Multiple choices

15 February 2001

There is a new hotel consortium about to squeeze on to the market in the next few weeks, offering another helping hand to independent hoteliers. Your Hotel, due to launch at the end of February, offers a variation on what the existing consortia offer: a means of marketing the non-chain hotel to far-flung audiences in the rest of the UK and, more lucratively, abroad.

But the new group faces tough competition. There are already at least 11 consortia which are members of the British Hospitality Association (BHA), and there are many more across Europe and the USA.

All these groups are fighting for the same thing - members. But levels of consortia membership have, at best, remained static in recent years, with hotels wavering between the different groups. At worst, membership is dropping. Best Western has haemorrhaged about 35 members per year over the past three years, while Leading Hotels of the World lost 38 members in 2000. Pride of Britain lost nearly one-quarter of its members in 1999 while managing to offset the loss of three hotels last year with the recruitment of four new ones. But the market is in constant flux.

The high cost of membership, which can be anything from £400 to £8,000 a year, is turning many away from joining or staying in a group. "Hotel owners are taking a much more hard-headed view than they did a few years ago," says Bob Cotton, chief executive of the BHA. "They want value for money."

Another challenge is the depletion of potential new members as the increasing presence of the big chains continues to erode the number of independent hotels.

But probably the greatest threat comes from the Internet. The ease and relatively low cost of placing a hotel on-line has given even the smallest independent hotel an opportunity to reach out to the most distant consumer. And hoteliers are taking that opportunity in their droves.

The consortia have responded by consolidating. Minotel is in the process of revamping itself, becoming a client-led rather than member-led organisation, and early last year Consort and Best Western merged into a leaner organisation. "Both organisations recognised that they were working against one another and that, by joining, there were savings to be made," says David Hayes, chief executive of Best Western.

Consortia themselves have also enthusiastically embraced the Internet, creating extensive Web pages featuring their members' properties, with hyperlinks to members' own Web sites. All the consortia argue that being on a central Web site makes it easier for hoteliers to attract the browsing consumer. "We've been in the vanguard of consortia going on-line," argues Peter Hancock, chief executive of Pride of Britain. "Now we have an easy site that is easy to find. Lots of people are finding our members through our Web site."

The result of all this activity is that, while there have been much-publicised defections, there are hoteliers who continue to love consortia. Size doesn't seem to matter. The 155-bedroom Metropolitan on Park Lane in London is a keen supporter of Design Hotels, while its sister organisation, the 37-bedroom Halkin in nearby Belgravia, is a member of both Design Hotels and Leading Hotels of the World.

"To be a member of a consortium is absolutely crucial," says Glenn Carroll, marketing director at the Metropolitan. "It not only gives us an international perspective, but also a synergy with the other hotel members. People automatically know what they are buying. Because of the consortium, they know it will be a funky, trendy hotel."

Travel trade bookings

Besides the association with other like-minded hotels, which is illustrated by in-room literature about the other members, being a member of a consortium also brings access to the extensive and lucrative global distribution system (GDS), which is the central booking system for travel agents and airlines. It is a direct link to overseas trade. "More than 70% of our business comes from the travel trade," says Michelle Ball, an executive at Small Luxury Hotels of the World.

However, no single hotel is allowed GDS entry. It is open only to chains, which means that even the most successful of independent hotels, including the major players in London, are reliant on consortia.

The Gleneagles hotel in Scotland is a committed member of Leading Hotels of the World, even though the consortium supplies only a small percentage of its overall business. "Being part of a consortium plugs us into a worldwide network that we wouldn't otherwise have," says Peter Lederer, managing director of the famous 222-bedroom property. "It may provide a small part of our business, but those guests that do come through Leading are very high spenders. Twenty-two per cent of our business comes from the USA and Leading is an important part of that. Those guests spend disproportionally more than other guests. They use all our facilities and usually book the best rooms and the suites."

But not all hoteliers are enamoured with consortia. Greville Dare, proprietor of the Petersham hotel in Richmond, Surrey, reckons that he doesn't need them. He has opted to go solo and spend his money on direct marketing and PR. His 60-bedroom hotel, despite its solitary stance, can still boast 86% occupancy. But he has looked at membership. "It is difficult for independent hoteliers to know which one to go with," says Dare. "There are so many to choose from."

Each offers something slightly different. The criterion for entry into Design is a contemporary, upmarket hotel with a modern design. Leading is a home to five-star hotels, while Small Luxury Hotels of the World offers a brand to upmarket hotels with fewer than 100 rooms. Best Western, the largest consortium in the UK, sits comfortably in the midmarket range. It demands a minimum AA rating of 68% for three- and four-star properties and 70% for two-star hotels.

Newcomer, Your Hotel, is also aiming at midmarket hotels, but without the heavy branding associated with Best Western, which requests that members adopt the Best Western name for their property as well as displaying all of its literature. Like Best Western, Your Hotel will also provide midmarket properties with central reservations, marketing material and access to GDS. In addition, it will offer a frequent-guest card programme and Internet connection. Its point of difference, says chief executive David Sankey, is that all the services are Internet-based.

When Your Hotel launches, it will have 10-15 members, with a target of 40 by the end of the year. But, as the market of mid-range hotels shrinks, it may only achieve its target at the expense of other consortia.

CONSORTIA IN THE UK

Best Western

Web site: www.bestwestern.com

Tel: 01904 695400

Membership: international, 4,000; UK and Ireland, 344

Cost: joining fee, £950; plus £190 per bedroom (minimum 30)

Independents Hotel Association

Web site: www.iha-uk.com

Tel: 01823 672100

Membership: UK, 238

Cost: from £720 a year

Grand Heritage Hotels