Mr. Donaldson

Hotel Market Reports

American Consumers in a Global Market Place: What Are Foreign Hotels Doing?

By Edward Donaldson, VP Marketing, Small Luxury Hotels of the World

As the power of the Dollar has continued to lessen over the last year or two, savvy travelers have sought out new and interesting destinations. Mexico and the Caribbean have both seen direct impacts from this change with attractive airfares, more frequent lift and room inventories that continue to grow. Shoulder periods have become smaller and smaller and interesting packaging taking advantage of the local resources and assets has proven to be most successful.

Markets in Central and South America have seen burgeoning levels of travelers to their destinations. Asia, although horribly affected by the Tsunami crisis, enjoyed upward growth in the last year with new visitors broadening their horizons and taking advantage of widening international borders with visits to Vietnam, China and the South Seas. These destinations are perceived as offering a very advantageous value for the money. With the currency situation precarious and travelers looking further a field for value, what do the traditional destinations in the United Kingdom and Europe do to protect and attract their business? What do the little guys do to stay competitive?

The segment of the hotel industry that remains the most vulnerable is the independent small luxury property. These hoteliers are faced daily with the challenge of maintaining standards, offering value and competing with operations that often have more flexibility. The fortunate advantage that these hoteliers have is normally operating with fewer rooms to fill each night. In the last 15 years, hoteliers, especially in the independent sector, have faced these difficult challenges.

By utilizing the marketing prowess of organizations such as Small Luxury Hotels of the World as well as the multiple distribution channels offered, the independent hotelier has an advantage over much of its competition. Getting the message out to the consumer about the opportunities is the key to ensuring success. In the past, hoteliers have offered incentives such as dollar for pound rates. These were traditionally done through the larger chain operations such as Hilton, Starwood & Radisson.

As the year began in 2004 and the socio-political climate in the UK & Europe needed to be addressed, the independent hoteliers employed the same strategies with a twist in an effort to ensure that they were able not only to ensure their regular guests were protected but were also attracting new potential guests. Being independent hoteliers, they were also able to ensure that these offerings were not perceived as "bargains" but true values.

Such hotels as The Stafford and Athenaeum in London, Hotel Vernet in Paris and Hotel Art in Rome all designed specific offerings for the discerning US traveler whilst maintaining the standards of service and luxury that have made them synonymous with the best of the best. The Stafford in London decided to offer a guaranteed exchange rate of 1.75 despite that day's trading insuring guests a specific rate while The Athenaeum has made the dollar equal to the pound. Hotel Vernet in Paris simply offered a rate with which the dollar was equal to the Euro allowing American guests to enjoy Superior rooms for $280 instead of 280 Euros.

With the success of these packages in the first quarter of 2004 both in terms of exposure and occupancies, many hoteliers throughout these regions saw great opportunities to expand the concept. Additionally, hotels in other regions of Continental Europe, as well as the British Isles, that had never before aggressively marketed to the American traveler, found a new outlet to expand their business by following suit. As an example, hotels along the C^ote d'Azur in France such as La Tartane, St Tropez and Hotel Juana, Juan les Pins as well as Villa Real in Madrid have taken this opportunity to differentiate themselves from the competition and reach out to the dollar-conscious American traveler. Although many of these guaranteed rates offer a savings of near 25%, it is not seen as a discount by the consumer but yet a nice gesture on behalf of the property recognizing the importance of the American traveler.

After nearly a year of these programs, we find these trends continuing to grow and as a result, new markets blossoming. To the independent hotelier, these benefits are immeasurable. The key to the American consumer seems to rest in the ability to offer value while not sacrificing services and ensuring each guest experience is not a one of a kind event, but something they will wish to continue to partake in again and again.

Ed started his career with Servico, Inc as Director of Sales for several franchised Hilton properties. After a move to New York he became Director of Sales for The Royalton. Ed also served in regional positions with Pegasus Solutions. He has headed up the sales efforts for Summit Hotels, Sterling Hotels, Golden Tulip Worldwide and Rosewood Hotels. Ed has served as Regional Director, UK for TravelCLICK and VP of Sales for hubX, recently purchased by Pegasus. Ed currently is VP, Marketing, The Americas for Small Luxury Hotels of the World. Mr. Donaldson can be contacted at 212-953-2064 or ed.donaldson@slh.com Extended Bio...

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