Two Dark Horses Have Emerged In the Coming Competition Between Multi-family Apartments and Extended-

By William A. Brewer III Managing Partner, Bickel & Brewer | January 14, 2010

In One Corner: Extended-stay Hotels Are All Grown Up, Attracting the Business Traveler and Becoming Upscale Alternative Accommodations

Modest Beginnings

Extended-stay hotels have come a long way. In the eighties, these alternative economy accommodations catered to families and budget travelers in off-the-beaten-track locales. From the start, Extended-stay hotels became popular by providing travelers with a home-away-from-home experience. Amenities like kitchenettes and laundry facilities at discounted rates allowed travelers to save on food and other expenses during their extended stay. This feature, as well as increased quality and emerging upscale property offerings, have made Extended-stay hotels as popular as ever, even in a challenging economy. In fact, while amenities vary depending on the property, this rapidly growing segment of the lodging industry still shows no sign of slowing down.

Gaining Popularity and Attracting the Business Traveler

In 2007, nearly three-quarters of all hotel guests were away from home on business. Extended-stay hotels are attracting these business travelers, with Extended-stay hotel guests increasing rapidly, especially among mid-price and upscale properties in targeted markets with strong Extended-stay demand. Cities with a significant transient element account for the highest number of Extended-stay hotel rooms with Atlanta leading the U.S. Extended-stay market followed by Houston and Washington, D.C.

This guest segment sees a home-away-from-home experience as a welcome change to the standard business hotel. The increase in popularity has resulted in improvements in quality and amenities. Many budget hotel chains have entered the Extended-stay arena. Choice Hotels International, franchisors for name brands like Comfort Inn and Quality Inn, have opened Extended-stay properties. In addition, the more upscale element hotels, Westin's newly unveiled eco-conscious chain, are ensconced in the suburbs of several busy business hubs where demand for Extended-stay hotels have grown in recent years.

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Guest Service: Empowering People

Excellent customer service is vitally important in all businesses but it is especially important for hotels where customer service is the lifeblood of the business. Outstanding customer service is essential in creating new customers, retaining existing customers, and cultivating referrals for future customers. Employees who meet and exceed guest expectations are critical to a hotel's success, and it begins with the hiring process. It is imperative for HR personnel to screen for and hire people who inherently possess customer-friendly traits - empathy, warmth and conscientiousness - which allow them to serve guests naturally and authentically. Trait-based hiring means considering more than just a candidate's technical skills and background; it means looking for and selecting employees who naturally desire to take care of people, who derive satisfaction and pleasure from fulfilling guests' needs, and who don't consider customer service to be a chore. Without the presence of these specific traits and attributes, it is difficult for an employee to provide genuine hospitality. Once that kind of employee has been hired, it is necessary to empower them. Some forward-thinking hotels empower their employees to proactively fix customer problems without having to wait for management approval. This employee empowerment—the permission to be creative, and even having the authority to spend money on a customer's behalf - is a resourceful way to resolve guest problems quickly and efficiently. When management places their faith in an employee's good judgment, it inspires a sense of trust and provides a sense of higher purpose beyond a simple paycheck. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.