Our innovative development team is eager to work with investors and partners on new projects. We believe that a strong outlook for hotel performance in a liquid market creates an imminent need to continue pursuing property acquisitions, as well as the development of new-build hotels where there are distinct pockets of opportunity. We explore all opportunities for the near-future and beyond, and manage our development growth to have several projects in the pipeline at all times, in diverse segments and locations.
It takes years to conceive, design, finance, build, and finally, open a hotel. Our team goes through extensive due diligence, careful analysis, and group evaluation with each project. Every market does not justify a new hotel, and every acquisition opportunity must align with the company’s vision. In many cases, the best solution is to continue searching for the right opportunity.
Deciding on the right brand for each marketplace is not an exact science, but an art form. We look at franchise-building incentives, prepare several studies, and explore all opportunities before selecting a brand. We choose only the top franchisors and use their marketplace position as a barrier to entry. We are committed to delivering on the brand’s promise with each of our hotels, and have a strong reputation as a franchise partner amongst all the key hotel brands.
Stonebridge Companies has a particular culture of commitment to its investors. We are passionate about our responsiveness to our development objectives, and measure success by maintaining strong relationships and a healthy bottom line.
According to the U.S. Bureau of Labor Statistics, the national unemployment rate currently sits at 3.6 percent, a 49-year low. While state unemployment rates may vary slightly, this overall number is the lowest level since December 1969.
A low unemployment rate is indicative of a strong economy. It is advantageous to individual workers because they can more easily secure employment to provide for their families. And when people are employed, they have more money to spend, resulting in a strong economy.
But a downside often overlooked during strong economic cycles is the accompanying difficulty in recruiting and retaining talent. The hospitality and tourism industry is no exception. In December, there were 978,000 current openings in the hospitality industry. This is a challenge for an industry already struggling with annualized turnover north of 70 percent.
A great statistic to watch is the U.S. job quits rate, which tracks how likely a team member is to quit his or her job. This number has doubled since its nadir in 2009. In a candidate-driven market, fewer people are actively searching for work and businesses must be relentless in their efforts to both attract potential team members to fill open positions and ensure current team members remain with the company.
Consider Commute Options
Many of our markets have experienced significant growth in recent years, and the costs of living and housing markets also have boomed. Employees across industries endure longer commutes, not only as the population grows but also as workers move farther away from the city center, where the cost of living is increasing most rapidly. Downtown properties often face the highest team member turnover due in part to the associated high cost of living.
Recognizing the importance that commutes can play in recruitment and retention, hotels ought to evaluate transportation options near the property and consider commuter programs. For example, to help alleviate any hurdles to successful employment that commutes may present, properties that sit along a bus route or rail service could support passes for team members or downtown properties could provide employee parking.
Do not underestimate the importance of a thoughtful onboarding and training process. When you are early in the relationship with your team members, these are critical times to both show them your compassion and properly prepare them for their duties. As a manager, do not be shy about asking about their career aspirations and their long-term goals. There is a strong possibility that their previous employer never asked those questions.
Regular Touch Points with Team Members in the Early Days
Identifying a new team member’s aspirations—and potential work challenges—early on in the hiring process can make a significant difference in helping to curb any concerns that may hinder his or her retention at the hotel. By having check-in conversations with new team members, leadership at the property can help to provide team members with tools for success and make any course corrections in the early stages of employment.
Showing interest in a team member’s workplace satisfaction also helps foster a quality team rapport, which can make a significant impact on retention. This effort can prove especially beneficial in cases when team members have been hired because they fit the culture and personality needs of the property, with the understanding that leadership can help teach the job skills. Building a strong working relationship with and displaying an investment in employees provide intangible benefits that can be rare to find in competing workplaces.
Become an Employer of Choice
With the unemployment rate near record lows, companies are doing more to attract talent from a shrinking pool of candidates, meaning job applicants have more options and the risk of losing current team members to competitors or other industries has never been greater. In order to overcome this obstacle, hotels must strategically plan for team member recruitment and retention. Becoming an “employer of choice” does just that.
An employer of choice provides many features for its team members. The most obvious factor is competitive pay and benefits, which, while important, should be only a piece of a hospitality firm’s larger retention effort. Other factors should include:
Strong team member engagement and culture
Career development and advancement opportunities
Social responsibility and community investment
Incentives such as referral and performance bonuses, and perks ranging from provided lunches, free lodging options, English as a Second Language classes, flexible schedules and employee and family events go a long way in demonstrating care and concern for team members. Businesses and guests both benefit when team members are engaged and enjoy the work they perform.
Supporting the development and growth of team members is essential, not only for the retention of current team members but also in attracting talent to your organization. Internal initiatives such as apprenticeship and leadership training programs keep team members engaged and encourage them to stay with the company rather than being lured away by a competing offer. When current and potential team members see opportunities for promotion and career development, they become champions for your organization.
It should come as no surprise team members want to work for companies that invest in the causes and communities they care about. Giving, not only of money but also of time, to charitable organizations helps to attract potential talent while retaining current team members, separating your company from competitors within and beyond the hospitality industry. Activities with local charities also really help to foster a sense of culture within your hotel.
Low unemployment is a strong indicator of a robust economy, but with it comes the associated difficulty of recruiting and retaining talent. However, incorporating sound staffing strategies can help to mitigate that challenge. When strategic efforts are paired together, hotel properties will succeed in both attracting and retaining team members in an otherwise tight labor market—which benefits employers, team members and guests alike.
Chris Manley is the COO of Stonebridge Companies, a privately owned hotel owner, operator and developer headquartered in Denver.
Block-spanning campus is being redeveloped into a 250-room hotel the developer says will link back to its educational past
The lives of countless young people were transformed on the campus of the historic Emily Griffith Opportunity School in the heart of Denver in the decades after it opened in 1916. Now, work is underway to transform the long-empty collection of buildings into a hotel the owner and developer says will maintain recognizable links to its educational past.
Denver Public Schools sold the campus, which takes up the city block that spans the 1200 blocks of Glenarm Place and Welton Street, to Denver-based Stonebridge Companies for $25 million in 2017. The opportunity school’s legacy lives on through Emily Griffith Technical College, headquartered at 1860 Lincoln St.
Stonebridge secured a multi-million tax reimbursement deal with the Denver Urban Renewal Authority in the fall as it prepared to embark on a $97 million redevelopment effort on the campus. Last week, the company finally broke ground. Officials say the project will preserve the recognizable brick exteriors of former school buildings but replace the classrooms, offices and facilities with more than 250 hotel rooms and 48,000 square feet of retail space.
“Words alone cannot convey the honor we feel at Stonebridge Companies for this opportunity to lead an impactful project that not only holds such strong ties to Denver’s rich legacy but also plays a role in the future success of our city’s vibrant culture,” Stonebridge founder and CEO Navin Dimond said in a prepared statement last week.
Stonebridge’s plans call for demolishing one building on the Glenarm side of the 2.4-acre campus, but otherwise preserving building exteriors, said Chris Manley, Stonebridge’s chief operating officer. The hallways inside will be wide, reminiscent of a public school building, not a hotel. The fitness center will be modeled after a school gymnasium.
“For those that either taught at the school or were educated at the school, as they walk the halls they are going to see a lot of threads pulled through,” Manley said.
It’s not Stonebridge’s first foray into redeveloping historic properties. Its Renaissance Denver Downtown City Center hotel, 918 17th St., occupies the former Colorado National Bank building. Features there include meeting rooms housed inside vaults that once protected prospector gold.
The Emily Griffith campus is bisected by an alleyway. Stonebridge aims to “activate” that alley, following an emerging trend in Denver’s urban landscape typified by Lower Downtown’s Dairy Block. The hotel’s main entrance and access to its parking structure will be in the alley. Some of the retail space will be oriented toward that alley as well, Manley said.
Across the street from the Colorado Convention Center, the hotel will offer 3,000 square feet of meeting space. Stonebridge expects it to attract both business travelers and tourists when the hotel opens in late 2020 or early 2021.
“What appealed to us about this site is obviously its location, its size and really the opportunity do something very unique from the hotel side and the adaptive reuse and retail side,” Manley said.
The metro area’s fast-growing and evolving hospitality scene has added some notable new offerings in recent years, with no signs of slowing down. New arrivals on the market range from the Ramble and the Source Hotel, the first accommodations in Denver’s River North Art District, to the Gaylord Rockies Resort and Convention Center in Aurora. At 1,501 rooms, it is the largest hotel in the state.
As work gets underway at the Emily Griffith School, the Hilton Garden Inn Denver Union Station is ready to welcome its first guests. The 233-room hotel at 1999 Chestnut Place, near Coors Field, opens Tuesday.
On the south side of the ballpark, foundation work in underway on McGregor Square, a mixed-use project being developed by the owners of the Colorado Rockies that will include a 176-room hotel to be managed by Denver’s Sage Hospitality.
To eliminate surprises around annual calendar shifts, hoteliers need to implement strategies well ahead of time, especially around group business.
Hoteliers know holidays and certain events happen every year, but when the timing of those events shift, they can be trickier to strategize around.
Calendar shifts, such as the Easter and the Jewish holidays, impact group travel the most, said Jan Freitag, SVP of lodging insights at STR, parent company of Hotel News Now.
“Group travel is curtailed, and it gets pushed into other weeks,” which not only has an impact on monthly data but also quarterly data, he said.
In the instance of Easter, Freitag noted hoteliers should compare Easter week to Easter week and not pay as much attention to the actual calendar dates and days because “it’s not a fair comparison.”
“Start now … tell your owners ‘hey this data is shifting; it has nothing to do with the underlying strength or weakness of the market comp set. This is purely because of what happens with groups around the Easter or the Jewish holiday shift,’” he said.
The other important thing to remember is that one week does not make a trend, he said.
Jim Smith, regional director of revenue management at Driftwood Hospitality Management, said he’s expecting hotels in his portfolio’s destination markets to see significant year-over-year increases during the week of Easter. This year, Easter falls on 21 April, which also marks the end of the spring break season in the U.S.
“We are expecting our destination markets to capitalize on both spring break and long-weekenders,” he said in an email interview. “In business travel markets, we expect the extended weekend to act in the opposite fashion with Monday becoming a shoulder night and Tuesday ramping the week back up.”
Chris Manley, COO at Stonebridge Companies, said via email that group travel demand on Easter weekend will really have to come through SMERF (social, military, educational, religious and fraternal) groups, though it will be a challenge. He said absent group demand, strategic utilization of all channels and intelligent labor management will be required to preserve operating margins.
How hoteliers strategize around groups
Calendar shifts can be a challenge for many markets, Manley said, and holidays like Easter typically fall during a busy time period for most.
“As a result, our sales team is really focused on building and moving groups around to shoulder dates before and after the holiday to mitigate the impact,” he said.
Luckily Easter falls on a weekend, which is typically already soft, “thus preserving the higher-rated business travel demand mid-week,” he added.
Manley said this is also an area where a brand’s revenue-management algorithms can help.
At Stonebridge, systems alert revenue managers if pick-up is extraordinarily strong and will recommend adjusting rates up or yielding some inventory, he said.
Smith said Driftwood reviews holiday calendar shifts and non-repeating events at least a year in advance.
“Each week, our hotels are reviewing … inventory roll-in and setting sell strategies in place to maximize on demand and opportunity,” he said. “Hotels that are group heavy or in convention markets are reviewing shifts sometimes five years in advance as we are layering in our group inventory controls and pricing strategies.”
He said Easter is a key date for Driftwood’s coastal Florida hotels since it marks the end of peak transient travel season. The shift of Easter this year adds an additional 19 days of transient compression in these markets, he said.
“For many hotels and markets around the U.S., it’s not too far from business as usual,” Smith said. “Many non-destination markets are business travel heavy and typically have challenges driving transient bookings on weekends.”
He said for Easter specifically, the Monday after would be treated as a “second Sunday, and the strategies would reflect that.”
That strategy is focused exclusively on group business, he said.
“Being able to look up dates for Easter years in advance with a simple Google search, your first step is to set attractive group strategies so your sales team does not let any opportunity slip through the cracks,” he said.
As the transient booking windows approach, Driftwood targets those advance booking customers “with generous discounts for prepaid reservations,” he said.
As you progress into the transient booking window, the flood gates should begin to open, Smith said.
“Your revenue manager will need to ensure that all booking channels are open. The brands are a great way to leverage slower periods. They can help you distribute target ads through e-commerce platforms and promotional emails to brand loyal customers,” he said.
Lovell Casiero, SVP of sales and marketing at PM Hotel Group, said her team always has a strategy applied at least 13 months out. One focus is on identifying periods which may be soft for transient business because of the holiday or the lack of repeat in-market events, she said.
“Early on, from a long-term perspective, we try to attract any group bookings that we can and support yourself with group bookings,” she said.
As the holiday or event nears, she said PM Hotel Group will make sure its hotels are competitively priced on the brand’s websites. From a revenue-management perspective, she said she “would typically not want to be the highest selling hotel in the market on a soft period, nor would I want to be the lowest.”
She suggests positioning inventory somewhere between the middle and the top.
Another strategy her company uses is marketing packages on the online travel agencies or even with the brands to offer advanced purchases. It’s about getting creative with what they have, knowing the traveler demographic will potentially change during that period.
The last strategy she will fall back on if nothing else is successful is listing inventory on discounted channels like Hotel Tonight or Priceline during the seven- to 10-day booking window.
“Every hotel is different, and every market is different,” she said. “You just have to keep that in mind. … (Your) strategy should be uniquely developed for the type of hotel, for the type of market and for the competitive set that you compete with.”
One unique circumstance this year, she noted, is the wave of bad weather that PM Hotel Group’s properties in the northeast region of the U.S. are recovering from.
“Just as we’re about to start recovering from some of the weather issues, we are now facing a holiday,” she said. “For Easter … it comes on a weekend, so we certainly change our strategies on the weekends to be more competitive.”
Company operates 30 hotels in the state and 60 nationwide after recently taking on three DTC-area properties
An established force in the Colorado hotel industry recently increased its footprint in the Denver metro area it calls home. And while it acknowledges challenges recruiting and retaining workers in the hospitality industry, the company says it welcomes the competition brought on by a certain 1,501-room behemoth in Aurora and is bullish on growing more at a mile high and beyond in the coming years.
Stonebridge Cos. formally announced last month that it had assumed management of a trio or south metro Hyatt hotels: the 135-room Hyatt House Denver Tech Center, the 126-room Hyatt Place Denver Tech Center and the 127-room Hyatt Place Denver-South/Park Meadows.
All told, Stonebridge now manages 30 hotels in Colorado, owning 23 of them. They are part of a 60-property national portfolio with more than 10,000 guests rooms combined.
“We continue to reinvest in Colorado. We are excited about all of Colorado, in particular the Denver (metropolitan statistical area),” Stonebridge chief operating officer Chris Manley said last week during an interview at the Renaissance Denver Downtown City Center, a 230-room hotel inside the former Colorado National Bank building that stands as one of the company’s crown jewels.
“As we travel the country and look at different demand drivers and different economies, I would stack Denver’s economy up with just about anywhere in the country in terms of job growth prospects, tourists that want to be here. The Convention center expansion is spectacular for our business,” said Manley, a Denver native. “There are a lot of positive things going on in Denver and as a result, when we look to our portfolio, Denver comes to the top of the list irrespective of the fact we’re based here.”
Manley’s assertion comes after Provision Living Senior Living Communities released the results of a survey in January that found Denver was the 11th most popular “bucket list” travel destination in America behind established tourist meccas like Honolulu, New York City, Las Vegas and New Orleans. The executive sees a golden age for tourism blossoming, with retiring Baby Boomers roaming, Gen Xers and millennials “willing to spend a disproportionate amount of earnings on travel and experiences,” and growing middle classes in China and India all contributing to a pool of would-be guests.
In addition to its existing portfolio, Stonebridge has some high-profile projects in the works including a dual-brand Hilton project expected to open at 15th and Stout streets downtown in the latter part of this year. Stonebridge is also redeveloping the historic Emily Griffith school campus on Glenarm Place downtown, but Manley said it’s too early to comment on design progress there.
The hospitality industry has plenty of challenges. In a fast developing metro area, new boutique and experience-driven hotels seem to be popping up on every corner. The biggest competitor out there for Stonebridge, literally speaking, is the long-anticipated Gaylord Rockies Resort and Convention Center. The $800-million, 1,501-room complex opened in December with 1.1 million rooms already booked in advance. It competes not only for guests but for workers, requiring 1,500 employees to operate.
Manley, when asked about the Gaylord, called it a great brand and said Stonebridge welcomes the competition.
“It forces us to execute on our commitment to distinguished hospitality for our guests better so that when they come back to Denver, they stay with us again and again and again,” he said. “It also reinforces our commitment to take good care of our team members … so they continue to grow their careers with us.”
Like many industries in Colorado, hospitality has a deep need for workers. Manley says Stonebridge has made recruiting and retaining quality staff a priority, something it focuses on through work with schools such as Metro State University of Denver. That school has a fellowship program through Stonebridge where students can earn credits and pay working in all departments of a company hotel over the course of a semester. The fellowship is named for company founders Rita and Navin Dimond.
It’s hard to say where Stonebridge ranks among private companies in Colorado in terms of its reach in the hotel industry. High-profile competitor Sage Hospitality, operator or properties such as the Crawford Hotel at Union Station, manages 57 properties across the country including 23 in the state.
Amie Mayhew, president and CEO of the Colorado Hotel and Lodging Association, said that regardless of size and scale, Stonebridge is an asset to her organization and the larger industry in Colorado. Stonebridge executive Jack Paul is part of the CHLA board.
“They are a well-run, employee-, guest- and industry-focused organization,” she said.
By: Joe Rubino
The brand new Courtyard Loveland is opening in early 2019! Courtyard Loveland/ Fort Collins is Loveland, Colorado’s first Courtyard by Marriott®. Located across from the Promenade Shops at Centerra, this hotel is right at the crossroads of I-25 and Hwy 34. This Loveland hotel offers a wide range of amenities, including The Bistro®, which offers refreshing breakfast choices in the morning, and a variety of dinner, beer and wine options in the evening. The Bistro also offers specialty beverages made with Starbucks® coffee, available all day.Accommodations include 102 spacious king and double queen guestrooms and suites that combine comfort and functionality. Connect to free internet throughout the hotel and flexible spaces where you can work or relax. At the center of it all is The Bistro, your destination for a great breakfast, or drinks and dinner during the evening. Meeting space is plentiful, with two meetings rooms, totaling over 800 square feet of flexible space for your needs.
Courtyard by Marriott Loveland/Fort Collins is scheduled to open its doors in Loveland, Colorado this Friday, February 15, 2019. Featuring an innovative lobby space as well as Courtyard’s latest contemporary room design, the new hotel provides flexibility and choices that allow guests to optimize and elevate their travel experience.
Located at 6106 Sky Pond Drive in Loveland, the 102-room hotel will operate as a Marriott franchise, owned and managed by Stonebridge Companies of Denver. The project marks Stonebridge’s fourth property located in Loveland. Stonebridge Companies, a privately owned, innovative hotel owner, operator and developer, has partnered with Colorado-based real estate investor and developer McWHINNEY to deliver the hotel. Whether traveling for business or pleasure, the Courtyard Loveland/Fort Collins offers guests convenient access to Chapungu Sculpture Park – the only permanent exhibit of its kind in the nation with 82 hand-carved stone sculptures – as well as the Budweiser Event Center on The Ranch campus, and The Promenade Shops at Centerra.
Courtyard continually researches trends and evolves to meet the changing needs of its guests. The latest room design offers hybrid zones for working, sleeping, relaxing and getting ready. Indirect lighting and a neutral, tone-on-tone color palette makes for a soothing and calm environment.
“From day one, Courtyard has prided itself as a brand that listens to business travelers,” said Janis Milham, senior vice president and global brand leader, Classic Select Brands. “Today’s technology has changed how people travel. Our guests want a room that has purpose and flexibility that enables a seamless transition between relaxing and working. Courtyard is designed to offer them a relaxing and functional space to work the way they want to, when they want to.”
The new room design is intuitive and thoughtful, offering flexible yet comfortable spaces that support technology. Upon arrival, guests can store bags on the “luggage drop” and plug personal devices into the “tech drop” ledge for seamless technology integration.
Signature furniture and architectural elements replace traditional art in the new guestroom. The “LoungeAround™” sofa offers a pop of color and a comfortable area for relaxing or working. The new design also features a lightweight desk on wheels, allowing guests to work from anywhere in the room.
An upgraded, more spacious layout creates an enhanced bathroom experience, with a “shower nook” making amenities readily accessible with convenient shampoo and towel storage.
The Courtyard Loveland/Fort Collins features the brand’s latest lobby design where guests can enjoy an open and modern environment outside of their rooms. The newly designed Bistro is the epicenter of the lobby, which fosters social connections and collaboration with more flexible and informal seating options. Guest will find a wide variety of made-to-order breakfast and dinner items, including Starbucks coffee as well as a selection of premium wines and classic American with a twist, cocktails.
Throughout the hotel, guests can connect with ample electrical outlets. The business library features several computer terminals and a printer in addition to separate stations dedicated solely to printing airline boarding passes and checking the status of flights.
“It is with a huge sense of pride that we bring Courtyard’s extensive offerings to Loveland,” said Navin C. Dimond, founder, president and CEO of Stonebridge Companies. “We’re honored to be expanding our unique brand of Distinguished Hospitality™ within the Northern Colorado market. We look forward to bringing the hotel’s quality amenities and features, as well as the values and premier offerings of the Courtyard brand, to our guests.”
Green has been Courtyard’s signature color since Marriott launched the brand 30 years ago. The brand has amplified its environmental efforts with the introduction of a guest-recycling program, with receptacles for paper, glass, plastic and metal conveniently located by side exits.
The four-story hotel features an indoor swimming pool, a fitness center, guest laundry and two meeting rooms with catering options available. The first meeting room spans 750 square feet and can accommodate functions for up to 70 occupants. The second is 228 square feet with occupancy for up to 12 people.
Stonebridge Companies will manage three metro Denver Hyatt properties, adding to the company’s current list of 60 hotels with more than 10,000 guestrooms nationwide.
Stonebridge Companies now manages the 135 room Hyatt House Denver Tech Center; the 126 room Hyatt Place Denver Tech Center; and the 127 room Hyatt Place Denver South/Park Meadows.
With the addition of the managed Hyatt properties, Stonebridge Companies now owns and/or operates 30 hotels across Colorado. Further supporting the firm’s growth in Denver, the company also marked the opening of The Jacquard Hotel & Rooftop, an Autograph Collection hotel in Denver’s Cherry Creek neighborhood. The firm is also developing a dual-brand Hilton property in downtown Denver, featuring a Tru by Hilton and a Home2 Suites by Hilton. It is planned to open later this year.
Denver-based Stonebridge Companies has acquired the 280-room Embassy Suites by Hilton New Orleans Convention Center hotel on Julia Street, the company said Wednesday.
Stonebridge bought the property in partnership with an affiliate of Walton Street Capital LLC. It is the first property Stonebridge owns in New Orleans.
The price was not disclosed, and it’s not clear when the sale occurred. The hotel is located near the Ernest N. Morial Convention Center.
Stonebridge, a privately-owned hotel operator, owns 60 hotels throughout the U.S., including two other Embassy Suites properties. Walton Street Capital is a private equity real estate investment firm based in Chicago.
Different channels and booking platforms, such as TripAdvisor, Google and Expedia, are becoming more powerful in the shifting hotel distribution landscape.
But Chris Manley, COO of Denver-based Stonebridge Companies, said the biggest challenge with distribution isn’t “necessarily the new entrants;” it’s consumer behavior.
As more consumers become comfortable with a mobile-first strategy, either via booking apps or websites, “it’s given momentum to new players to enter the market,” he said, adding that a number of large players also are aggregating and consolidating.
“It may appear there are multiple different avenues or more avenues than there were two years ago, but at the heart of it, the largest players are just getting bigger and bigger,” he said.
New disruptors in the market have a unique advantage because they don’t have physical inventory like hotel companies do, he said, so their ability to “adapt and transform the user experience for a higher conversion is pretty darn impressive.”
How hoteliers are adapting
Manley said this change has forced him and his team at Stonebridge to become better hoteliers.
But one of the key things to remember is that many of the new, bigger players are here to stay, said Drew Salapka, SVP of revenue generation at Atlanta-based Hotel Equities.
Instead of labeling anything outside of a direct channel as the enemy, hoteliers should look to foster and maximize relationships, he said.
Salapka said in some ways distribution is getting more complex, and in other ways it’s being simplified because of channel consolidation.
“It’s actually made it a little bit easier for our properties to balance, (but) you’re always going to have this constant ongoing negotiation between the brands and the (online travel agencies),” he said. “Each side is getting a little bit bolder in their acts and trying to figure out a way to work well together.”
Manley said the “best distribution strategy is a diverse one.”
“You want to be available on more shelves for more customers when they’re shopping,” he said.
But that comes with challenges.
Jay Hubbs, SVP of e-commerce at Dallas-based Remington Hotels, said it’s hard to quantify if channels such as Google are helping the industry or hurting it.
He said he’s noticed organic traffic has gone down, but conversions have gone up with his hotels “because what we’re getting is arguably more qualified traffic, and we’re not getting people coming to the (brand) website (just) to look for the phone number or to look for the address.”
He said Google is doing a good job of putting basic hotel information (phone number and address) upfront, which makes it easier for guests looking to book. But a downside, he said, is that Google controls all of that content, including which photos of the hotels are shown.
“We can put images up, and they can pull it, but they might source an image for a hotel that’s 8 years old,” he said. “So then we have to fight with Google.”
Hubbs said he’s also had issues with Google incorrectly listing amenity information. One of his hotels is valet parking only, but Google was displaying a “free parking” icon. “In the span of a weekend, I had a rash of unhappy guests,” he said.
Though the platform can be frustrating, Hubbs said he recognizes Google is an “integral part of the landscape and it’s here to stay.”
He said the issues require his team at Remington to have their eyes on Google listings more regularly, just like how they look at listings from OTAs.
“It’s arguably becoming almost as important as my own brand website,” he said.
Leverage opportunities for mobile-first consumers
Mobile has become an integral part of how consumers shop, book and buy, Salapka said, “and that’s something that we have to stay on stop of.”
Hoteliers need to leverage social media to survive, Manley said. “If we’re not actively promoting ourselves, and more importantly encouraging our guests to promote our experience, we’re going to lose,” he said.
The digital experience needs to match the time and effort hoteliers put into creating an experience on-property to capture a guest’s loyalty, he said.
Cory Chambers, VP and chief revenue officer at Hospitality Ventures Management Group, said his company is keeping an intense focus on “social listening.”
“What are our customers saying about us in the social space … our reviews, ratings and rankings? What are the mentions on all of the social outlets?” he said, adding that it’s important to keep giving guests reasons to say positive things.
“One of the things that we know in our business is a positive and meaningful guest experience drives results,” he said.
Julie Walsh, area director of revenue at Benchmark Hospitality, agreed that a large part of adapting is enhancing the marketing strategy. She said one of the ways Benchmark does that is through private offers for their members, including perks such as 25% off valet parking during the winter.
“We’re trying to make sure we capture as much (of) the share as we can from the other channels,” she said.
Manley cautioned against the strategy of using dialogue such as “cheap deals” and “last-minute deals” when advertising online. He said if your team is reliant on that strategy, “something has broken down in your distribution strategy.”
The only time that sort of marketing tactic should be used is if either the distribution strategy is broken or if the market conditions have changed, he said.
“The challenge with cheap deals or last-minute deals is two-fold: You now are becoming a commodity, and the risk of our business at the end of the day. If we become a commodity, we’re dead,” he said.
Manley said the other downside to that strategy is the consumers it attracts are not loyal. That consumer is not going to come back every time, and is not going to pay a reasonable average daily rate “because they’re looking for value, and that’s the only thing they’re making a decision on,” he said. “We can’t build a profitable business long term based solely on that demand driver.”
Chambers added that the last thing a hotelier should want to do is “condition a customer to think that the best deals are to be had last-minute.”
“Ideally, the longer the booking window that we can encourage, the better our ability is to maximize revenues and profits for our owners,” he said.
Property-level staff can also be champions in educating guests to book direct and join a brand’s loyalty program, sources said.
“At the end of the day, we have the ultimate advantage because we control the guest experience. At some point in this travel journey, we’re going to be able to have personal contact with (guests),” Manley said.
Loyalty, loyalty, loyalty
Hubbs said the brands are constantly reinventing their messages and are spending “millions of dollars” with branding and marketing firms, but a special focus should be placed on educating the customer on what Manley said the best channel is to book and why.
“Loyalty is everything,” Manley said. “Loyalty is why we enter into our franchise agreements with the big brand families like (Marriott International) and Hilton. We are buying loyal customers.”
He said if an OTA delivers a guest to one of his hotels, and he pays the commission but fails to wow the guest with an experience to convert them to a loyalty member, that’s a missed opportunity.
“That is incumbent on us to take each guest that comes in through an indirect channel and teach them the benefits of being a member because as soon as they are loyal to whatever brand.com it is, now we’ve got something we can build a business off of,” he said.
Costs and commissions
Andrew Rubinacci, SVP of revenue and distribution at Omni Hotels & Resorts, said he’s seeing a change in the size and scale of the mix of business transacted by third parties. For years, he said, it was very stable “at 10% to 20% revenue mix with 10% standard commission for most hotels in the U.S.”
But now the revenue mix of “intermediated business is ever expanding and impacting more segments,” he said, adding he’s seen the mix in some hotels exceed 90%.
“At the same time, commission rates moved from a standard 10% in the U.S. to anywhere between 10% to 25%,” he said.
Because of those changes, Rubinacci said it’s drastically affected the way hotels need to manage revenue and approach channel mix.
“With cost of consumer acquisition growing at (twice the amount of) revenue for the industry, distribution channel costs have gone from a stable afterthought to a primary driver of the revenue strategy for a hotel,” he said.
Manley said his cost per transaction has “gone down significantly” thanks to the brands.
However, he said, overall costs may be up for two reasons: If “you’re still relying more on these indirect channels” or if more money is being spent “in the e-commerce arena to effectively deliver our message in what’s a very crowded area.”
“We’re having to spend more money on paid placement and other avenues in order to make sure that our product is seen,” he added. “So those costs go up, but we can intelligently spend those dollars during times of need to produce roomnights.”
Walsh said her properties at Benchmark are seeing an increase in direct bookings, which is translating to cost savings. She’s also noticing this trend at the corporate level.
“While there are some (of our) hotels that do rely so heavily on the (global distribution systems) for corporate bookings, it is nice to see the direct bookings come in.”
Chambers said he’s noticed that channel costs with the brands, in some cases, “are increasing faster than revenue,” but where the brands have done a commendable job is “managing the third-party distribution costs,” making those fees “more attainable.”
Salapka said the brands in his portfolio are very adamant about driving costs down for the franchisees. In reality, costs can still creep, he said. His advice to owners is to “stick to your guns,” while “following your brand guidelines.”
Looking ahead, Manley said hoteliers need to prepare for future disruptors by controlling the guest experience and winning that guest. He said it would not surprise him if Google, Amazon and Apple fully enter the market as a distribution platform.
“We need to be prepared. … They’ve all got very loyal followings,” he said. “But at the end of the day, we control the guest experience; we control the product; and as long as we focus on doing that and delivering distinguished hospitality to our guests each and every day, we will ultimately prevail.”