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: A Culture of YES

In a recent global consumers report, 97% of the participants said that customer service is a major factor in their loyalty to a brand, and 76% said they view customer service as the true test of how much a company values them. And since there is no industry more reliant on customer satisfaction than the hotel industry, managers must be unrelenting in their determination to hire, train and empower the very best people, and to create a culture of exceptional customer service within their organization. Of course, this begins with hiring the right people. There are people who are naturally service-oriented; people who are warm, empathetic, enthusiastic, pleasant, thoughtful and optimistic; people who take pride in their ability to solve problems for the hotel guests they are serving. Then, those same employees must be empowered to solve problems using their own judgment, without having to track down a manager to do it. This is how seamless problem solving and conflict resolution are achieved in guest service. This willingness to empower employees is part of creating a Culture of Yes within an organization.  The goal is to create an environment in which everyone is striving to say “Yes”, rather than figuring out ways to say, “No”. It is essential that this attitude be instilled in all frontline, customer-facing, employees. Finally, in order to ensure that the hotel can generate a consistent level of performance across a wide variety of situations, management must also put in place well-defined systems and standards, and then educate their employees about them. Every employee must be aware of and responsible for every standard that applies in their department. 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.