Digital Transformation » Systems & Software » HOTELS – No discounted room at the top

Business travellers seeking out room bargains from international city centre hotels can think again: the present buoyancy of business travel has given hoteliers little incentive to offer rooms t the sort of prices available a few years ago in the post-recessionary environment.

New figures just released from American Express, which carries out a quarterly monitor of business travel costs, shows that deluxe hotel rates across Europe rose by an average of 13% in the second quarter of 1997.

London, Edinburgh and Milan showed the biggest year-on-year increases of between 11% and 16%.

Borge Ellgaard, American Express’s vice president for hotel group relations in Europe, points out that UK price rises are almost entirely to do with high occupancy levels, especially in London. “High demand and strong economic growth are putting upward pressure on hotel rates,” he says.

But others in the travel industry are more explicit in their criticism of the hotel sector. “Hotels are being very blinkered,” says Mike Platt, commercial director of the Hogg Robinson business travel agency. “Just because economic times are good and hotels are virtually full-up during the week, they think they can ‘whack’ the business traveller with higher rates.”

The position, he adds, is not much better for companies who have negotiated special corporate rates with hotels. “Increasingly we are hearing reports of hotels that are making it difficult to find rooms for these business travellers at certain times,” he explains.

Platt says hotels are behaving more and more like the airlines. He feels this is more to do with centralised hotel procedures than the policy of general managers at individual hotels. Increasingly, hotels are becoming big business and are adopting tighter financial controls.

The new spirit of hard-nosed business sense pervading the hotel sector has manifested itself in a number of ways. The latest is specially-designated executive rooms: standard hotel bedrooms which have been given a refurbishment with added refinements to appeal to executives on the move. The drawback is that guests are expected to pay an extra #20 or #30 a night for the privilege of staying in these rooms.

Inter-Continental Hotels, for example, is currently introducing such executive rooms into its flagship London properties at Park Lane and Mayfair.

Michael Stajdel, a senior marketing vice president with the hotel group, claims the business rooms are being introduced following a survey of some 6,000 regular international business travellers. “They told us that a significant proportion wanted to use their hotel rooms as mini-offices while they were away and were willing to pay for the privilege,” he says.

Hence, these rooms, limited to just 5% of each hotel’s total rooms at present, include large desks with office stationery such as a stapler, paper clips and note pads. Built into the desk is a Hewlett-Packard Office Jet Model 300 workstation, a combination printer/fax/copier compatible with virtually all personal computers. Two-line telephones with voice-mail and modem facilities are also included.

Other features include an ergonomically-designed chair and new metal halide lamps which generate 75% less heat than normal lights but still project a strong, albeit soft light with lower glare onto computer screens.

The room, which is a standard one rather than a suite, costs an extra #40 a night for use of these facilities.

Specially-designed executive rooms are the logical extension of business floors which have become a feature of some European hotels in the past few years, although they have been longer established in the US and Far East. At an average extra cost of between #15 to #30 a night, guests get the benefit of a better equipped room, a wider selection of toiletries, use of a lounge and access to free food and beverages, including alcohol, at certain times.

Yet it is difficult for corporate travel buyers to believe that staying on hotel club floors is as necessary to their executives on the move as travelling in business or first class on the aircraft. While hoteliers in the Asia-Pacific region report little consumer resistance to paying extra for an executive floor, those in Europe tend to have more difficulty in persuading their guests to join the club. Officially, the hotel chains are very happy with the level of demand; unofficially, some hoteliers wonder whether or not the cost and effort is worth the return.

For example, Four Seasons chairman Isadore Sharp does not believe in guests paying extra for an executive floor in the luxury Four Seasons chain (which includes the former Inn on the Park in central London and the Four Seasons Milan). “We work on the policy that we provide the best level of service and amenities for all our guests,” he says. “Why should they have to pay extra?” Yet he has been forced to accept separate executive floors in his largely Asia-based Regent hotels.

According to Hilton, there is also a different attitude towards use of the executive floor lounges. British business travellers, for example, see their use primarily as a place to relax after holding meetings outside the hotel. German executives, on the other hand, typically like using the lounges to meet business associates. Women executives, according to Marriott, like club floors because of the extra security they provide and a place to socialise in the evening to avoid the hotel bar.

Unlike business classes on airlines, the proliferation of executive floors in hotels means standards can vary enormously, depending on whether the hotel is new or old and which city it is in.

Whether business travellers really want an office away from home is less certain. Craig Parsons, vice president of marketing for Hyatt International, reveals that it no longer automatically installs fax machines in its concierge-level rooms. “Many business guests,” he explains, “have been irritated by faxes going off in the middle of the night or simply don’t know how to use them.” Others prefer to use lap-top PCs to download faxes or data.

“If people want a fax machine in their room we will provide one, but the answer for many is to ensure our business centres are open 24 hours a day,” he adds.

Whether business rooms and floors represent good value for companies remains doubtful. Dev Anand, a director of hotel reservations specialist First Option, part of the Thomas Cook group, is firm in his belief that they are a “rip-off”. He argues that hotels are pushing for a premium payment for such rooms and floors to push up yields. “Why pay more for a better room in a four-star hotel when you could trade up to a five-star?” he says. “In about six out of every 10 cases of executive floors and rooms, you are really struggling to find the difference between what you get and what you should expect to get from a room.”

He does admit, however, that there can be a case for staying on a business floor in a large hotel. “But there is no real case for hotels trying to push their rates up by offering refurbished rooms – for that is all they basically are – at a premium price. However, in the current market they think they can get away with it.” For how long, however, remains a moot point.

The company apartment

The hottest new trend for budget-conscious business travellers is staying in an apartment-style hotel. French hotel group Orion has just opened its third London apartment hotel following two others at Covent Garden and the Barbican. Orion has another 34 similar hotels around Europe.

Rates at the Orion Trafalgar start at #99 per night for a studio accommodating two people and include a fully-equipped kitchenette.

The attraction of apartment-style hotels is that they offer many of the conveniences of traditional hotels – including a lobby and reception staff – but with the added benefit of small kitchen and laundry facilities.

They are especially popular with executives who have to stay some time away from home on business – such as an accountant carrying out a regular audit – and they generally work out cheaper for two or three colleagues than if they stayed in a regular hotel.

At the Athenaeum Hotel & Apartments overlooking Green Park in central London, facilities include full business communication facilities, such as fax/modem, voice-mail and direct-dial two-line telephones, along with a CD music system and video cassette player.

The Tower Thistle Hotel, located adjacent to Tower Bridge and convenient for the City of London, has also recently scrapped an entire floor of 29 rooms to create just 12 apartments, each with its own lounge and kitchen.

It has also gutted an adjacent staff accommodation hostel to provide a further 12 luxury apartments. Rates start at #390 a night for a one-bedroom apartment.

A complimentary copy of the 1997 Guide to Serviced Apartments published by the Apartment Service is available from 5-6, Francis Grove, Wimbledon, London, SW19 4DT, UK. Tel: (0181) 944 1444. Fax: (0181) 944 6744.

Staying on-line around the world

Business travellers who check into the Inter-Continental Hotel on London’s Park Lane can now switch on their in-room television and, by using a remote infra-red keyboard, immediately access the Internet, catching up on latest news and developments from around the world and send and receive e-mail messages. GlobalNet TV, as the hotel calls its system, is due to be rolled out over the next year in all Inter-Continental’s 150 hotels world-wide and represents a significant step forward in linking frequent business travellers into the information superhighway.

“We asked our regular business guests what they wanted from new communications facilities and they overwhelmingly said they wanted e-mail access while away, along with certain types of information, such as home-town newspapers and local entertainment and other information,” explains Mike Stadjel, Inter-Continental’s marketing vice-president. Better still, the Inter-Continental system is virtually idiot-proof.

Anyone who can use a TV remote control can operate the Inter-Continental system, which is charged at local rates of 25p a minute.