CNBC Business | Keys To Success

Keys To Success

Technology and a new generation of cost-conscious business travellers are forcing hotels to rethink how to keep the customer satisfied. Lucy Fitzgeorge-Parker reports on the latest trends in the industry

RATES OF INTEREST

With the recession eating away at the hospitality industry, there are reports of hotels cutting down on freebies such as toiletries, but most are offering anything they can to win business. It is hard to think of an international chain that hasn't done some variation on the free nights theme. Luxury brands such as Four Seasons and Dorchester Collection have generally gone for the three-for-two model, in the hope of keeping customers on the premises and so spending on those high-revenue extras, while names such as InterContinental have been wooing business travellers with the chance to earn free weekend stays when they're on the road. Free breakfasts, Wi-Fi and laundry services have also been wheeled out in an attempt to attract customers, as has the promise of the occasional nixed bar bill or some other ‘random act of generosity' — an idea espoused by the likes of Hyatt and Starwood. The common theme is that, in order to get the benefits, guests have to sign up to a loyalty programme — the hotels' way of salvaging something from the free-for-all. Of course, although the story from the industry is that these offers are bridging the gap and enabling them to cling on to their headline rates, the reality is a bit different. Quoted prices may stay the same, but those all-important corporate customers are now driving very hard bargains, with many attempting to renegotiate, or lock in new long-term, contracts. For most hotels, the pain is likely to continue for a long time to come.

HOMES FROM HOME

Today's generation of road warriors aren't impressed by fussy flunkies and overpriced minibars — they want independence and a decent-sized can of Coke. What they want, in fact, is something which looks more like home, which is where select-service hotels come in. With these, you get a bit more space, a kitchenette with a fridge and microwave, and a communal laundry room. The concept has been around in the US for decades, but 2008 saw a rush by the chains to take it global. Starwood launched the Aloft brand in the US last year (it already has 31 properties in North America and one in Beijing, and plans for a further 100 in the next two years), and its eco-friendly select-service sibling Element, which it plans to roll out to the Middle East and Asia. Meanwhile, Hilton has brought its Garden Inn offering to the UK and Italy, and InterContinental launched its Staybridge Suites in Liverpool and Cairo, and will add properties in Newcastle, Abu Dhabi and St Petersburg by the year-end. Strictly speaking, Staybridge Suites comes in the extended-stay category — aimed at relocators and project workers — and would have been traditionally classed with serviced apartments. But the current enthusiasm for freedom and space has seen an upsurge in demand for these properties for shorter stays. "It's a different age of travellers: they're more independent, they provide their own entertainment and work via their laptop and iPhone. All they want is somewhere to sleep and eat," says Jo Layton of global serviced apartment provider BridgeStreet. "And if you're in a hotel and order room service, it may come on a beautiful trolley but you still have to eat it on the side of the bed." Even traditional hotels are taking note — the gargantuan Park Plaza Westminster Bridge in London, due to open early next year, will have microwaves in each of its 1,021 rooms. Rooms in New York's hippest hotel, The Ace, contain full-size Smeg fridges.

ONLINE AND ON-MESSAGE

For hotels, social networking offers the promise of free advertising, targeted marketing and instant customer feedback, and they're desperate for a piece of the action. Search for any brand on Twitter or Facebook, and chances are you'll find a friends' group or a staff member tweeting about the delights of their hotel — join up, or tweet back, and you've made an invaluable connection. So eager are hotels to build their online communities they're offering a range of benefits for early adopters, from discounts to treats."If a guest tweets that they've had a really hard day and they're looking forward to a cold beer, we might ‘surprise and delight' them with a free beer when they get to the hotel," says Daniel Kerzner, Starwood's director of marketing for north-west Europe. Social networks can also take the hassle out of complaining. It's no longer a question of asking to see the manager or emailing when you get home — if you have a lousy experience at reception and tweet about it on your phone in the elevator, you could get an apology by the time you reached your room. According to Kerzner, in a few years' time social networking will be the driver of customer relations: "I predict we'll have people dedicated to monitoring the networks and RSS feeds." The rise of the iPhone has also switched hotels on to the power of YouTube. Once, travellers would share their experiences on TripAdvisor; today, they're uploading videos showing every detail of their rooms, down to broken shower fittings and hairs in the basin. Now hotels are countering with their own YouTube creations; Starwood even has a TV channel on the site for its Westin brand. Of course, it was only a matter of time before hotels harnessed the power of the iPhone more directly: in August, Hilton launched an app that enables guests to monitor bookings, profiles and HHonors status, as well as linking in to the hotel's GPS. With iPhones gaining market share, expect to see other chains following suit.

CONNECTING WITH CUSTOMERS

Free Wi-Fi is still the business traveller's holy grail. High-end hotels, in particular, are holding out, trusting that guests who are already paying through the nose for rooms will keep ponying up €20 a day for connectivity. But these charges are getting harder to justify. Chains huff that free internet access in guest rooms would mean raising rates. They claim that it's cost-effective in the US, where they deal with only one network provider, but not in Europe. But given that they've starting offering it in selected brands — including Hilton's Garden Inn, Starwood's Aloft and Hyatt's Andaz — it seems like it can't be much longer before they bow to the inevitable. For the moment, the majority of properties are still only grudgingly providing free lobby access, but with growing discontent from the business-traveller community — influential blogs like HotelChatter regularly name and shame the worst offenders — paying for the internet could soon be a thing of the past. New design hotel Roomers in Frankfurt offers a free, slower connection or a faster, paid-for service; chains such as Omni and Hyatt are making access free for members of their loyalty programmes; and there are rumours that some hotels are planning to follow a model in use at airports such as London City and ask customers to add their details to a marketing database in return for free Wi-Fi. Of course, you can increasingly connect to hotels without ever checking in. Companies looking to cut spending will welcome the arrival of next-generation Telepresence videoconferencing suites. Tata Communications, owner of Taj Hotels, has already rolled these out in properties in London, Boston, Manila, and several Indian centres, and recently signed a deal with Starwood to introduce them in some Sheraton and Westin brands in major hubs including New York, LA, Brussels, Paris, Hong Kong, Tokyo and Singapore.

FLYING HIGH

The era of the airport hotel as a byword for dismal décor and unappetising food for stranded passengers is finally changing. Airline alliances have dramatically reduced enforced stopovers; global outsourcing and rocketing inner city room rates have made hubs the obvious choice for meetings and conferences; and the deteriorating airport experience has created demand for a relaxing antidote. The result is a new generation of airport hotels, design-led and tailored to the needs of a much wider variety of travellers. Hilton is leading the way, with ultra-sleek spa properties recently opened in Madrid, Helsinki and Copenhagen, while the select-service Garden Inn brand made its European debut at London Luton and now also has a presence at Rome Fiumicino. Both brands will also launch next year at Frankfurt as part of the new AirRail development, with the Hilton offering a lavish presidential suite and stunning views from its top-floor wellness centre. Other recent high-end additions include the plush Sofitel at Heathrow's Terminal 5, which has some of the biggest conference facilities in London, and the Radisson Blu at Zurich; while at the budget end Yotel and CitizenM have brought the Japanese pod experience to London and Amsterdam. With airports rapidly transforming themselves into major out-of-town centres, the choice for passengers looks set to get better and better.