Robert Boulogne, COO of Dallas-based Rosewood Hotels & Resorts, spoke recently to MeetingNews associate editor Michael B. Baker about the outlook for luxury meetings, hotel development plans and the negotiating strategies that meeting planners are employing during the downturn.
MeetingNews: Have you seen signs of recovery in your group business?
Robert Boulogne: In the past month or month and a half, the pace has picked up for our phones relative to the meetings business. We've turned a corner, and there are people willing to commit now to the meetings. There are still organizations saying that they shouldn't be seen this year having a meeting in a luxury hotel. We are still wrestling with this on occasion, in that our rates might be the same as a lesser brand, but companies have to be concerned about perception. It's calmed down, but that element still exists.
MN: What's your strategy been in attracting meetings to your properties?
Boulogne: We've gone with the value-added approach. We have Rosewood Connections, our design to offer meeting and event planners the best offers available. The package right now includes a 3 percent credit to your master bill for guest room revenue, 10 percent off for food and beverage, a 20 percent credit on in-house A/V use, a 20 percent credit on all spa services, complimentary guest-room Internet service, complimentary general session Internet service and one VIP suite upgrade.
MN: What are meeting planners looking for in negotiations?
Boulogne: They are a bit more insistent on getting better value or a discount or a deal just because they believe that's the lay of the land. Rosewood's position on that is that we very much want to be a part of that and not rest on our laurels. For the right set of dates and the right piece of business, we're going to be in the game.
MN: Are companies trying to leverage meetings and transient travel to a single sales contact?
Boulogne: We call that total account management. For the most part, however, we have people who call on group and people who call on transient. We've maintained that position.
MN: How has the economy affected your business?
Boulogne: Where it's going is still unclear. We had a very strong 2008. The fourth quarter of 2008 was when we began to see a bit of a downturn. The first and second quarters of this year were off from last year quite significantly. We really look at the revenue per available room component, and we take our competition set in each city and determine how we're doing. That's the only measurement that is relevant to us.
MN: Any predictions on a turnaround?
Boulogne: I'm very optimistic about the future. There's a lot of pent-up demand out there. Maybe toward the last quarter of this year or the first quarter of next year, we'll start seeing the benefits of that. We are trying to be very thoughtful in how to manage this downturn without interfering with our service levels. We've been able to cut back in areas that do not impact the guest experience.
MN: What markets are strongest for Rosewood?
Boulogne: Some of the markets that have performed well are in the Middle East, and the Caribbean has done reasonably well. Some of that has been at the expense, unfortunately, of what has happened to us in Mexico. The swine flu breakout killed all travel to Mexico. Cancun was running something like 14 percent occupancy. New York has been a pretty good story. We're down year over year, but we're up on our competitive set. Dallas and Atlanta, the corporate markets we play in, have been pretty challenged. We just opened the Mansion on Peachtree last year in Atlanta, and because we're only 18 hotels, any opening for us is a positive thing. We did open into a market that has really suffered quite a bit, but we are holding our own.
MN: What properties will you open soon?
Boulogne: We just opened about two months ago the Rosewood Sand Hill in Menlo Park, Calif., a corporate hotel and meetings hotel. We're calling it an urban resort setting. It's a beautiful hotel, and that market seems to be doing reasonably well. We're adding 100 additional keys at the Al Faisaliah Hotel in Riyadh, and those will be opening first quarter of 2010. Jumby Bay in Antigua will have been closed for 18 months when we reopen on Dec. 1.We did $28 million in renovations, basically redoing the entire resort. Also under construction, we have the Rosewood San Miguel in Mexico that will be opening the latter half of next year. San Miguel is up in the mountains, about a three and-a-half-hour drive from Mexico City. The Rosewood Abu Dhabi is under construction as well, and that is due to open in 2011.We also have a property under construction in Dubai.
MN: Has the economy delayed your projects?
Boulogne: We did have a number of projects that have gone dormant for financing reasons. The model of building a resort where you're using real estate to pay for the hotel is definitely on hold. There are not a lot of people buying real estate, and there's no money to finance these projects. Getting new-build projects will be challenging for the next year or so. The opportunity for Rosewood will be conversions.
MN: What markets are your next targets?
Boulogne: We'd like to be in Chicago, Washington, D.C., and Los Angeles, domestically. We also need to get into London and Paris.
Originally published July 27, 2009