduled to open in the fourth quarter of this year, itwas announced yesterday.

At 333 metres tall, Rotana's Rose Rayhaan hotel, alsolocated along the Sheikh Zayed Road, is currently the world's tallest buildingused purely as a hotel.

The JW Marriott Marquis, owned by Emirates Airline, will also become Dubai'sbiggest hotel by number of rooms.

The announcement ofthe opening comes at a time when hotels are reporting improvements in businessin the emirate.

"If you look atthe statistics of passengers and guests coming to Dubai, if you look at thegrowing meeting market worldwide, if you look at all the needs for leisuretravellers, for business travellers, you can have confidence because they aregrowing," said Rupprecht Queitsch, the general manager of the MarquisDubai.

Next door to the newMarriott property, work is scheduled to start in a couple of months ondemolishing the Metropolitan, one of Dubai's oldest hotels, to make way for a$1.33bn development that will include three hotels with a total of more than1,600 rooms.

The Marriott hotel isfocusing on conference business and is hoping to generate a large portion ofits revenues from Europe, North America, Brazil, Russia, India and China.

The property expectsto open its first tower, with 804 rooms, this year, but the remaining rooms inthe second tower will not open for another year and a half.

"The conferencebusiness, and more generally the meetings, incentives, conferences andexhibitions segment, is a business that could be grown as long as there are nobottlenecks related to airlift, hotel-room capacity, meeting-spacecapacity," said Chiheb ben Mahmoud, the head of hotel advisory at JonesLang LaSalle Hotels Middle East and Africa.

"It is probablythe segment that is the most aligned with the Dubai destination's attributes.Large properties can act as a locomotive for the business and negotiate large-scaleevents that require a high level of reliability in terms of service deliveryand logistics."

Saudi Arabia'sFairmont hotel in the Abraj Al Bait tower is sometimes described as the world'stallest hotel - however, Marriott points out that this hotel does not standalone but is in a building that contains other operations.

The number ofvisitors to the UAE is expected to reach 9 million this year, according to aforecast yesterday by Business Monitor International.

Source:Rebecca Bundhun, The National

Wyndham in Top 50 for Executive Women

2012-02-07T09:35:00.000-08:00

Stephen Holmes, Mary Flavey

The US National Association for Female Executives(NAFE) which serves 20,000 women-in-business members nationwide withnetworking, tools and solutions to strengthen and grow their careers andbusinesses has included Wyndham Worldwide in its 2012 list with the Top 50Companies for Executive Women. The list recognizes organizations whose policiesand practices encourage women's advancement and whose numbers at the highestlevels of leadership demonstrate that commitment.

A newly released report conducted by Working MotherResearch Institute showed that at the NAFE Top Companies, women hold nearly onein four positions overseeing divisions with more than $1 billion in revenue,and hold 23% of all board of director seats compared with 16% across theFortune 500. At Wyndham Worldwide, women represent 54% of its total U.S.workforce, 35% of all director-level and above positions, and 28% of its boardof directors.

Following this news, Stephen P. Holmes, chairman andCEO of Wyndham Worldwide stated: "We are proud of this recognition becauseit speaks to our culture, which appreciates diverse backgrounds and experiencesat all levels of our company, and values the ideas and contributions of eachassociate".

The NAFE Top Companies also lead corporate America inrecruiting, retaining and advancing women. Some findings from this year'sresearch include:

22% of executive officers at the NAFE TopCompanies are women compared with 3.6% at the Fortune 500
Women hold 19% of revenue-generating P& L jobs - the pipeline to the CEO position
All NAFE Top Companies offer management orleadership training to women
CEOs at 92% of Top Companies reviewsuccession plans for gender equity

“Providing asupportive environment for women to advance and reach their full professionalpotential is important for Wyndham Worldwide as a company, an industry leader,and an employer,” says Mary Falvey, chief human resources officer and executivevice president at Wyndham Worldwide.

“Our cultureprovides opportunity, recognizes achievement, and supports advancement, whileappreciating the importance of a healthy balance between career and home. Thereis an opportunity for the entire business community to continue makingstrategic decisions to increase diversity in thought, background, and expertisethrough increased women participation in leadership positions, and championfuture women leaders to maintain a strong pipeline of qualified talent."

David Webster to step down from IHG

2012-02-04T01:07:00.000-08:00

David Webster is to stand down as chairman of InterContinentalHotels Group after eight years. Mr Webster, the co-founder and former chairmanof supermarket chain Safeway, is one of the longest standing chairmen in theFTSE100.

Itis understood he informed the board of his decision to depart just beforeChristmas.

Anexternal search is underway and headhunters have been appointed. The seniorindependent director, David Kappler, is overseeing the process on behalf of theboard.

Possiblecandidates to replace Mr Webster include Sir Stuart Rose, the former chairmanof Marks and Spencer, and Allan Leighton, the former Royal Mail chairman.

Oneinternal candidate is thought to exist in the shape of Luke Mayhew, the formermanaging director of retailer John Lewis, who joined Intercontinental as anon-executive director last July.

David Webster was appointed to the Board of IHG in 2003 andbecame the Non-Executive Chairman in January 2004. He is also Chairman of theCompany's Nomination Committee.

Chairman of Makinson Cowell since October 2004, David isalso a Director of the National Life Story Collection since June 2005, a knightof the Order of St John, joined the Board of the Temple Bar Investment Trust inJanuary 2009 and is Non-Executive Director of Amadeus IT Holding SA effectivefrom May 2010.

Prior to this, David was a co-founder, together with thelate James Gulliver and Sir Alistair Grant, of Safeway plc (formerly ArgyllGroup plc) and was appointed Chairman in 1997. He had previously served as theDeputy Chairman and Finance Director. David retired as Chairman in March 2004following Safeway’s merger with Wm Morrison. David was also formerly aNon-Executive Director of Reed Elsevier PLC, and served in the Royal NavalReserve for eight years from 1962 to 1970, latterly as a Lieutenant. Marriedwith three sons, David’s interests are sailing, skiing and military history.

Source: Kamal Ahmed, James Quinn, TheTelegraph

Starwood Ups the Ante with its Loyalty Programme

2012-02-02T03:30:00.000-08:00

Starwood Hotels & Resorts Worldwide Inc. is expanding the benefits it offers its most-frequent customers, part of a continuing race by the world's largest hotel brand companies to generate more business from recurring patrons.

Starwood on Wednesday is enhancing its loyalty program by adding features for frequent travelers, such as rolling 24-hour check-in and check-out times and personal travel assistants, dubbed "ambassadors," company executives said.

Chief Executive Frits van Paasschen said the company is investing around $25 million in the program. Mark Vondrasek, who heads Starwood's loyalty program, said that the money is coming out of the pool of fees paid by hotel owners, but it won't increase costs to owners.

Hotel owners, who usually sign management contracts or franchise agreements with the brand companies, pay a fee—often roughly 5% of the room price—to cover costs for the loyalty programs, as well as the costs of extra meals and other perks provided at the hotel.

The use of the perks will be determined by the frequency of stays, with customers who spend 100 nights a year at Starwood properties qualifying for the highest level of service. Starwood, which owns nine hotel brands including Westin, W and Sheraton, declined to say how many customers stay at its hotels 100 nights or more per year but said the number is "in the low tens of thousands."

"Innovation in our industry isn't another thing, another shower," Mr. van Paasschen said in a recent interview. "It's a relationship to travelers."

Starwood's expansion of its loyalty program comes as the hotel industry competes for repeat travelers and their business, which generates a disproportionate amount of the company's earnings before interest, taxes, depreciation and amortization. The Stamford, Conn.-based company estimates that just 2% of guests drove 30% of EBITDA for 2011. A company spokeswoman said the company expects full-year EBITDA between $980 million and $990 million.

The use of loyalty programs to lure guests has led hotel brand owners to match each other and ratchet up benefits. Programs for the highest frequency guests routinely include complimentary meals and free wireless Internet access and opportunities to generate extra points to spend on hotel rooms.

Hilton Worldwide Inc. will begin allowing its top-tier members, those who stay at least 36 nights, to get automatic room upgrades and other perks, such as breakfast, said Jeff Diskin, who runs Hilton's loyalty program.

Previously, guests had to choose between an upgrade or another perk.

The escalation of perks doesn't always sit well with hotel owners, who say the costs they have to pay for loyalty programs are rising as brand companies expand their offerings. Some owners, many of whom operate competing brands, have complained they don't always see benefits from the programs and don't have a say in the decisions.

"Since we own a bunch of different brands, you're stealing from one hotel to give to another," said Monty Bennett, CEO of Ashford Hospitality Trust Inc., which owns about 125 hotels including Starwood brands and hotels from Hilton, Marriott International Inc.,Hyatt Hotels Corp. and International Hotels Group PLC. "It's just costing more."

Still, many hotel owners say the loyalty programs boost business.

John Belden, CEO of Davidson Hotels & Resorts, says loyalty program customers rose to 54% of occupancy from 31% after he converted a Holiday Inn in Stamford, Conn., into a Sheraton. That, he says, allowed him to charge higher room rates.

"If that's bringing me another traveler I wouldn't have had that is paying a higher rate than I would have been getting from someone else then the cost is relatively insignificant," Mr. Belden said. "I'm going to win on that trade all day long."

Starwood has been quietly testing its changes for around 2½ years under a pilot plan. The program has also focused on mining data of customers by creating more sophisticated tools to better identify people who have the potential to become profitable customers, company executives said.

Mr. Vondrasek said Starwood initially reached out to a few thousand customers and invited them to get the extra perks, such as the personal assistant.

Karen Feeney, who works in the financial-services industry and stays at hotels more than half of the year, said she speaks nearly every day to a Starwood ambassador named Jennifer. The personal travel assistant found her a car when she was stranded in Chicago a couple of years ago and took care of all of the arrangements for her niece's Sweet 16 party, including ordering monogrammed T-shirts, Ms. Feeney said.

During a hurricane on the East Coast last summer Jennifer contacted Ms. Feeney's husband when Ms. Feeney was having trouble reaching him and reported that she was all right.

"I can't think of anything in my life she doesn't do," Ms. Feeney said.

Source: Alexandra Berzon, WSJ

Hubert Jolly on the merger of Carlson with Rezidor

2012-02-01T02:30:00.000-08:00

Marilyn Carlson Nelson and Hubert Joly

Carlson Hotels’ CEO Hubert Joly says the company’s merger with theRezidor Hotel Group will result in a “more consistent alignment” of itsportfolio of brands and the “continued growth” of properties around the world.

Speaking exclusively to SPICENEWS, Joly says it’sexciting time for the newly combined company, now named the Carlson RezidorHotel Group, as it aims to generate almost half a billion US dollars revenueand a RevPAR Index increase by almost 10 points by 2015.

“Carlson and Rezidor have grown together over the past 17 years,however our increased collaboration over the past two years led us to this nextnatural step of going to market as one and with firm, cohesive goals in place,”he says.

“We like to say one plus one equals three. The development bringswith it many opportunities that our management team will be focused onincluding the global development and alignment of our brands, the growth of ourrevenue generation engines, the pursuit of purchasing synergies and thedevelopment of our human resources.

The new Carlson Rezidor Hotel Group boasts a portfolio of morethan 1300 hotels – across a range of brands including Radisson Blu, Radisson,Country Inns and Suites By Carlson, Park Inn by Radisson, Hotel Missoni andPark Plaza – and it’s currently experience significant growth, especially inAsia-Pacific.

“Guests around the world will benefit from a more consistentalignment of our brands and the continued growth of our portfolio,” Joly says.“You can see an illustration of this with the global roll out of Radisson Bluas a world-class upper upscale brand.

“Our goal is that all of our stakeholders benefit from thisdevelopment over time.

“We just talked about the guests… we are also aiming to increaserevenue generaion and reduce operating costs to the benefit of our owners. Asmentioned, we will seek to enhance development opportunities for our employees.And we expect these changes to benefit all of our shareholders.

“One of the most important things about this announcement is thatit will allow us to implement a number of revenue generation initiatives fromwhich we aim to generate more than USD 400 million in additional revenue and aRevPAR Index increase of more than 9 points by 2015,” he says.

For staff, Joly says, the new company will open up a range of newcareer opportunities for employees of both Carlson Hotels and the Rezidor HotelGroup.

“From an industry perspective, the name change eliminates anyambiguity,” he says. “The Rezidor Hotel Group and Carlson Hotels will noweasily be perceived by business partners around the world as one global hotelcompany. This is also significant for our employees.

“The expanded partnership between the two companies opens up awealth of exciting new career and development opportunities for employees atboth companies.

“One of our goals is to be the number one travel and hospitalitycompany to work for, and our employees are very proud to now be part of one ofthe world’s largest and most dynamic hotel groups,” he says.

Joly says one of the main foundations which Carlson Rezidor HotelGroup is built upon is its people and he’s proud to have some of the industry’sfinest employees working for the company.

“Every great business needs great people,” he says. “We employmore than 80,000 people worldwide who are dedicated to customer service.

“Our ambitious growth plans and our employees are at the heart ofdelivering exceptional guest service and greater value, which in turn generatesmore attractive financial returns for our owners and stakeholders. It’struly an exciting time for us, our guests and our shareholders.”

It’s also an exciting time for Carlson Rezidor in Asia-Pacific,Joly says, as the company continues to record solid growth particularly from adevelopment perspective.

“I am very proud of the achievements of our team in Asia-Pacific,”he says. “We now have 76 hotels in operation and 78 in the contracted pipelinein Asia-Pacific (and) our objective is to have more than 150 hotels operatingacross Asia-Pacific by 2015.”

The company’s roll-out of the Radisson Blu brand has helped drivegrowth across the Asia-Pacific region and 2012 is set to be a big year for theMinneapolis, United States-based group.

“2011 was also an important year with the roll out of Radisson Bluin the region (and) we are scheduled to open 18 hotels in 2012,” Joly says.“This year, we will also planning some big news around the Park Inn by Radissonbrand.”

Source: James Wilkinson, SpiceNews

Who needs RoomKey when BackBid is here?

2012-01-31T04:30:00.000-08:00

Talkabout innovative approach to competition!

BackBid.comis the new hotel-booking website which reverses the reservation process andinstead of the traveller looking for a hotel room, hotels are offering theirrooms to the traveller. Its beta version was launched in November and at themoment it operates only in the U.S. market. It appears though that it has agreat potential and will most probably expand in Europe fairly soon.

Theconcept

Insteadof going to different Brand.com sites or travel comparison engines in order tosearch and compare hotel rates, the Montreal-based BackBid.com gives travellersthe opportunity to post a reservation they have already made in a hotel oronline travel agency website and then wait for other competing hotels bid for theircustom.

Cometo think of "opaque" websites like Priceline.com and Hotwire.com,this is not an entirely new concept. However (and this IS important) Backbid.comgives you the hotel information from the beginning of the process, not afterthe deal is done and paid for. Here, the prospective guest makes an informeddecision and does not hope for the best!

Howit works

BackBid.comusers have to create a profile (free-of-charge) and may include specific informationsuch as hotel loyalty programmes’ membership, room and amenities preferences,etc.

Theythen enter the details of a reservation they have already made in a hotel(check-in / checkout dates, confirmation number and booking agent or site) ande-mail this information to post@backbid.com.

Bythe next day, they will receive e-mail notifications from BackBid.comindicating there were x-amount of bids from hotels ranging from economy toupper upscale market) in the same destination.

Simpleas that! An easy and fully transparent way for making a bargain booking. BackBid.comidentifies the hotels offering the bids as any other OTA would with details onthe rates they are offering to the specific user, star ratings, amenities andcancellation policies. Users may compare up to three hotel bids using varyingcriteria such as star ratings, rates, amenities, check-out times, etc.BackBid.com also offers, just like any OTA, hotel photos and maps with theirlocation.

Onceusers decide which bid to accept, they can click “Book Now” and then enter theirpersonal and credit card information, and wait for the booking confirmation.

TheBottomline

BackBid.comusers can make bargain deals saving a considerable amount of time, by settingthe terms of the game themselves and having full control of the transactionfrom beginning to end (unlike the “opaque” websites).

Acknowledgingthat it is still in a beta version and that, inevitably, there will be a fewglitches on the way, I believe that this concept this is a winner! It clearlycovers a market need and –if it manages to engage a wide hotel base- offersgreat value to the traveller.

Now,how the hotels will respond to this new concept? They will probably embrace itas an additional means to offload distressed inventory. And I am sure that wewill witness cases where users will receive lower bids from the hotel that theyhave already reserved!

Onemore example of how the Internet has truly made the customer a King!

What Multinationals Miss in Emerging Markets

2012-01-31T03:30:00.000-08:00

Ina blog post for the HBR Insight Center’s “The Next Generation of Global Leaders”,Alfredo Behrens, professor of Global Leadership at Faculdade FIA de Administraçãoe Negócios in São Paulo, offers an innovative and yet very rational perspectiveon selection and recruitment strategies in emerging markets.

Aremultinationals getting the best leadership and professional talent when theyrecruit in Brazil and other emerging markets?

In one sense, yes: Thesecompanies can generally hire themost-expensive, best-educated graduates in these countries. But their highstandards may actually be keeping multinationals from taking full advantage ofthe talent on offer.

In Brazil, many multinationals outsource the preliminary screeningof trainees, with the requirement that candidates must speak English. This ishow 70% of a million candidates for 4,500 trainee positions are filtered outevery year by the recruiting company Cia de Talentos. And when multinationals hire for more senior positions, they are mostlyjust poaching from each other — and thus restricting themselves to the samelimited talent pool.

In a relatively poor country where the spoken language isPortuguese, fluency in foreign languages is the privilege of the upper middleclasses. By limiting hiring to thosethat show proficiency in English, multinationals are severely restrictingcareer opportunities for the poor and thus ratifying a history of exclusion.This seems in line with the view that it is not up to the corporations toeducate the workforce. But it also means that multinationals are shootingthemselves in the foot.

Because Brazil urbanized rapidly and recently, fertility amongwomen has dropped quickly. Families of four or five children are now rare. Each child is worth much more to a familythan used to be the case. In addition, rapid urbanization has brought urbanviolence. Upper-class and middle-class families do not want to expose theirprecious children to the streets. Thesechildren thus grow up sheltered and clawless in closed playgrounds and privateschools. And it is they who, once they graduate from university or businessschool, form the recruiting pool for multinationals.

To guide business schools teaching strategy to undergraduates, Irecently organized a roundtable of headhunters, business magazine editors, andrepresentatives of Cia de Talentos to figure out what was lacking among youngmanagement professionals in Brazil. Twomissing traits that came up repeatedly were "perseverance andresilience." Those are precisely the qualities that are lost tooverprotective upbringing.

This loss is difficult to make up for at a business school. Itcalls instead for a change in recruitingstrategy to look to less privileged environments where the families cannotoverprotect their children. There the candidates are unlikely to be aseducated, and are generally lacking in English proficiency. But these abilitiescan be learned.

Mixer, a prominentBrazilian producer of audiovisual content for network television and publicityagencies, has followed this approach in recruiting producers. Mixer partneredwith the philanthropic initiative Instituto Criar, which puts about 100 hundredpoor and disenfranchised youngsters through a TV training program for a year.Mixer has hired about 30 of them per year to complete their on-the-job training— and is now a successful, 400-employee company with private equity backing.

Multinationals should also be considering such paternalisticapproaches to recruiting — for their own good. A partnership between business schools, the recruiting companies andmultinationals is likely to render a more effective workforce, improved socialjustice and greater diversity at the subsidiaries of multinationals inBrazil. Multinationals would absorb part of the cost of developing abilities bybusiness schools, and recruiting companies would learn how to develop a newhunting ground. Cia de Talentos is aware of the shortcoming and is poised tochange. Multinationals must be willing accommodate.

This is also relevant for all emerging markets. Think of India and China, whose largepopulations are still strongly rural but urbanizing rapidly. The ensuing decayof the urban social fabric will take place and families are likely to followthe Brazilian route: overprotecting their offspring.

It makes sense for multinationals in Brazil to correct theirrecruiting practices and for those in India and China to avoid Brazilianshortcomings. A more paternalistic,long-term approach to developing talent may be the only way forward in emergingmarkets, where workers vie for protection because they are vulnerable andtalent needs to be nurtured by business because there is not enough of it to goaround.

Kurt Ritter: 35 years and going!

2012-01-30T01:30:00.000-08:00

Shortly after celebrating his 35th anniversary with RezidorHotel Group, (making him possibly the longest serving CEO of the hospitalityindustry), Kurt Ritter is on excellent form. BTN caught up with the hospitalitychief to find out how this extraordinary milestone has impacted on his visionand to discuss the newly announced strategic alliance between Carlson andRezidor to form the Carlson Rezidor Hotel Group.

BTN: Can youcomment on some of the milestones you have witnessed in the hospitalityindustry as well as within the Rezidor group over the past 35 years?

KR: It has been an exciting journeyfor me, and a development from a “cousin from the countryside” to a globalplayer for Rezidor. I could mention a number of milestones – the most importantpersonal one was my time as General Manager of the Radisson Blu Hotel in Kuwaitin the late 1970s where I met my wife Lara.

From a business point of view I’dlike to mention our Master Franchise Agreements with Carlson (1995 for RadissonBlu, 2002 for Park Inn by Radisson; both for Europe, the Middle East and Africa),our IPO in November 2006, and most recently our announcement of the CarlsonRezidor Hotel Group, a strategic alliance between Carlson and Rezidor that waslaunched in January 2012. Our business has become truly international; but atthe same time it is equally important to me that our business still is a peoplebusiness and all about service to our guests.

BTN: Yourcontract has now been extended until 2015. What will be your priorities goingforward?

KR: Certainly the strategicpartnership with Carlson. Together, we aim to generate more than 400 MUS$additional revenue until 2015 and increase our RevPAR Index by more than 9points. It is also key that we align our brands globally; our guests shouldexperience the same standards and services across the globe – whether they staywith us in Atlanta or Athens.

Carlson has already started to bringthe sophisticated Radisson Blu brand that we have developed in Europe to theAmericas and Asia. Last week, I stayed at the brand new Radisson Blu Aqua Hotelin Chicago; a fantastic hotel that made me proud and impressed me. If we lookin more detail at Rezidor’s daily business, it will be all about our “Route2015” strategy; this is an initiative we announced in December and whichincludes key activities that shall increase our EBITDA margins by 6-8% by 2015.

BTN: How arethe brands within the Rezidor Group (Radisson Blu, Park Inn by Radisson andHotel Missoni) fairing? What booking trends have you noticed in the currenteconomic climate?

KR: During the global downturn(2009/2010), we have seen a “buy down” phenomenon: 5 star guests started tobook 4- and even 3-star; 4 star guests came to 3- and 2-star hotels. Today,things rather go back to normal, and we also see that despite the still toughtimes the luxury segment grows and develops a “new luxury consumer” – guests whoare not looking for pure pampering, but for an exclusive, sophisticated and yetauthentic experience. Our brands do well in their respective segment, and I’mespecially glad that Hotel Missoni is on the right track and a huge success.

BTN: Rezidorcurrently focuses on luxury to mid-market with the three brands it operates.Are there any plans to branch out into the economy and budget market?

KR: No, not at the moment. CountryInns & Suites is still part of our portfolio (and extremely successful inthe US) – but we have put any active development in Europe, the Middle East andAfrica on ice because we want to focus on Park Inn by Radisson first.

This is a relatively young brand thatstill needs to grow brand awareness. We develop the brand via key flagships intop destinations (e.g. Amsterdam Schiphol, London Wembley), go deeper intoexisting markets and capture additional growth in new markets where and whenappropriate. Also Park Inn by Radisson gets ready for the next guest generationand is working on an updated brand profile that will be launched during theyear.

BTN: Which newemerging markets are you targeting in 2012? Do you see much potential in theMiddle East? Will you look to Asia?

KR: Rezidor’s key development marketsremain Russia/CIS and Africa. We are the leading international hotel operatorin Russia/CIS, and have the largest pipeline of hotel rooms under developmentin Sub-Saharan Africa. We aim to further strengthen these pole positions.

The Middle East will grow as well (wethink that mid- and long term, the Arabian spring will open new doors andbusinesses), but slower than our key emerging markets. Asia is not a region ofRezidor’s portfolio – Carlson operates and develops the brand there and hasambitious plans e.g. in India.

BTN: Youcurrently operate over 400 hotels and 87,000 rooms in 62 countries acrossEurope, Middle East and Africa. Can you comment on new hotel openings in thepipeline?

KR: Our pipeline is one of thestrongest of the industry and features 100 hotels with more than 20000 roomsunder development.

BTN: Istechnology a priority for the Rezidor Group? In what ways are you embracing /planning to embrace social media and mobile technologies in coming months?

KR: New technology is definitivelyimportant. When we launched our loyalty programme Club Carlson in early 2011,we also introduced iPhone and Android mobile applications for Club Carlson thatfeature express booking for all hotels, GPS mapping and the ability to redeempoints, as well as linking to “Explore Destinations”, a best-in-class featurethat stores more than 4.4 million points of interest from key touristattractions to local restaurants.

Social media might not be a hot topicfor us at corporate level (our approach was always to personally talk to ourbusiness partners, and I think we are quite strong in this regard), but it isof major importance for our hotels – communication between the guests and thehotel teams is lively!

BTN: Will yoube rolling out any other new developments / products in coming months?

KR: We will keep you updated!

BTN: Whatadvice would you offer to professionals who are planning a career in thehospitality industry?

KR: Today’s hospitality businessrequires a lot of different knowledge – sales, marketing, finance, legal,...just to name a few. But whatever somebody learns, he or she should never forgetthat the right attitude is basis and key: You have to enjoy it to be a host,you have to enjoy it to take care of people, and you have to enjoy it to serve.

BTN: Which isyour favourite property within the Rezidor group?

KR: Hotel Missoni Kuwait. I likeMissoni’s luxury lifestyle so much that I recently designed my own apartment inSwitzerland with Missoni furniture, fabrics and accessories – a dream!

BTN: A numberof Radisson Blu hotels have been recognised by the World Travel Awards? Whatdoes this type of recognition mean to you?

KR: The World Travel Award for theRadisson Royal Hotel, Moscow was one of my highlights. It is such a fantasticand unique property, the owners have invested so much money and personalengagement in the project (and still do so), and the team has worked so hardfrom the beginning on. Awards like this are a thank you and motivation to theemployees, they mean a lot of PR and industry recognition, they are veryimportant.

Source: BTN.com

Life after the Euro

2012-01-30T00:30:00.000-08:00

Whathappens if the Eurozone breaks up in 2012? And what does this mean forcorporate risk managers

InDecember last year the UK’s Financial Services Authority asked British banks toprepare for one or more European countries leaving the Euro or the singlecurrency collapsing altogether. And in January the chief risk officer’s of allof Britain’s “systemically important” banks were asked to attend a roundtableto discuss the fallout from such a scenario.

Otheralarming signs, such as France’s credit rating downgrade and the InternationalMonetary Fund’s refusal to extend lending support to Greece, have increasedfears over the eurozone’s future.

But howexactly would a eurozone breakup play out? And how would it affect corporaterisk managers?

ExclusiveAnalysis outlined a “plausible scenario”, in which Greece withdraws from theEuro in 2012, to try and help businesses understand the impact of a breakup.Here’s what they say could happen:

· After April elections the Greek government might be unable tosecure bailout funds, having missed austerity and reform targets. In this case,Greece would need to announce its withdrawal from the eurozone, closing itsbanking sector and freezing current accounts.

· In response, German and French governments could nationalisetheir banks, which are most exposed to Greek sovereign debt, consequentlyincreasing their own national debt. This would lead to a new round of creditrating downgrades.

· In the face of this scenario Italy would likely suspend its debtrepayments. Prime Minister Monti’s administration would then collapse.

· While the European Central Bank would aim to work with eurozonegovernments to protect the banking sector, Europe’s leaders would be unable toagree on policies to protect themselves from the contagion.

· Portugal and Spain, unable to access emergency bailout funds,would follow Greece and Italy by suspending their repayments.

· Soon European politics would begin to polarise and become morenationalistic. Other nations could withdraw from the eurozone and imposeprotectionist measures.

So thebig banks have already started to think about what would happen if the Euroceases to exist. But they are not the only ones.

The biggest threat to UK companies in 2012 is a breakup of the Euro, accordingto Deloitte’s fourth quarter survey of 94 CFOs from FTSE100 and FTSE250 sizedcompanies (see chart above).

A thirdof them attach a 37% probability to one of more members of the single currencyleaving the Euro in 2012. One survey respondent summed up the concerns of hispeers when he wrote that the biggest risk in 2012 was a “eurozone collapsesparking a second credit crunch”.

Extreme risks, like the breakup of the Euro, are by their naturehard to hedge against, because the impact is so far-reaching

Fearsover the eurozone crisis are naturally shared by corporate risk managers. “Thebig risk in front of us right now is economic risk,” says one UK risk managerfrom a FTSE100 sized business. “Sovereign debt is a crisis for globalorganisations.”

The biggestchallenge, he says, is trying to find ways of growing your business wheneconomic forecasts are so intrinsically uncertain. “The challenge is how do youstay ahead of the curve and how do you stay in control of your business.”

In areport at the end of last year Towers Watson described the breakup ofthe Euro as an “extreme risk”, but it obviously still figured it was one worthmentioning in some detail.

Accordingto Towers Watson, leaving the Euro would be painful and entail losses forsomeone. That “someone” is likely to include foreign investors or institutionsholding Greek debt.

“We believe that the Vienna Convention on the Law of Treaties allows awithdrawing country to re-denominate all internal debt and all sovereign debt(including sovereign debt held by foreigners) in the new domestic currency.This would impose losses on foreign lenders. Private debt held by foreigners wouldbe more difficult and probably decided by long drawn-out legal cases,” saidTowers Watson’s report.

Extremerisks, like the breakup of the Euro, are by their nature are hard to hedgeagainst, because the impact is so far-reaching. There are some strategies,though. Investors seeking to hedge against the break-up of the euro might tryand use credit default swaps (CDS), for example, but these can also introducedifferent types of risk.

It may even be possible to draw parallels with similar financialcrises in the past, such as when Argentina unpegged the peso from the US dollar

Thefirst step for most companies will be to think about how a scenario like thiscould affect their business. Provided they understand that they will be able toplan appropriate actions to take.

It mayeven be possible to draw parallels with similar financial crises in the past,such as when Argentina unpegged the peso from the US dollar in 2001, leading tomassive devaluation.

Here’s an IMF report on lessons learned from the crisisin Argentina.

Neverforget that amidst all this turmoil there could be opportunities. Weaknesses inthe economy could provide opportunities for cash rich companies to acquireassets at low valuations. And weaker competition provides companies on theright footing to expand their market share. Meanwhile, if you’re hiring, a weakjobs market could provide the chance to acquire more skilled staff.

Source: Strategic Risk

More than ever, businesses must think "what if"

2012-01-29T15:42:00.000-08:00

Atumultuous 12 months that saw revolutions in the Middle East, a worsening debtcrisis in Europe and a tsunami in Japan has set the tone forcorporate activity in 2012.

Caution, flexibility, nimbleness anddeep knowledge of host countries are more important than ever, executives andtheir advisers said at the World Economic Forum's annual meeting.

Fear of a major geopolitical disruptionover the next 12 months has risen to 54 percent, up from 36 percent lastquarter, a WEF poll showed at the start of this week's meeting.

"You have to more than at any timein recent memory think in terms of 'what ifs,'" said Vasant Prabhu, chieffinancial officer of Starwood Hotels & Resorts Worldwide.

"This is a world in which you haveto think in terms of scenarios and alternate outcomes and what you woulddo."

Companies are closely looking at theircounterparties - their vendors, suppliers and the banks that manage their cashto assess what would happen if they run into problems.

They are worrying about their currencyexposure, with one U.S. company chairman in Davos privately saying he had started converting all of hiscompany's cash in euros into dollars since the euro zone debt crisis suddenlydeepened last year.

Other risk-averse moves includecompanies adjusting their supply chains to build flexibility into theirbusiness should a natural disaster cause a repeat of the huge disruption whichfollowed the Japanese earthquake and tsunami last year.

And as they enter new markets and facemore uncertainty in mature ones, they are putting more effort intounderstanding local politics and business practices. Some are using formerspies to gather intelligence on trade partners.

Behind all this is a growing sense thatincreased uncertainty is the new reality of doing business. Financialconsiderations can no longer be the sole focus, advisers and executives said ininterviews before and during the WEF in Davos.

"I think fundamentally there is anacknowledgement that this volatility that we are seeing is going to be here forthe foreseeable future," PricewaterhouseCoopers Chairman Dennis Nallysaid.

"You can't predict the solutionhere in Europe. You can't predict what may happen in the Middle East. You can'tpredict what could happen in terms of the geopolitical issues in Asia, orcertainly what's coming out of Washington," Nally said.

Companies feel an imperative to bebetter prepared.

"Our own view right now for 2012is, 'Yes, there are some scenarios that could be bad but we think of them aslow probability," Starwood's Prabhu said. "We think 2012 would be ayear where the world muddles through."

FLIGHT TO QUALITY

For bankers one consequence is closerscrutiny of the financial health of their business by corporate treasurydepartments. Ratings downgrades of some banks have prompted corporatetreasurers to analyze their relationships and think about switching banks orspreading the risk by hiring more.

"Increasingly, we are seeingclients take a holistic view of integrating strategic capital raising and riskand cash management in this unique time of uncertainty and volatility,"said Jacques Brand, global co-head of Investment Banking Coverage and Advisoryat Deutsche Bank.

"As a result, clients are planningaccordingly and we are seeing a flight to quality."

Indeed, several major banks have seentheir deposits grow, in part because companies have moved their business awayfrom weaker institutions. JPMorgan Chase & Co's Treasury & SecuritiesServices unit saw liability balances grow to $370 billion (235 billion pound)last year, an increase of more than $100 billion in one year, Mike Cavanagh,the division's chief executive said.

"Corporate clients that we talk toare very mindful that they have counterparty and currency risks, andprioritizing them more so than pre-crisis," Cavanagh said.

"To the extent a client has aportfolio of banks providing transaction banking services, they are becomingmuch more conscious of concentration risk," he added.

Bankers said they are also advisingclients to look beyond their immediate trade partners, as what happens to thepartners' counterparties could end up affecting their business as well.

"You have to think in terms of twoor three degrees of separation. Your vendor, and your vendor's vendor -- whendoes that create a problem in your supply chain? Your banker and your banker'sbanker -- when does that create a problem in your financials?" said SamuelDi Piazza, vice chairman in Citigroup's Institutional Clients Group.

"Finance departments have to dealwith that this year," Piazza said. "Two years ago they didn't. Maybein '08 they did, but in '10 we felt better about that. It's back on theagenda."

POLITICS OF BUSINESS

For many Western corporations, the euro zone crisisand the gridlock in Washington are also bringing home the fact that politicshas an ever bigger role to play in business and markets.

"The euro zone crisis on the surfaceis a fiscal crisis or a debt crisis but it's going to be resolved as apolitical issue," said D.J. Peterson, director of Corporate AdvisoryServices practice at political risk research and consulting firm Eurasia Group.

Adding to the complexity is the needfor companies to find growth in emerging markets, where traditionally the statehas played a bigger role in the functioning of markets.

Boutique firms such as Eurasia Group,Oxford Analytica and others, which provide geopolitical advice and analysis,are seeing demand for their services grow rapidly in the last few years and areincreasingly finding a role alongside traditional advisers such as investmentbankers and lawyers in transactions.

Eurasia's Peterson said the group hadbeen growing at about 20 percent a year. It employs scholars, former policymakers, former regulators and industry experts to gather intelligence andanalyze geopolitical trends for clients.

Some, including Oxford Analytica, alsouse senior people with experience in diplomacy, intelligence and finance to puttogether advice for corporate clients.

Swiss insurer Zurich Financial Servicessaid 2011 had been a rough year for natural catastrophe losses but its businessof insuring against political risk is booming.

"From sovereign debt to tsunamis,the universe of enterprise risk seems broader and more consequential than everbefore," said Thomas Huerlimann, head of Zurich Global Corporate.

"You need to hedge your politicalrisk to a greater degree than you had to do, certainly in the last 20years," said Nader Mousavizadeh, chief executive of Oxford Analytica.

Source: Reuters

Strategic plans vs. reality in development

2012-01-28T00:30:00.000-08:00

Ric Mandigo of TR Mandigo and Company writes in HNN.com:

While I’m an expert in some things, I’ll be the first toacknowledge that the future growth of the Chinese hotel market isn’t amongthem.

However, a few months ago I noticed a trend that I’ve beentrying to figure out how to address for some time. What it boils down to isthis: Occupancy in Chinese markets was wildly varied, with a few citiesreaching over 70% and most at or below 61%, with some at or below 50%. Inshort, while growth in average daily rate and revenue per available roomremained spectacular and demand was up, these markets certainly weren’tdoubling their need for hotel rooms.

With strong projected growth in the future, development in Chinais up considerably. In fact, Marriott International has more than 100 hotels inChina and plans to double that number by 2015. Hilton Worldwide currently has17 hotels open in China, but has plans to open approximately 100 more in fiveyears time and Starwood Hotels and Resorts Worldwide plans to have 100 hotelsopen in China by the end of this year.

So, we have three major brands all poised for rapid growth, notto mention plans for other local brands and international flags.

Projections vs. reality

I’m not about to go out on a limb and say these plans are goingto create a bubble or these plans are bad. They’re not. From my perspective,this looks like a clear example of decisions being made based on a growthtarget rather than because these companies found 100 slam-dunk locations thatare in desperate need of hotels.

I would expect that if everyone manages to build all the hotelsthey’re planning to, we’re going to see supply and demand reach equilibrium—andquickly—to create a system like we have in the United States where developmentisn’t pegged only on demand growth but is based frequently on meeting existingcustomers’ needs better than the competition.

In fact, looking back at the occupancy rates in some of China’ssecond-tier cities, I suspect that’s happened already. But that’s their right.If they didn’t jump in, undoubtedly, someone else would, and they would havemissed the boat. The point is these decisions are being made on the notion thatthese markets will grow and become profitable at some point in the future, nottoday. And much smarter people than me, I’m sure, have concluded they will.

Outside of China

But really, we don’t need to go all the way to China to see theeffect this has. Strategic plans at the corporate level have evolved fromlooking at markets and developing products to serve the market to a strategy ofseeking representation of all the corporate brands in every market. The statedgoal is to have broad coverage of products to compete across all demand sectorsin each market area. The theory is, “If we build it, they will come.” When youhave a defined strategic plan for 100 hotels, it tends to force developmentactivity and downplay the market realities. Are there 100 great site locationswith strong underserved demand in China? Or were the plans a broader strategythat then forces development activity?

In discussing this column with Ted, our director, he relayed toa me a conversation he had with a developer in Merrillville, Indiana, wherenumerous products were on the drawing board. The question was, “How do wediscourage development activity in this market if it’s beginning to show signsof being over-built?” The answer was, “You don’t,” unless you, as a chain,build enough product to impact yourself, therefore controlling the competitiveenvironment but also eroding the performance of the existing properties,including, in all likelihood, your own franchisees.

In short: If you try to enter a market with a product whereother brands are pursuing development activity, you might be making a strategicdecision rather than a market-based decision. You are making a bet that you canopen sooner, market better or get morecustomers than your competition.

To me, it seems like that’s what’s going on in China. The brandsare in an arms race to grab as much of the market as they can, so that they cancontrol as much of the market as they can and enhance their profile in the eyesof new potential customers. And, at some point, the hope is that profitabilityfollows.

To me, it seems the most likely result of this race is thatthese markets will be fully developed within a matter of years, which would workout well if there was only one hotel company. But with everyone pursing thesame goal, it’s not a race for profits but rather a race to control orestablish presence in the markets so that other company’s future prospects willbe marginal as fast as possible. For the brands, this is great; for theindividual hotel owners, not so much.

Expansion on agenda for Spanish hotel chains

2012-01-27T03:00:00.000-08:00

Modest optimism among Spain’s largest hotel operators isspurring expansion in the country and especially abroad, as they work tocapitalize on rebounding tourism around the globe.

What follows are updates from Meliá Hotels International, NH Hoteles and Barceló Hotels & Resorts:

Meliá Hotels International

Gabriel Escarrer

“We think there will be a very positive evolution in theCaribbean and in Latin America, and our vacation properties continue to do wellin Spain partly due to (a shift in inbound travelers who would have otherwisevisited turmoil-plagued) North Africa and the Middle East,” Gabriel Escarrer, the CEO of Meliá Hotels International, said atlast week’s FITUR travel trade fair in Madrid.

But, he cautioned, the chain was concerned about theuncertain evolution of the domestic urban market and in the rest of Europewhere last year Meliá propertiesregistered only a moderate increase in revenue per available room.

Escarrer said total RevPAR for the group’s more than 350hotels under eight brands was up 9% last year over 2010, while room rateperformance was largely flat with an average increase of 0.2%.

Last year, Meliá registered what he described as “positiveresults” with 80% of income from outside Spain and investment of around €45million (US$58 million). The same growth is forecast for 2012.

“Between now and 2014, we have already signed 38 newprojects with 87% of those outside Spain, and Latin America will be the focuswith 17 hotels in Brazil alone,” Escarrer said. “There is this emerging middleclass in Latin America, which is traveling now, and we want to tap thatmarket.”

There also are openings planned in other emerging marketslike Colombia, Costa Rica, China, Vietnam, Indonesia and the United ArabEmirates, as well as the established destinations of the United Kingdom,Austria, Italy and Germany.

“There are another 240 projects under study,” Escarrersaid. The majority of Meliá properties are under management or rentalcontracts, and the CEO said the chain would pursue those models in its newestventures.

NH Hoteles

NH Hoteles, Spain’s leader in urban hotels with 400properties in 25 countries in Europe, the Americas and Africa, is counting onbetween 3% and 4% growth in its markets next year, following a good 2011 withearnings up 7% and net profits of €25 million (US$32.4 million).

In 2010, the company registered a loss of €40 million(US$52 million).

Mariano Pérez Claver

“We want to grow in Latin America and are now in talkswith a group in Brazil about expanding there as we have nothing in that boomingmarket as yet,” NH president Mariano Pérez Claver said.

“There are also plans for new properties in Argentina,mostly in Buenos Aires, and we have two hotels under construction in Mexico,which we will manage,” he added.

NH has 21 hotels with 2,620 rooms under construction.

Peréz Claver put on a brave face when asked about thecollapse late last year of the company’s agreement with HNA of China, underwhich the latter was to acquire a 20% holding in NH for €431.6 million (thenUS$594 million).

The agreement also would have allowed for the two groupsto pursue a joint venture for managing hotels in China and would have providedthe Spanish chain with much needed funds to ease its debt of €1.1 billion(US$1.5 billion) owed to a syndicate of banks.

“I think the Chinese looked at the situation in Europewith the financial turbulence and Spain’s debt crisis and things probablyseemed horrible,” he said. “And in retrospect, China was never really ournatural market anyway.”

Following HNA’s pullout, the president said NH hadproposed to its creditors a refinancing plan spread over five years, whichwould have the company sell off assets to raise €300 million (US$390 million).

Barceló Hotels & Resorts

At Barceló Hotels & Resorts, the company is seeing a“certain recovery” in its global operations with more bookings at its tropicalproperties enjoying an increase in visitors from developing markets.

“Russia, for example, was almost nothing several yearsago, and now we’re seeing strong demand from that part of the world at ourCaribbean resorts,” said Raúl González, CEO for Europe, the Middle East andAfrica.

Raúl González

“We expect a recovery in prices this year, and our incomein 2011 was around €1.1 billion ($1.4 billion), or close to that of the previousyear,” he said.

Barceló openings scheduled in the coming months are inHamburg, Germany; Marrakech, Morocco; and Brno, Czech Republic. An additionalfour hotels are scheduled in Italy through a management agreement with AranHotels.

González said that negotiations were continuing in theUnited Kingdom, where the Spanish company is seeking to revise its £32.5million (US$50.5 million), 20-property management contract with owner PumaHotels.

Barceló is seeking to reduce its rental payments agreed ina 2007 contract that runs until 2042.

“We signed the contract when times were good, but now itis not sustainable,” he said. “We’re hoping for a solution soon, maybe in twomonths or six months, but whenever it happens it will be an improvement on thecurrent situation.”

In a related development, the Spanish government reportedthis week that overnight hotel stays during 2011 were up 6.4% over the previousyear. Stays by foreign guests increased by 12.7%, but stays by Spaniards weredown 2.2%.

Source: Benjamin Jones, HNN.com

Yasmin Diamond the new face for IHG's Global Corporate Affairs

2012-01-25T16:19:00.000-08:00

Yasmin Diamond join Intercontinental Hotels Group (IHG) and departing her role as Home Officecommunications director.

Diamond becomes SVP of global corporate affairs at IHG, fillingthe role vacated by Leslie McGibbon last year. McGibbon has since become VP ofglobal comms for consumer healthcare at GSK.

Diamond has worked at the Home Office since 2008. She formerlyworked as director of comms at the Department for Environment, Food & RuralAffairs, and head of corporate comms at the Department for Education andSkills.

“I have had the most wonderful career in Whitehall and haveloved the different jobs I have done. I have had the privilege of workingalongside many talented and inspirational colleagues, who have taught me agreat deal,” said Diamond

“My time in the Home Office has been fantastic. I am proud ofwhat we have achieved in comms during the past couple of years. IHG is a greatbrand and I am really excited about leading its global corporate affairs.”

At IHG, Diamond will report to CEO Richard Solomons. She joinsthe company after numerous years of public sector experience, including servingas communications director at the Department for Food, the Environment andRural Affairs; head of corporate communications and marketing at the Departmentfor Education and Skills; and roles at the BBC and the NHS.

"Yasmin brings with her many years of experience dealingwith constantly changing opportunities and challenges across the communicationsmix, which will further strengthen IHG's senior management team," saidSolomon in a statement.

"Her breadth of experience across internal and externalcommunications in a wide variety of sectors and media channels will complementthe strong hospitality experience within our existing communicationsteams," says Richard Solomons on the appointment."

Industry leaders debate success of RoomKey.com in ALIS 2012

2012-01-24T17:41:00.000-08:00

Hubert Joly, Steve Joyce, Michael Shannon and Richard Solomons

Not every hotel executive thinks Room Key will be asuccess. Michael Shannon, for one, didn’t hesitate to express that opinion.

“This is a really interesting but really late attemptby the hotel business to try to get control of their customer … and I don’tthink it will work,” said the managing director of KSL Capital Partners.

Shannon was the odd man out during the general session ofthe second day at the Americas Lodging Investment Summit at L.A. LIVE. Sittingon either side were brand executives who had championed the launch of the newbrand-direct distribution platform.

Richard Solomons, CEO and executive director ofInterContinental Hotels Group, said Room Key represents a successful attempt todeliver to the guest what it is they want—namely, a transparent platform thatgives consumers the confidence of booking direct and the ability to comparisonshop.

Steve Joyce, president and CEO of Choice HotelsInternational, said the platform is at once guest friendly and owner friendly;it’s easy for guests to use and provides a low-cost distribution channel toowners. He predicted other brands and independent hotels will quickly hop aboard.

But Shannon wasn’t convinced.

“I don’t think there’s anyone who woke up this morningand said, ‘I really need a new website that’s designed for ownerprofitability,’” he said. The major brands are too far behind, Shannon added.Whereas the Room Key’s founding chains are finally working together, rowing inunison, the more advanced online travel agencies and other third-partyintermediaries are zipping by on speed boats.

“Customers are smart. They realize if someone is ownedby the other side, there’s probably bias against them. It really is the brandsattempt to try to regain against those (intermediaries) that aren’t playing asthe brands would like,” he said. “I think the consumer is going to demandindependent, fair value as judged by others.”

IHG’s Solomons was quick to offer a retort. He saidRoom Key is consumer friendly enough to gain back lost share. In addition,third-party websites comprise a very small piece of the chains’ overallbusiness, so they still have the power to take it back.

“My money’s on Google,” Shannon replied, showing hissupport for Google’s Hotel Finder.

The issue goes beyond a single distribution platform,Joyce said. Brands exist to create value for owners, and that value primarilyis around revenue generation.

“And that has never been a bigger issue in terms of thedistribution game, disruptive technology and where that goes long term,” hesaid. “It’s never been easier and more possible for independents or collectionsof hotels to access technology to distribute their inventory in ways that wenever considered 15 years ago. I really think it’s about the ability tocontinue to grow your channeling of revenue toward those hotels … in a systemwhere they feel represented and respected.”

All of that is irrelevant if rooms are distributed byanother force, Joyce added. Brands must stay ahead of the distribution curveacross all platforms, whether that includes notebooks, smartphones orcomputers.

“If we’re not out in front and channeling thoserevenues, I think somebody else is going to do that for us,” he said.

Don’t call it a comeback

The panelists were split over how to label the U.S.hotel industry’s slow and steady climb out of recession. Solomons called it a“rebound,” while Joyce called it a “rehab.”

Finding the perfect terminology, however, is impossiblegiven the bifurcation in the market, Shannon said.

He used grocery store spending as an example: Ingrocery stores surrounded by homes with an average household income ofUS$150,000 or above, customers are spending more on the essentials as well ason “luxury” items, such as alcohol. However, grocery stores surrounded by homeswith an average household income of US$50,000 or below are seeing smallerreceipts on only the essentials.

That’s the U.S. hotel industry, Shannon said. Somemarkets are performing well, while others are still suffering. “I think you seethat reflected in the political discourse of the ‘haves’ and the ‘have nots.’The recovery is very selective and upscale.”

But at least the U.S. economy is on the right track,said Hubert Joly, president and CEO of Carlson. The U.S. is one of only ahandful of countries that has delivered since 2008, he said, citing a reportfrom consulting firm McKinsey and Company. Most countries in Europe, however,have increased total indebtedness.

“The issue that we have to think about over here and inEurope is what actions the government is taking to sort out the fiscal problemsthat we’ve got,” Solomons said. “Over here they’ve kicked the can down theroad. In Europe, they’ve obviously gone down the austerity route.”

The outlook for travel, in general, is good, theexecutives agreed.

Solomons cited findings from a proprietary survey thatasked guests about their travel intentions in the year ahead; more than half ofguests said they plan to travel more during the next 12 months than they didduring the previous 12 months.

“We have some economic headwinds, but it seems thattravel has some legs here,” Joly said.

In another panel the discussion was more in favour of thenew website:

“This is not just to take back the customer,” said Eric Danzigerof Room Key, “but to take back the customer relationship, provide a better coststructure for the customer and have a friendly relationship with the (onlinetravel agents).

“Shouldn’t we all provide consumers what they want, whichis options?” he said.

Panel moderator Adam Weissenberg, vice chairman atDeloitte, asked whether the hotel companies are now competing with the OTAs.Danziger responded by mentioning the loyalty programs introduced by the OTAs.“Isn’t that competing with the brands and their customers?”

Hoplamazian said it’s a good thing for hotels that therenow is another distribution channel available.

“The more places you have your product, the more likelyyou are to sell it,” he said.

Source: Patrick Mayock, HotelNewsNow.com

Court approval expected for the reorganization of former Waikiki Edition hotel

2012-01-24T05:00:00.000-08:00

U.S. Bankruptcy Court in Honolulu will rule within two months ona reorganization for the hotel that used to be the Ilikai Marina Tower, andapproval of the plan is expected.

The 353-room hotel is now called the Modern Honolulu. Beforethat it was the Waikiki Edition. The failure of the Edition brand to take offlies at the root of the problems that led to the Chapter 11 filing last year.

The owners agreed to make the hotel the first location forMarriott's newest brand, but became increasingly dissatisfied as Marriottsigned only one other Edition in the world, in Istanbul. In 2010 the owners,acting at a shift change in the middle of the night, ejected Marriott as brandingand management contractor, installing Aqua Hotels & Resorts as the newmanagement. Since there have been dueling lawsuits, and the bankruptcy filing,while reflecting real financial problems, appeared timed to prevent a New Yorkcourt from ordering Marriott's reinstatement.

The reorganization plan, which was filed in Honolulu federalbankruptcy court on Friday, is seen as likely to win approval because it paysunsecured creditors 100 cents on the dollar, which would be good news for thehotels Hawaii-based vendors and suppliers.

Other terms of the plan include millions paid by the majorityshareholder, a family trust with ties to California and Nevada, which wouldrefinance a Wells Fargo mortgage and pay off Marriott. The Davidson FamilyTrust is already providing bankruptcy financing, which means, lending money forthe hotel's ongoing operations during receivership. This financing alone hasalready reached $9 million, although much of this has been spent on bankruptcylegal bills; the owners say the hotel itself is already covering its operatingcosts.

"Encounter a unique, separate reality that belongs to TheModern Honolulu alone, rekindling the glamour of Waikiki and elevating it withservice standards that exceed even the loftiest expectations," the hotelWeb site says. "It's a laid-back take on luxury in one of the most idyllicplaces on the planet." The property is indeed stylish, but, like theIlikai and the Hawaii Prince, it has the challenge of being an oceanfront hotelthat overlooks a parking lot and a marina instead of a beach.

A developer spun off the Marina Tower during an unsuccessfulattempt to renovate the original Ilikai, and the Edition launch ran into itsown problems as the brand launched during the recession, though the ownersargued that Marriott could have done more to promote the brand. Lately it hasbeen doing more, announcing plans for Editions in London, New York, MiamiBeach, Bangkok and Abu Dhabi, with more tentative plans for two more in LosAngeles and New Delhi.

Hyatt Officially Unveils the "Hyatt House" Brand

2012-01-24T04:00:00.000-08:00

Hyatt Hotels Corporation today announced the officialrebranding of 38 Hyatt Summerfield Suites and 15 Hotel Sierra hotels to HYATT House – a new hotel concept that will redefine the extended-stay segment and helpguests feel connected, welcome, and at home. As a part of the rebranding, all HyattSummerfield Suites and 15 Hotel Sierra properties underwent official name andsignage changes, bringing the total to 53 HYATT House properties in 16different states.

“The name and signage changes that took place at all HYATTHouse properties this month represent a significant step forward in our goal toredefine the extended-stay segment,” said Gary Dollens, global head offranchise and select brands for Hyatt. “We are excited to officially welcome HYATTHouse into our portfolio of brands and look forward to introducing newinnovations and services to guests throughout the coming months that will raisetheir expectations on hotel living.”

Guests staying at HYATT House will be welcomed withsignature brand services and amenities, including:

Knowledgeable House Hosts to acquaint guests with thehotel and local neighbourhood
Spacious studios, one and two-bedroom Kitchen Suites orTraditional guest-rooms featuring a fully-equipped kitchen; spacious living roomwith flat-panel TV; bedroom with comfortable bed featuring ultra-plush pillows,triple sheeting and a pillow-top mattress; and a modern bathroom
Open and welcoming Lounge where guests can relax, gatherand socialize
Free high-speed Internet access in suites and throughoutpublic areas
24/7 guest market
Complimentary full hot breakfast including items likescrambled eggs, bacon, French toast, and waffles
Evening Socials every Monday through Thursday featurecomplimentary hot and cold bites plus beer and wine (some HYATT House locationsoffer a full bar and small plates in lieu of the Evening Social)
24-hour Workout Room, featuring cardio and strengthequipment
Indoor or outdoor pool
Dry cleaning services and laundry facilities
Meeting and training facilities
Pet-friendly policy

A Familiar Name With a New Look

The name HYATT House was selected through extensiveresearch as an identifier that signals a residential, welcoming, personal andhospitable experience. HYATT House also has historical significance as the nameof the first Hyatt hotel, which opened in 1957.

The new logo, an iconic “H” with a curved square flag in abold blue hue, was chosen as distinctive in the category but connected to theoverall Hyatt brand.

“HYATT House is everything the name represents – awelcoming and warm environment that encourages guests to live like residents,”said Kristine Rose, vice president of select brands for Hyatt. “We want eachand every guest who comes through our doors to feel that they can let theirreal-life routines roll on, even when they’re on the road.”

In addition to its extended-stay hotels currently open inthe U.S., Hyatt has additional properties in this segment under development inkey markets in North America, the Middle East, and Southwest Asia. All HYATT Houseproperties will undergo service upgrades and remodelling throughout 2012 andbeyond that are designed with guests’ everyday needs in mind.

A few weeks ago, Hyatt announced the introduction of HYATTHouse in India (Mumbai). “The introduction of HYATT House in India, combinedwith our decision to make India the first location outside of the U.S. for our HyattPlace brand, reflects our commitment to offering our extended-stay andselect-service brands in one of the world’s fastest-growing markets,” saidSteve Haggerty, global head of real estate and development.

The introduction of HYATT House signals the company’scontinued growth in India. In addition to HYATT House Mumbai, signed agreementscover five additional Hyatt brands: two Andaz hotels in Jaipur and Delhi; one Hyatthotel in Raipur; 14 Hyatt Place hotels in Chakan, Delhi, Gurgaon (2), Goa,Hampi, Hyderabad, Jamshedpur, Kochi, Mohali, Munnar, Nashik, Sriperumbudur, andThiruvananthapuram; three Hyatt Regency hotels in Raipur, Hyderabad andNeemrana; and two Park Hyatt hotels in Delhi and Jaipur.

Choice Hotels Introduces a Redefined & Redesigned Comfort Brand Family

2012-01-24T02:59:00.000-08:00

Choice Hotels International Inc. introduces sweepingchanges to its best known hotel brand, Comfort Inn and Comfort Suites, and announcedthat it will hold franchise operators to a higher standard. The Comfort brandfamily, which includes Comfort Inn and Comfort Suites, has embarked on amulti-faceted plan to strengthen and revitalize its 2,000 domestic hotels.

The"Comfort: Redefined andRedesigned" plan is scheduled to be completed by the end of 2015 andfocuses on three key strategies - removing underperforming properties,refreshing existing hotels and adding new construction prototypical hotels.

"TheComfort name is one that travelers have trusted for generations. It's our goalto revitalize the Comfort brand family, drive greater consistency and ensureguests enjoy the best experience every time they stay at a Comfort brand hotel,"said Alexandra Jaritz, senior vice president of brand strategy andmarketing for Choice Hotels.

Removal of Hotels that Do Not Meet Guest Satisfaction Standards

Brandexecutives at Choice Hotels, one of the world's largest lodgingfranchisors, recently put in place higher guest satisfaction standards for theComfort brand family with the goal of securing the brand's place as the bestoption for travelers within the upper midscale segment. "The new guestsatisfaction standards are based on the voice of the guest,"said Alexandra Jaritz, "and if guest feedback indicates that aproperty is not living up to standards, we have implemented stricterconsequences for underperforming properties."

This part of the plan isespecially impactful for Comfort Inn. In addition to terminationsissued for other reasons, Choice is prepared to remove up to 10 percent ofthe Comfort Inn system if those hotels do not rise above the newguest satisfaction thresholds.

Product Improvement Plans and New Brand Programs for ExistingHotels

Thecompany is also implementing new brand programs at existing hotels designed tohelp them compete at a higher level. Brand programs were developed afterextensive research with upper midscale and midscale guests. "Weimplemented the new Your Morning® breakfast program and flat panel TVs in 2011at Comfort Inn and Comfort Suites, and we have already seensignificant increases in guest satisfaction as a result,"said Christina Goldie Williamson, senior director of brand strategy forthe Comfort brand family.

"In 2012, all Comfort Inn and ComfortSuites hotels will implement the 'Your First Impression' program, aimed atdelivering a consistent and contemporary welcome experience to ourguests." Additional brand programs are under development and will belaunched over the course of the next three years.

Complementingthe planned brand programs, nearly 70% of the Comfort system will complete morecomprehensive Property Improvement Plans by the end of 2015, ensuring that theComfort brand family provides a reliable and refreshed guest experience.

A New Prototype and Design that Drives Guests' "Intent toStay" at Comfort

Thebrands' new Truly Yours™ prototypes, which were formally launched at ALIS,were designed and developed using feedback from more than 1,500 guests inaddition to in-depth interviews with developers. Consumer research indicatesthat overall intent to stay at Comfort Inn and Comfort Suites nearlydoubles in response to the new design and that guests are willing to paysignificantly more on average per night compared to the current design.

"Wedesigned the new Comfort prototypes with the idea that our guests anddevelopers are the true architects," added Jaritz. "Through extensiveconsumer testing, we identified the amenities and design elements that appealmost to them. The result is a warm, inviting hotel design that not onlyresonates with our guests, but also appeals to experienced developers seeking ahotel that is highly cost-effective to build and operate."

"Asthe largest family of brands within the Choice Hotels portfolio,Comfort offers owners and developers strong potential for a return oninvestment," said David Pepper, executive vice president, globaldevelopment, Choice Hotels. "Low development and operating costmodels, combined with an appealing new prototype and an aggressiverevitalization plan for our existing hotels, makes the Comfort brand family anappealing investment." To show commitment for the new ComfortInn and Comfort Suites prototypes, Choice plans to offer developmentincentives for multi-site deals.

The Future of Comfort: Redefined and Redesigned

"Withthirty years of successful history, Comfort is an iconic brand with guests anddevelopers," said Goldie Williamson. "By the end of 2015,we'll have a refreshed system that is not only more competitive but alsodelivers a more consistent guest experience. The 'Redefined andRedesigned' plan is going to set the stage for the next thirty years of successfor the Comfort brand family."

Liquidity equals Value: Bill Marriott and Sam Zell in ALIS

2012-01-24T02:42:00.000-08:00

Sam Zell and Bill Marriott

In the first day of the AmericasLodging Investment Summit (ALIS) Bill Marriott,chairman and CEO of MarriottInternational, sat down with moderator Dale Anne Reiss,senior consultant at DLAPiper/Artemis Advisors, and Sam Zell, chairman of Equity Group Investments,to discuss the current business environment, reinvention and leadership style.

“Have really smart people and listen to them,” said Marriott.“Encourage them and help them grow in what they do. Take good care of ourpeople and take good care of the customer and the customer will come back.

Marriott, who saidthat he believes in “the relentless pursue of excellence” talked about thecompany’s reinvention over the years. In 1964, when he became president, thecompany had five hotels and was in the food service management business amongother things. Today, after having its hand in theme parks, restaurants, airlinecatering, Marriott is completely focused on lodging.

“We continue toestablish our brand and reinvent ourselves. You have to keep changing andlooking for opportunities,” said Marriott, pointing out that you can’t bescared to make decisions on different opportunities. But he pointed out that itis important to five up on the things that aren’t working for you, “and focuson the things that you do best, and for us, that’s lodging.”

Zell says that hiscompany never really started with a particular focus. “We are in all kinds ofdifferent things, but what is important is to set the goals and make sureeveryone’s hungry,” he said. “You have to be in a position where the people youdepend on are predictable.”

“From the beginning, our attitude and leadership style was thatculture was critical and we knew of no successful businesses that didn’t have aculture,” said Zell. “The optimumscenario is total access. My door to my office has never been closed. As anentrepreneur, the biggest risk I have is getting surprised and if the peoplethat work for you don’t have access and don’t tell you what’s going on, thenyou get surprised.”

In terms ofinnovation, Zell said that innovation covers different terrain. “In 1990, welooked at the world and saw that the world as it was structured couldn’tcontinue the way it was structured and in 1990, we got focused on the publicmarkets,” he said. “We got a lot of blow back on that.” The answer to that, hesaid, was that “it was the right idea at the right time and it was executedcorrectly and that is what innovation is all about…you have to not be afraid totake the risk and you have to understand what the risk is.”

For Marriott, the word“innovation” takes him back to 1980 when the company was just building big boxhotels in its hotel division and decided to try reaching out and doing somesmaller hotels. The company developed the Courtyard Marriott to answer thedemand for “a better room at a better price,” and now has more than 925 ofthem. “That experience helped us explore a bunch of other brands over the years,”he said. “We realized there was a need out there and that the lodging marketwas changing.”

The best thing to comeout of the recent recession was a reminder that cash is king, according tooutgoing Marriott International CEO Bill Marriott who recalled a time when helearned the never-forgotten lesson about cash in hand.

“We were ready forthis latest dip,” he recalled. “Back in (1989)-90 when things went down thedrain, we almost went down the drain with it.”

He said Marriott, atthe time, had about US$3 billion in hotel assets on its balance sheet, but whenthat recession hit, “buyers ran away. We had to stop construction on a numberof hotels.” The company had to access all cash on hand at its approximately 100restaurants to scrape up enough money to survive.

“We resolved we neverwould ever get in a position like that again,” he said.

Seemingly a number ofother companies have the same resolution. “CorporateAmerica has more cash on hand than ever before,” Marriott said. “That’sprobably the brightest thing on the landscape.”

In terms of lessons learned over the years, Zell said it in onlya few words: “Liquidityequals value.” According to Zell, “we all came out of this lastfew years with a real focus that everything comes down to liquidity, exit strategies,and knowing before you come in, how youare getting out.”

In today’senvironment, Zell said, “Although everyone feels better, there has been a verylimited solution to the overleveraged industry. There is an enormous amountthat has to be done in 2012 and 2013.” But the good news, he said, is that realestate comes down to a simple concept: supply and demand. “Because we aren’tcreating supply, we are filling up our existing stuff.”

According to Zell, thereal opportunity in the US is to figure out where the demand is. “You makemoney in real estate by servicing existing demand,” he said. “The good news isthat there is very little under construction and I think there will be verylittle for the next few years, which will result in continuing occupancy inreal estate. As we have gone around the world and invested in differentmarkets, our criterion comes down to where the demand is.”

Real estate, in general, is not yet out of the woodswhen it comes to having a difficult financial environment, Zell said.

“There has been a very limited solution to theoverleveraged real-estate industry,” he said. “Pretend and extend was a reallygreat thing in (2008)-09, but reality is going to have to take its place. Anenormous amount has to be done in 2012 and 2013 to recapitalize overleverageassets all over this country.”

He said the one silver lining for all real-estateclasses is that the supply-and-demand equation is leaning in favor of demand,but one major obstacle remains.

“Nobody seems to get much traction on rates … that’s afunction that we’re still in a very slow environment,” Zell said.

Starwood to Widen its Lead in Luxury and Aggressively Expand Footprint in World's Fastest Growing Markets

2012-01-23T02:51:00.000-08:00

Simon Turner

Starwood announced yesterday thatit closes the year 2011 by adding the most new hotel rooms in its history plusmore new deals than since pre-crisis.

The company’s momentum continues with 80 newhotel openings scheduled in 2012. Milestones for this year will include the openingof Starwood's 150th Luxury Hotel,250th Mid Market Hotel, 250th hotel in Asia Pacific and 125th hotel in China

2011: A Year of Record Growth and Deal Momentum

Even against a backdrop of economic andgeo-political uncertainty, 2011 was a record growth year for Starwood. Around the world, Starwood opened 21,000 new hotel rooms- the largest organic growth in its history. Importantly, the company alsosigned 112 new hotel deals, the highest number of new deals since before theglobal economic crisis.

"Our global multi-brand growth continuesunabated and Starwood is particularly well positioned to take full advantage ofgrowth anywhere in the world, whether in established markets or in fast growingeconomies," said Simon Turner,President of Global Development for Starwood. "In 2012, markets likeBrazil, Africa, the Middle East and Indonesia will be ones to watch. Indeveloped markets, conversions continue to drive growth. In Europe, whilefinancing for new builds is scarce, there is a large landscape of independenthotels ripe for flags, and we're also keenly focused on an expected uptick inportfolio transaction activity in North America which should lead to heightenedconversion opportunities."

Starwood's President and CEO Frits van Paasschen continued,"All pipelines are not created equal. Never in Starwood's history have wehad a pipeline of this scale and quality. Our growth as a percentage of ourbase continues to exceed that of our competition and with 389 new hotels since2007, we have more new hotels as a percentage of our portfolio than ourcompetitors, which demonstrates ongoing demand for our sought-after lifestylebrands."

Starwood to Lengthen Luxury and Global Lead in 2012

Turning to 2012, more than 60% of Starwood's newhotels will be in the luxury and upper upscale segment including the 30th St. Regis hotel, the 80th Luxury Collection hotel and the 45th W hotel. In just four years Starwoodhas grown its luxury room count by 75% and will celebrate its 150th luxuryhotel milestone this year under its St.Regis, Luxury Collection and WHotels brands. With more luxury hotels than even Four Seasons or RitzCarlton, Starwood is well positioned to capitalize on wealth creationaround the world which continues to fuel demand for luxury hotels.

Influenced by macro economic growth trends,nearly 75% of Starwood's new hotels in 2012 will open outside North America,strengthening Starwood's lead as the largest global hospitality company in AsiaPacific, Latin America, the Middle East, Africa and Europe. Starwood's growingglobal portfolio will also enhance its stronghold in the world's fastestgrowing markets. In fact, across all emerging markets, Starwood is now nearlythe same size as Marriott, Hilton and Hyatt combined.

Long Runway to Grow Mid Market Brands Globally

According to Turner, Starwood is alsolooking to "turbo charge" expansion of its Four Points by Sheraton andAloft brands. Leveraging its longstanding tenure and teams in key globalmarkets, it's setting its sights on expanding its mid-market brands in secondaryand tertiary markets around the globe where there is a long runway to growreliable and affordable hospitality. Accounting for 27% of the company's globaldevelopment pipeline, Starwood will open its 250th mid market hotel this year fuelledby Four Points's great globalmomentum, representing almost a quarter of Starwood'sopenings and signings last year, as well as new brand Aloft, which launched global from the start, and just opened its55th hotel.

Deal Momentum and Heightened Opportunity in North America

Even in more challenged markets, Starwood isentering 2012 with new momentum. DeniseColl, President of North America for Starwood said, "In North America,the company signed more new deals in 2011 than in 2010 or 2009. Conversions continue to dominate, and Sheraton and Four Points by Sheratonare leading our growth with great Westinand Luxury Collection conversions aswell. Our new owners are benefiting from the strength of our centralizedservices and the room contribution from StarwoodPreferred Guest which is close to 50 percent."

Asia Pacific Continues to Fuel Growth

Driven by phenomenal demand, Starwood will opennearly 60% of its new hotels in Asia Pacific in 2012. The addition of nearly 50new Starwood hotels will increase the company's portfolio in the region to 250hotels by year's end.

China continues to lead Starwood's growth inAsia Pacific, accounting for nearly 35 of Starwood's new hotel openings thisyear. Starwood is set to open its 125th hotel in Greater China in 2012, fueledby the strength of its Sheraton and Westin brands and increasingly themomentum of Four Points and Aloft. More than one-third ofStarwood's new hotels in China will fly the Sheraton flag, building on the brand's 30-year legacy in thecountry. In addition, Westin Hotelswill continue its global expansion with the opening of the brand's 20th hotelin China.

"Starwood is keenly focused on meeting theever-growing demand for our high-quality brands in China and India, as well asin other fast-growing economies across Asia," said Miguel Ko, Chairman & President, Asia Pacific for Starwood."For instance, we are experiencing a surge of development in Indonesia,which has a young and growing population of 240 million, an abundance ofnatural resources, and major tourist destinations."

Starwood will open four new hotels in Indonesiathis year, adding to its current portfolio of 12 properties. Future Starwoodopenings include the just signed WJakarta and the Le Meridien Bali.

Other strong markets in Asia Pacific includeMalaysia, Thailand and Vietnam. Starwood will grow by nearly 50% in Malaysia inthe next three years with plans to open another four hotels. In Thailand,Starwood has a robust footprint of 19 hotels, with another five openingsplanned by 2014. Starwood will also grow its footprint in Vietnam with theopening of Le Meridien Saigon, Starwood's 4th hotel in Vietnam and its 2nd inHo Chi Minh City.

The Next Frontier -- Brazil and Africa

Starwood is laying the groundwork for futurehotel development in Brazil which is poised for a surge in tourism in therun-up to the 2014 World Cup and 2016 Summer Olympics. Starwood, through its Sheraton brand, has been established inBrazil since the 1970s and currently has six hotels there under its Sheraton and Four Points by Sheraton brands in popular destinations such as Rio,Sao Paulo and Porto Alegre. Starwood recently added Development resources inBrazil and launched its website in Portuguese.

"Brazil is one of the most enticing globalmarkets for future hotel development," said Osvaldo Librizzi, President, Latin American Division for Starwood."It remains one of the world's great untapped hospitality markets,under-hoteled, and under-flagged. With the influx of new travelers and theinfrastructure development activity that comes with that, there is tremendouspotential to develop all of our high-caliber brands across Brazil."

Starwood is also eyeing Africa as one of itsnext growth markets. "As oil and commodity dependent states look todiversify with a focus on tourism coupled with an increase in leisure demandfrom China and India, Africa is poised for meaningful hotel growth," said Roeland Vos, President, Europe, Africa& Middle East Division for Starwood. Today Starwood is already the largestglobal hotel company in Africa with nearly 40 hotels primarily across its LeMeridien and Sheraton brands. In 2012 Starwood will open the first St. Regis inthe Africa region with the St. RegisMauritius and at the other end of the spectrum Starwood sees the mid market segment as a particular opportunityfor expansion.

Roomkey.com: Will this time an alliance work?

2012-01-22T03:30:00.000-08:00

Anew hotel search engine, backed by six of the largest lodging chains in the industry,is taking direct aim at online travel agencies such as Expedia.com andPriceline.com.

Roomkey.comis making a play for the estimated 90 million travelers that book rooms via theWeb with promises of low rates, extensive selection and brand loyalty points.

Ownedby a joint venture of Hilton Worldwide, Marriott International, Hyatt Hotels,InterContinental Hotels Group, Choice Hotels International and Wyndham HotelGroup, the site searches their inventory of nearly 30,000 hotels. Oncecustomers select a property from the list of results, they are routed to thehotel’s Web site to book the room.

“We’reputting you right into the reservation system of the hotel, so you get yourpoints and an easy way to change your reservation,” Roomkey.com chief executiveJohn Davis III said. A beta version of the site rolled out earlier this month,with the official debut slated for March. “We’re trying to help travelers cutthrough the clutter.”

Daviswould not disclose how much money the founders invested in the Web site, butacknowledged they will share in proceeds once the venture generates profits.

TheWeb site charges companies lower fees to list their properties than itscompetitors, allowing hoteliers to capture more revenue from online booking,Davis said. He would not divulge the exact fee structure, but said it issubstantially less than the average 15 to 30 percent commission online travelagents typically collect.

Hotelowners flying the brand flags of any of the founding partners receive thelowest rates. New member brands can take an equity stake in the Web site forthe same deal or sign up as a commercial partner, as Best Western is doing.

Travelanalyst Henry Harteveldt of Atmosphere Research Group said the site will haveto “build out the number of brands and locations” to be successful in a highlycompetitive field. “Roomkey has an uphill battle. We are reaching a stagnationin the number of people who are going online and booking travel, so it willhave to fight for an audience.”

JosephRubin, president of Interactive Travel Services Association, which representsonline travel sellers, said many of his members have spent years building brandloyalty and will be difficult to dislodge.

“Theproducts and services that they offer far outpaces whatever Roomkey.com mayoffer,” he said.

Roomkey.com’sfounders began bouncing around ideas for the Web site two years ago as thehotel industry was emerging from the depths of the recession. Coming off aperiod where hotels relied heavily on online intermediaries to fill rooms, theysaw “room for improvement,” said Shafiq Khan, senior vice president ofe-commerce at Bethesda-based Marriott.

Afterdrafting a plan for the site, the partners purchased Hotelicopter, aCharlottesville-based technology platform, to power the search engine andinvited Davis to head the project. A former chief executive at PegasusSolutions, Davis was instrumental in the 1996 creation of Travelweb.com, anonline agency owned by Pegasus and several hotel chains. It was eventuallysnapped up by Priceline.com.

Here, it is noteworthy that the Travelweb.com project (and the similar attempt by European airlines with Opodo.com) took place in a period when the internet was all about potential – no-one wasreally making any “big money” online. But today online travel agents havematured into highly profitable businesses. In the last quarter alone, Priceline.comhad a turnover of US$6.3 billion (up 56.2 per cent year on year), revenue ofUS$1.5 billion (up 45 per cent) and net income of US$469.5 million comparedwith US$223 million for the same period a year ago. Will Roomkey.com competewith such a player?

About11.2 percent of all hotel bookings are now done through online travel agents,such as Priceline.com, while the largest percentage of reservations, 25percent, are made on hotel Web sites, according to research firm Travelclick.Hotel Web sites were the fastest growing booking channel last year, butthird-party sites continue to gain share.

Arecent study by Tourism Economics said the hotel industry would lose 4.4percent in revenue for every 10 percent in market share gained by online travelagents. The research firm estimates that those agents cost the industry $2.5billion in revenue in 2010.

Thoughhotel companies maintain an uneasy relationship with online travel companies,they value the audience that frequent the sites. Harteveldt, however, pointedout that hotels have been handing online agents fewer rooms to sell.

ChuckSullivan, senior vice president of global online services at McLean-basedHilton, said, “The [online travel agent] channel is a very importantdistribution source for us, but it’s one tool in our tool chest. The onlineworld is in a constant state of change ... those who succeed will recognizethat and be nimble enough to adjust.”

Source: Danielle Douglas, WashingtonPost

"Crowdsource" Your Travel with Expedia Last-Minute Deals

2012-01-22T03:26:00.000-08:00

Expedia launched a special “Last-Minute Deals”programme, which relies on user-generated deals and user-informed travel trendsto lift up and showcase the best near-term travel deals. Several million travellersgo to Expedia.com every day to search for travel deals. Last-Minute Dealsharnesses their collective effort and shares it with the world.

Unlike other flash sales programmes, which aredriven by suppliers and based on inventory, Expedia Last-Minute Deals showcasedeals found by other customers. The key parameter is point of origin. To accessLast-Minute Deals, travellers visit www.expedia.com/lastminute and either thesite will auto-detect the customer's location or people can enter their ownhome city. Last-Minute Deals then springs into action, surfacing the best dealsfound by other travellers to different destinations. With a quick click, travelerscan make those deals their own.

"In a sense, the millions of people whocome to Expedia are now serving as your own personal travel agent, helping youfind the best and most popular deals from your home city," said Joe Megibow, vice president and generalmanager, Expedia.com. "So many customers travel with Expedia every monththat it puts us in a great position to deliver this type of service to ourcustomers. With Last-Minute Deals, you can get the best deals available byletting everyone else do your research for you."

Expedia's Last-Minute Deals programme is thelatest offering in the company's robust portfolio of ways to find travel valueon Expedia.com. In 2011, Expedia launched both the ASAP programme - which, as theacronym suggests, delivers trips featuring A Sudden Amazing Price, live andbookable for up to 12 hours - and the hugely successful Groupon Getaways withExpedia partnership, which couples the flash-sales expertise of Groupon withExpedia's unparalleled global network of travel suppliers. Groupon Getawayswith Expedia follows Groupon's voucher model, where travelers book a hotel roomor package at an exceptional rate, then travel when the time is right. GrouponGetaways with Expedia deals are also transferable, allowing consumers to givethe gift of travel to a friend or loved one.

In the midst of debt refinancing effort, NH Hoteles engages Pelisson

2012-01-21T06:16:00.000-08:00

Gilles Pelisson

NH Hoteles is facing serious financial problems and while it seeks a five-year refinancing of the 650 million euro loan, which was taken out in 2007, it is also selling a large number of its current assets maintaining the management contracts of the properties it runs. The plan for 2012 is to sell unspecified assets worth less than 300 million euros.

The group, which operates some 175 hotels at home and more than 225 abroad, targets mainly business travellers but also draws revenues from Spain's tourist industry, which enjoyed a bumper year in 2011, when visitor arrivals rose 8.1 percent to 56.9 million in 2011, according to government data.

Industry Minister Jose Manuel Soria said last week tourism growth would slow sharply this year as the economic downturn hits some of the country's key foreign markets. But company chairman Mariano Perez Claver told journalists on Thursday he expected European tourism markets including Spain to grow by 3-3.5 percent this year and Latin America, where the group also has a presence, in double digits.

"The outlook for the industry is looking up. The start of the year has been a positive surprise," he said.

NH Hoteles declined to comment on a newspaper report it is interested in buying the more than 90 state-owned heritage hotels known as 'Paradores', which Soria said the government was looking into privatising.

At the same time the company announced the appointment of Gilles Pélisson (former ACCOR CEO) as independent director to the Company, additionally naming him member of theExecutive Committee and the Appointments and Remuneration Committee.

“The decisions taken in recent months had alreadybolstered the Group’s executive structure, particularly the sales and businessdevelopment divisions, so that the next call of order was to strengthen theGroup’s governance bodies by getting the Executive Committee up and runningwith the representation and composition stipulated in the corporate governancerules, while incorporating new members such as Gilles Pélisson, who bring theirknow-how, experience and general business vision ahead of the new strategicchallenges facing NH Hoteles in the years to come", said Mariano Pérez Claver.

The 54-year old Frenchman brings vast experience in theinternational tourism industry having led and ran the Accor hotel group since2006. Accor, where Mr. Pélisson served as Chairman and CEO from 2009 untilearly 2011, is the world’s fourth-largest hotel group with 4,100 hotels and150,000 employees. Pélisson has been involved in the hotel and tourism industrysince he began his career back in 1983, at the Accor Group itself. For the next12 years, until 1995, he would hold frontline positions at the group such as SeniorVice-President for Asia–Pacific and Joint Managing Director of the Novotelchain. Later, between 1995 and 2000, he served as chief executive of DisneylandParis Resort, Europe’s leading tourist resort, where he also chaired the board.There he oversaw 13 million visitors, 5,700 rooms and a staff of 12,000.Notable among his achievements at Disneyland Paris, Mr. Pélisson managed todouble EBITDA and triple net profit (excluding royalties) in just five years.In between these two periods devoted to the tourism industry - between 2000 and2005 - Mr. Pélisson held senior management positions in the Frenchtelecommunications industry, notably at Bouygues Telecom (France’s number threemobile telephony operator), where he served as CEO and Chairman of the Boardbetween September 2001 and September 2005.

Thailand: A rather unlikely Jihadist target

2012-01-20T18:29:00.000-08:00

On Jan. 12, Thai authorities arrested a man they say was a memberof the Lebanon-based Shiite militant group Hezbollah who was plotting an attackin Bangkok. In uncovering the plot, Thai police cite cooperation with theUnited States and Israel going back to December 2011. Bangkok is indeed atarget-rich environment with a history of terrorist attacks, but todayHezbollah and other militant and criminal groups rely on the city as a businesshub more than anything else. If Hezbollah or some other transnational militantgroup were to carry out an attack in the city, it would have to be for acompelling reason that outweighed the costs.

Thesuspect was identified as Hussein Atris, who was born in Lebanon but acquiredSwedish citizenship and a passport after marrying a Swedish woman in 1996.Atris was arrested on immigration charges as he was trying to board a plane atSuvarnabhumi airport, Bangkok's main international airport. Police said anothersuspect is still at large and possibly already out of the country. Atris'sarrest on Jan. 12 was followed by a statement the next day from the U.S.Embassy warning U.S. citizens in Bangkok of the potential foreign terroristthreat in the country and encouraging them to avoid tourist areas. Other countries,including the United Kingdom, Australia, Canada and Israel, issued similarwarnings. Thai police have responded by increasing security in tourist areaslike Bangkok's Khao San Road and the island of Phuket.

Then,on Jan. 16, some 200 Thai police officers searched a three-story commercialbuilding in a town along the coast 32 kilometers (about 20 miles) southwest ofBangkok. Information on the location and contents of the building was said tohave been provided by Atris after two days in custody. On the second floor ofthe building, officers found 4,380 kilograms (about 10,000 pounds) ofurea-based fertilizer and 38 liters (about 10 gallons) of liquid ammoniumnitrate -- enough materials to construct several truck bombs comparable to theone detonated at the Marriott Hotel in Islamabad in 2008. Urea fertilizer canbe used to manufacture the improvised explosive mixture urea nitrate, which wasthe main charge used in the 1993 World Trade Center bombing. The compound isalso frequently used in improvised explosive devices in Iraq and to some extentin Afghanistan. On the ground floor of the same building, police found reams ofprinting paper and 400 electric table fans in cardboard boxes.

Thefollowing day, a Bangkok court charged Atris with illegal possession ofexplosive materials. As in many other countries, a permit is required forhandling such large amounts of fertilizer in Thailand.

SinceAtris' arrest and the police raid, a flurry of statements from Thai authoritieshave given contradictory accounts of what happened. Gen. Yuthasak Sasiprapha,Thailand's defense minister, seemed comfortable connecting the U.S. and Israeliwarnings to the arrest and seizure, stating that Atris and other conspiratorswere linked to Hezbollah and had chosen Bangkok as part of a plan to retaliateagainst Israel. The general speculated that the Israeli Embassy, synagogues,tour companies and kosher restaurants could be targeted.

The defense minister's speculations are logical. In 2010, Thailandreceived 120,000 Jewish tourists, and Bangkok itself has a large Jewishcommunity, complete with a Chabad house (a Jewish cultural center and one ofthe targets in the 2008 Mumbai attacks). According to its website, the IsraeliEmbassy is located in a commercial office building with (from what we can tellfrom photographs) relatively little perimeter security. Hundreds of thousandsof Americans also visit Thailand each year. At the same time, the United States and Israel are engaged in a covert war withIran that has most recently seen the assassination of an Iranian scientist allegedlyinvolved in the country's nuclear program. Since Hezbollah has been considereda proxy of Iran, the United States and Israel have long anticipated reprisalattacks from Iran via Hezbollah against U.S. or Israeli targets around theworld.

Whilethere are certainly plenty of U.S., Jewish and Israeli targets in Thailand ingeneral and Bangkok in particular, other officials have given differentaccounts of the alleged plot that add more nuance. According to National PoliceChief Priewpan Damapong, Atris insisted that the materials seized were notintended for attacks in Thailand but were going to be transported to ayet-to-be-named third country (a Stratfor source has cited the Philippines as alogical destination). He also allegedly told authorities that, although he wasa member of Hezbollah, he was not a member of the group's militant arm.

AHezbollah official in Beirut, Ghaleb Abu Zainab, told the Lebanese BroadcastingCorp. that Atris was not a Hezbollah member, while Stratfor sources have toldus that he was. Our sources also have confirmed Atris' reported confession topolice that he was on the business side of things -- likely involved inprocurement and logistics -- rather than the militant side, which involves suchthings as bombmaking or operational planning. As a Swedish passport holder,Atris would have much more access to business connections, so it makes sensethat Hezbollah would want to compartmentalize his skills.

Mostother official statements since Gen. Sasiprapha's have focused on softening thethreat and mitigating the damage done to Thailand's tourism industry. ThaiPrime Minister Yingluck Shinawatra has called on the United States to revokeits warning, saying it will damage the country if it is prolonged. Hence, it isnot surprising that tidbits released from Atris' purported interrogation havemoved the spotlight away from the domestic threat and focused more on targetsabroad.

Thehistorical record shows ample precedent for attacks by foreign extremists inBangkok. In 1972, members of Black September took over the Israeli Embassy inBangkok and held diplomats hostage there for 18 hours. In 1988, Hezbollahgunmen hijacked Kuwait Airways Flight 422, which was departing Bangkok forKuwait City, in an effort to coerce the Kuwaiti government to release the"al-Dawa 17," a group of Shiite militants being held in Kuwait. Andin 1994, a truck laden with explosives was en route to attack either the U.S.or Israeli Embassy (the investigation did not yield conclusive results) when atraffic accident disrupted the plot. Bangkok has long been on the map forterrorist operational planners.

Duringthe 1970s, 1980s and 1990s, Hezbollah and other groups conducted dozens ofattacks targeting Jews, Israel and Israel's allies around the world. However,over the past decade, Hezbollah has become a more serious political party inLebanon, and while its international network is still in place, its activitiesare increasingly focusing on illicit business ventures rather than terroristattacks. The shell corporations and drug-smuggling networks that for yearsprovided the means to fund ideological terrorist operations have, in many ways,themselves become the end. Hezbollah members who have grown rich off theinternational network are more interested in spending the cash from the networkand building up political patronage at home than in provoking powerful enemiesabroad. For example, Bangkok is a hub for acquiring counterfeit documents,which are a lucrative commodity around the world and part of Hezbollah'scriminal enterprise. Conducting an attack in Bangkok would likely disrupt anode in the network and ultimately affect the group's bottom line.

Thus,Hezbollah's profile and set of interests support Atris' reported claims thatthe bombmaking materials that police found were being moved out of the countryand were not intended for use in Bangkok or other tourist locations inThailand.

Otherdetails from the case support this scenario. The fertilizer was to be hidden inthe 400 table fan boxes found in the same building, a move conducive tosmuggling the fertilizer, not constructing explosive devices. The sheer amountof fertilizer (nearly 5 tons) is a wholesale amount. The largest vehicle-borneimprovised explosive devices (VBIEDs) in recent history have contained about aton of fertilizer. The device used in the 1993 World Trade Center bombingconsisted of about 1,300 pounds of urea nitrate. Constructing and deliveringbombs larger than that tends to create technical and logistical hitches. It ismuch more likely that such a large amount of fertilizer would be meant formultiple smaller or medium-sized devices.

Whileurea-based fertilizer and ammonium nitrate are key ingredients for the maincharge of a VBIED, many more materials are required to make it a viable device,including nitric acid, which must be mixed with urea-based fertilizer to makeurea nitrate. (Urea nitrate is highly corrosive and has typically been mixedand held in plastic industrial chemical drums. While cardboard boxes would befine for holding the urea-based fertilizer, they certainly would not beheavy-duty enough to contain the urea nitrate mixture.) In the Bangkok case,there has been no mention of other important bombmaking components such asfuses, timing mechanisms or detonating charges or of a competent bombmaker toput it all together.

Inother words, while some of the materials to make a bomb were present in thecommercial building that police raided, there was no viable device there. Norhas there been any mention of weapons such as rifles, handguns or grenades,which are often (although certainly not always) involved in terrorist attacks.Some media sources alleged that Atris was plotting a "Mumbai-like"attack, which would have required a stash of automatic rifles, ordnance,communication devices and other tactical tools that have yet to surface.

Justas Bangkok is an attractive business hub in Southeast Asia for legitimatebusinessmen, it is also an attractive hub for illicit businessmen. In 2008,Thai police arrested Russian arms smuggler Viktor Bout after agents from theU.S. Drug Enforcement Administration, posing as members of the RevolutionaryArmed Forces of Colombia guerrilla group trying to negotiate a deal to buyweapons, incriminated Bout during a meeting in Bangkok. It appears that Atris'role in this case would have been an administrative one similar to Bout's:sourcing the fertilizer, finding a place to stockpile it and concealing it ininnocent-looking fan boxes. This would not make him any less guilty of assistinga militant group, but it would deflate the theory that Hezbollah was plottingto use this material in an immediate attack in Bangkok.

Thisis not to say that Hezbollah or some other militant group will not conduct anattack in Bangkok in the future. But it would take a lot to convince groupleaders that the financial pain of an attack in the city would be worth theideological gain. And the recent alleged plot should remind investigators andpolicymakers to remember the financial bottom line as well as the ideologicalbottom line when assessing future terrorist threats.

Source: Ben West, STRATFOR

Marriott Announces its Strategy for the "Edition" Brand

2012-01-20T04:49:00.000-08:00

Following the PR (and financial) disaster Marriott internationalfaced when the owners of the “Edition”hotel in Waikiki de-flagged the property and sued the company for not keepingup with the terms of the management contract, they now put every effort to showthat Marriott and Ian Schraeger areworking hard on reviving their response to Starwood’sW hotel concept.

The Wall Street Journal reports that Marriott is investing as muchas $800 million of its own money to develop additional Edition hotels in abreak with its typical practice of managing properties for third-party owners.

Arne Sorenson, Marriott's chief operating officer, said Marriott'sdecision to invest in three Edition hotels on its own (on New York, London andMiami Beach) has helped attract third-party owners to the brand.

"To sit and show a prospective hotel owner the Clock Towerbuilding [in New York] and tell them we're buying it and putting in hundreds ofmillions is a very comfortable thing for them," he said.

Indeed, the New York project is about the conversion of the iconicClock Tower building, which Marriott bought for $165 million from prior ownerAfrica Israel USA last year. While design work is already underway, therenovation and conversion of the iconic Clock Tower building will begin in late2012.

“New York is one of the most important destinations in the world,and we are delighted to have secured the Clock Tower as a singular, iconicstructure that will become a flagship for the Edition brand and one of NewYork’s most compelling places to stay,” said Sorenson.

When it unveiled the brand, Marriott predicted it would open as manyas 100 Edition hotels in 10 years. The company initially signed around 10management deals for the hotels but lost many of its partners as the weakglobal economy prompted investors to drop out. “While the rollout of theEdition brand was slowed by the global economic downturn, we remain stronglycommitted to this brand and are dedicated to its continued development andsuccess,” said Sorenson.

Other locations announced include buildings under construction inBangkok, Thailand and Abu Dhabi, United Arab Emirates and a hotel in Los Angeles andGurgaon, India. The Bangkok Edition will be part of a mixed-use development,while the Abu Dhabi Edition will be part of the Al Bateen Harbor complex withinthe Abu Dhabi Marina, a mixed-use development including luxury residential andretail.

Marriott has previously announced two other Edition locations: TheLondon Edition, set to open next year in the historic building formerly knownas the Berners Hotel, is in the city's Fitzrovia neighborhood. Meanwhile, theMiami Beach Edition, under construction in the former Seville Hotel, isexpected to open in late 2013.

"I'm working with what I consider to be the best operators inthe business. As far as I'm concerned, all the other hotel companies are run byfinancial guys and marketing guys and Marriott is the only true operator andthey execute superbly," Schraeger, the hotelier who is also behind PUBLIChotels, told CNBC.

Carlson and Rezidor going as One

2012-01-19T05:30:00.000-08:00

Carlson, the global hospitality and travel company,and The Rezidor Hotel Group, the company responsible for Carlson’s hotel brandsin Europe Middle East and Africa, today announced that they have establishedthe Carlson Rezidor Hotel Group. While the legal status and ownership structureof Carlson and Rezidor remain the same, the Carlson Rezidor Hotel Group willpursue the global alignment and management of its brands, the ambitiousdevelopment of its revenue generation engines, global purchasing opportunities,and people development on a global basis.

Commercialactivities will be conducted under the CarlsonRezidor Hotel Group name, irrespective of geographies but since the twofirms have different ownership structures—Carlson is private, Rezidor ispublicly traded with Carlson as majority shareholder—the arrangement onlyinvolves strategic and tactical maneuvers. The two companies will appear as oneto owners, developers, investors and travelers, even though they’re separatelegal entities.

"Carlsonand Rezidor have a long, common history and have grown together over the past17 years," said Hubert Joly,president and chief executive officer, Carlson. "Going to market as one isa next and natural step. We are leveraging the strengths of two great companiesto create value for all our stakeholders."

Explainingthis development Kurt Ritter, presidentand chief executive officer of Rezidor said: "The goal of this developmentis to generate more attractive financial returns for the owners and greatervalue for all shareholders, to be perceived by business partners around theworld as one global hotel company, to offer more compelling and consistentvalue propositions to the guests, and to offer global career and developmentopportunities to the staff."

Thorsten Kirschke, president of Carlson Hotels, Americas and COO of Carlson Hotels

“It’s notjust the joint name that’s important,” said Thorsten Kirschke, chief operating officer of Carlson Hotels andpresident of Carlson Hotels, Americas. ”Where the rubber really meets the roadis the level of commitment that goes along with sharing of the same name. Thesuccess will be in how the two organizations can accelerate their currentcollaborations from today onward.”

Indeed, thetwo companies have worked closely in recent years, especially since Carlsontook a majority (50.03%) stake in Rezidor in 2010. Rezidor, which is in the toptier of hotel operating companies in Europe, Russia, Africa and Asia, was arole model for Carlson as it rolled out its Ambition 2015 revitalizationproject two years ago. That initiative aims to increase Carlson’s portfolio by50% to 1,500 properties by 2015. Carlson even co-opted Rezidor’s Radisson Bluupper upscale hotel concept to reenergize its flagship brand.

Through anumber of concrete revenue generation initiatives, the Carlson Rezidor HotelGroup aims to generate more than USD 400 million in additional revenue and aRevPAR Index increase of more than 9 points by 2015. These initiatives includea reinforced global sales team; unique revenue optimization tools; partnershipprojects with travel intermediaries, including Carlson Wagonlit Travel; and therapid growth of Club Carlson(SM), the group's successful loyalty program. Thegroup will pursue the global alignment and management of its brands to ensurethat its guests enjoy a compelling and consistent value proposition around theworld. Joint purchasing activities entail the development of competitivesourcing agreements, especially for high-spend and business-criticalcategories. Global people development programs also will help the CarlsonRezidor Hotel Group fulfill its ambition to be the number one hospitalitycompany to work for.

“Therevenue generation initiative started before we committed to a joint name,”says Kirschke. “We’ve already deployed $62 million in revenue managementcapabilities, structures, resources and technologies, and that’s aimed atgenerating incremental revenues north of $400 million for the systems.”

About half($30 million) of that initial investment went to digital efforts, includingmobile web, apps and home page upgrades as well as a vigorous social mediastrategy. Another $17 million was used to improve revenue optimizationtechniques. Tactics planned for the next three years includes programs in thoseareas as well as additional upgrades to the Club Carlson loyalty program.

The newentity will be controlled by a global steering committee co-chaired by Hubert Joly, Carlson’s president andCEO, and his Rezidor counterpart, KurtRitter. The group has a new logo and new website that launches Feb. 1. Thenew venture starts with five major priorities: global alignment and managementof the brands, development of revenue generation engines, leveraging globalpurchasing opportunities, people development on a global basis and seamlesscommunications to stakeholders.

For ownersof Carlson properties in the U.S., Kirschkesays the global footprint of the new company can bring additional business totheir properties. Whereas a typical Carlson property in the U.S. gets 70% to80% of its business from its own geographic region or elsewhere in the country,he believes the combined company “means a greater exposure to the global world oftravel and a better opportunity to capture more of that intercontinentaltravel.”

With 1,319properties open or under contract in 80 countries, the new company becomes theninth largest hotel company in the world by number of rooms (209,000 at the endof 2011). Worldwide annual system revenues top $7 billion.