Giddy over the hospitality industry's recent strength, and while new hotel construction is still booming, many hoteliers are introducing new brands. Two premieres were announced last month alone, following a geyser-like explosion of entrants into the market last year and in 2005 as well.
The new product is spread over a total of 24 brands launched in 2005 and 2006. It is the most brand premieres in a two-year span since 1989, according to PricewaterhouseCoopers. The product is varied but for the most part promises high-end service and creature comforts.
The chains behind this trend range from household names — Hyatt, Starwood, and Hilton — to new players like LXR Resorts and Lifestyle Hospitality.
"The boom in construction activity makes this an appropriate time for new brands," said Bjorn Hanson, principal of PricewaterhouseCoopers' hospitality and leisure group based in New York. "There was a 0.3-percent supply increase in 2006, according to Smith Travel Research, and our forecast is 1.6 percent growth this year and 2.3 percent in 2008. The average supply growth rate is 2.2 percent — this is dramatic.
"If new hotels weren't being added, these efforts would be a waste of money" as there'd be marketing without actual locations to promote, Hanson said.
What's in a Name?In April, Hyatt came out with the Andaz brand (which means personal style in Hindi) offering "attentive service that is not pretentious" plus "innovative design."
"There are boutiques that have very distinctive style, and there are luxury hotels with impeccable service, but one doesn't find the two in [a single] hotel. Andaz will provide both," said Tom O'Toole, chief marketing officer of Hyatt Hotels.
On average, Andaz hotels will feature 200 guest rooms and about 400 square feet of meeting space. Groups won't necessarily be the prime target, but "this type of property will work well for broad audiences including incentives and corporate board meetings," said O'Toole.
Hyatt has identified 50 Andaz-ripe markets, all major cities, including London and New York.
SBE Hotel Group, a Los Angeles-based firm, is turning the Le Meridien at Beverly Hills into its first hotel under a luxury concept called SLS Hotels. SBE has enlisted Starwood to manage the hotel after a complete renovation as well as all future SLS properties.
The SLS brand aims to fill the gap between high-end hotels that offer white-glove service and edgy boutiques that are too hands-off, said Arash Azarbarzin, president of SBE. The company is eyeing gateway cities, such as San Francisco, Chicago, New York, and Miami, for SLS properties; there is no prototype yet.
Last month, Starwood came out with an ambitious plan to open 18 "aloft" hotels in India —the aloft brand debuted only in 2005.
In 2006, the Waldorf=Astoria Collection and Le Crillion debuted in the luxury segment, while 2005 marked the premiere of LXR, Alden Hotels, and NYLO Hotels, to name a few.
Different StrokesMeeting planners were mixed about the brand influx. "They sound like cars or bistros," said Joan Eisenstodt, a Washington, DC–based independent planner. "Figuring out what these cutely named hotels are will be a challenge."
Karen Malone, vice president of meeting services at the Healthcare Information and Management Systems Society, in Arlington, VA, agreed. "There's a lot coming out of the gate at one time and it can be confusing," she said. "Hotel and brand information needs to be in all meeting marketing materials."
But Malone would happily try a new chain. "If it aligns with our attendees' needs and has an affinity with a recognized, reliable company," Malone said she would consider a meeting at one of the new-chain properties.
Others were less sure. "Absolutely, the opening of new hotels gives us more options," said Eli Gorin, an Aventura, FL-based independent planner, "but like any new hotel, I may be a little hesitant to give it a shot until it has been tested out."
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