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Hotel consortia – members only

12 February 2010 by
Hotel consortia – members only

Many operators see the benefits of belonging to one of the hotel consortia. But if you want to join up, you're likely to find there are some pretty exacting standards to be met. Janet Harmer reports.

The recently opened Arch hotel in London is joining Pride of Britain and Small Luxury Hotels of the World to help raise the hotel's profile at home and internationally

The Cotswold Lodge in Oxford joined Classic British Hotels five years ago in order to develop the corporate side of the business and take advantage of GDS reservations

Reaching out and engaging with potential guests is tough for independent hoteliers even in boom times. Trying to do so in the midst of an economic downturn is even more of a challenge.

As a result, there has probably never been a better time to be a member of one of the hotel marketing consortia, which are all seeing an increase in demand from properties wanting to enjoy the business benefits of joining up.

Becoming a member of a consortium enables owners of a single hotel or a small group of properties to tap into a network of support and advice that should increase the throughput of guests and help ensure the sustainability of the hotel.

As well as increasing a hotel's profile in the UK and overseas, joining a consortium will enable a property to access a whole host of different services - including marketing, PR and sales; financial; purchasing; and quality assurance.

There is also the opportunity to link into Global Distribution System (GDS) reservations and meetings, incentives, conference and exhibitions (MICE) sales; as well as enjoying representation at trade fairs; partnership initiatives; and the camaraderie of meeting up with like-minded hoteliers.

It is the exposure to new and wider markets, though, which tends to be the incentive that most independent hoteliers have for seeking help from a consortium.

Walter Fallon, general manager at the four-AA-star, 49-bedroom, Cotswold Lodge hotel in Oxford, was encouraged to join Classic British Hotels for this reason nearly five years ago.

"As a privately owned hotel, we needed to get on the radar of major corporations, as well as jump on the bandwagon regarding GDS reservations and internet bookings," he says. "The result is that we have won a great deal of business from Government departments and big companies, which we would never have had access to otherwise."

BOOKINGS

Today about 15% of all bookings at the Cotswold Lodge hotel comes directly via Classic British Hotels, with business split 70:30 in favour of corporate bookings.

Fallon says Classic British Hotels has been particularly helpful during the tough economic climate in encouraging its members to maintain their rates by discouraging discounting and promoting value for money. "As a result we have kept rates the same and increased value by offering free breakfasts and internet access," he says.

Maintaining room rates amongst its 82 members has been one of the main benefits of belonging to a body such as Classic British Hotels during the recession, according to chief executive Len Louis.

"The Tri Hospitality Consulting HotStats for Provincial Hotels for January to November 2009 showed an average decline of 11.4% in revpar, compared with the same period the previous year," Louis says. "Over the same period, our hotels were showing an average decline of 2.8%, which is better than the industry average."

Other consortia have also helped their members add value to their hotels during the recession by offering enticing promotions. Small Luxury Hotels of the World (SLH), for instance, boosted value for guests - as well as bringing in more business - through a partnership One More Night programme with American Express. Running up until November 2009, this offered three nights for two, four nights for three and seven nights for five at the 100 SLH properties that opted into the promotion.

"There has never been a more important time to invest in sales and marketing," says Carly Gotz, group director of sales and marketing at the Great Hotels Organisation, which divides its 200 hotels worldwide between three brands - Great Hotels of the World, Special Hotels of the World and Metro Hotels.

"Times of economic uncertainly can be very hard for hotels, especially independent ones. Becoming a member of one of our brands is a cost-effective way of increasing a hotel's presence in the market they are trying to target. Because of our branding, consumers immediately identify the hotel as being of good quality."

Brands are important to hotel guests who feel reassured by a familiar name. In this respect, independent hotels can lose out to the major well-known brands such as Marriott, Hilton and Holiday Inn. But an independent joining one of the hotel consortia - whether it be the likes of Best Western, which represents mid-market properties, or Relais & Châteaux, which has some of the world's most luxurious and exclusive properties within its portfolio - can assume many of the benefits of being part of brand, while remaining as an individual, unique business.

"During a recession, consumers tend to steer towards the brands they know and recognise for their longevity," says David Clarke, chief executive of Best Western GB. "Brands are seen as a symbol of trust, known standards and reassurance to the customer, giving them confidence in their purchasing decisions."

So it is no surprise that the consortia all report a growth in applications from potential members. Many of the organisations, though, take on a relatively low number of new members each year: in most cases the entry criteria are strict, with a minimum number of standards to be met.

In 2009 Best Western GB received 169 applications, resulting in 12 hotels becoming new members. "The applications was higher than most years and a key reason for this is that many of these hoteliers were looking for the reassurance of a brand to help them drive more business to their hotel during a very harsh economic period," Clarke says.

Last year saw 60 properties out of the 1,200 that applied worldwide being accepted by Small Luxury Hotels of the World. Pride of Britain usually accepts two to four new members out of 10 to 20 applications annually, and the Independents Hotel Association takes on an average of seven hotels out of 10 applications each year.

To ensure standards are maintained, most consortia carry out an anonymous visit before accepting a hotel as a member, with inspections of member hotels taking place every one or two years. The Independents Hotels Association and Great Hotels Association, however, do not inspect their properties. "We feel money is better spent on developing ways to promote hotels," Gotz says.

Some consortia rely on members having recognition from one of the main accreditation schemes. The Circle, for instance, which represents 265 hotels and inns with two or three stars, likes its members to hold accreditation from VisitBritain or the AA. Currently, 90% of its members are accredited in this way.

The Preferred Hotel Group works with a third-party mystery guest company to carry out annual, unannounced inspections of its 700 hotels worldwide, including 23 in the UK.

"The mystery guest conducts an interview with the general manager at the end of the stay to provide feedback, giving the general manager a chance to make any immediate changes," says Chris Fradin, regional director, UK & Ireland, of the Preferred Hotel Group. "A report in excess of 150 pages is produced, which the general manager can use with the heads of department."

In an undertaking to ensure that its already meticulous standards were enhanced even further, Leading Hotels of the World overhauled its quality template last year, with the support of Leading Quality Assurance, a body which conducts incognito inspections for a number of hospitality organisations worldwide. A key aspect of the new standards is the expectation of an authentic connection between staff and guests, in place of a mechanical interaction.

"By enhancing product standards, and adding staff behavioural factors, we have substantially raised the bar," says Ted Teng, president and chief executive office of Leading Hotels of the World. "In order to attain higher scores, hotels will definitely have to pay even greater attention to precision, and focus closely on personnel training and empowerment."

Most consortia do not hesitate in dismissing hotels that do not meet the expected standards. About 30 properties every year out of its 475 members worldwide, for instance, are asked to leave Relais & Châteaux if not performing as expected.

"We issue a warning first and allow the property time to make improvements, but if this does not happen then the hotel will go," says Jaume Tàpies, international president of Relais & Châteaux.

For Tàpies, belonging to Relais & Châteaux is all about an exclusive membership, at the heart of which are four core values: a family spirit, a sense of place, a perception of luxury and a harmony between character, charm, courtesy, cuisine and calm.

"These values are clear and unique to Relais & Châteaux hotels and it is for this reason that we decided to stop our properties holding membership of other organisations," says Tàpies. "It became too confusing for clients to be faced with a collection of logos on one hotel."

Classic British Hotels and Best Western also prohibit members from joining other organisations.

"Dual branding is not permitted as this can cause a conflict of interests in respect of customer perception, and standards and criteria vary significantly between brands," says Best Western's Clarke.

However, Peter Hancock, chief executive of Pride of Britain, which represents 36 hotels in the UK, is trying to persuade Relais & Châteaux to relax their rules to allow dual membership.

"Several members of Pride of Britain are also part of SLH," he says. "This works very well because there is so little overlap in the activities of the two organisations."

BUSINESS BENEFITS

Hancock's argument is that there is a business benefit for a hotel to belong to more than one consortium.

Certainly, the benefits of belonging to a least one organisation are patent. In 2008 Best Western hotels in the UK achieved average sales in excess of £5,000 per room per member; Pride of Britain recorded a total of £3m in room sales in 2009, equating to about £85,000 per member and an average of 350 room sales per hotel; and Relais & Châteaux generates nearly £350,000 of business for each member, which, on average, accounts for 40% of every hotel's turnover.

Business, though, is not going to suddenly flood in by simply signing up to a consortium. It is important to play an active role in an association to achieve the maximum benefits, according to Abraham Bejerano, owner of AB Hotels, which has just opened the 82-bedroom Arch hotel in London.

Pride of Britain and SLH have been selected to help raise the profile of the Arch as Bejerano believes that the first is the best association for capturing the home market, while the second will give the hotel representation within an international organisation of 500 hotels.

"It is important not to just expect the consortia to do all the work," Bejerano says. "By working closely with the reservations department and the other hoteliers within the associations on a daily basis, you'll find confidence in your business will grow - and will eventually bring in new customers. Being a member of a consortium is not about sitting back and doing nothing."

THE DILEMMAS OF JOINING A CONSORTIUM

For any hotel joining a consortium, there are many considerations to take into account. Martin Wicks, owner of Ashdale Hotels, a group of five distinctive hotels in North Yorkshire and Lincolnshire, has been considering the various options to help him maximise his occupancy levels.

One hotel within the group - the three-star, 31-bedroom Dower House is a member of Best Western - but he would like to consider the alternatives for the company's two other three-star hotels: the Kings Head in Richmond, North Yorkshire (30 bedrooms), and the Angel & Royal in Grantham, Lincolnshire (30 bedrooms), as well as the four-star properties, Grants hotel, Harrogate (42 bedrooms), and Hazlewood Castle, near York (25 bedrooms).

Wicks says that his main priority is ensuring a good return on the investment it will cost to join a consortium.

"I have to consider what it will actually cost me against how much revenue I can attribute to the membership, would I otherwise be able to obtain the sales without paying the consortium's commission charges, and will the brand enhance the status and profile of my hotels?" he asks.

Wicks is also concerned that the criteria for membership could restrict his operation of the hotels as a result of capital demands and is uncertain whether the required service standards are reflective of customers' expectations or petty, non-relevant bureaucracy.

Finally, he wonders whether the internet has provided independent hotels with the opportunity to provide their own creative, fast-moving marketing platform that is more individually focused that one operated by a consortium that has to consider everyone's interests.

HOTEL CONSORTIA

Best Western
Number of hotels in UK: 280
Number of hotels worldwide: 4,000
Number of rooms in UK: 15,200
Number of rooms worldwide: 308,000
Profile: Mid-market

The Circle
Number of hotels in UK: 265
Number of rooms in UK: 4,000
Profile: Inns and small hotels

The Independents Hotel Association
Number of hotels in UK: 150
Number of rooms in UK: 9,000
Profile: Individual 2- to 4-star properties

Classic British Hotels
Number of hotels in UK: 82
Number of rooms in UK: 5,009
Profile: Top 3- and 4-star properties

Small Luxury Hotels of the World Number of hotels in UK: 37
Number of hotels worldwide: 500
Number of rooms in UK: 2,000
Number of rooms worldwide: 25,000
Profile: Small, independent hotels

Pride of Britain
Number of hotels in UK: 36
Number of rooms in UK: 1,050
Profile: Luxury, mostly country house

Relais & Châteaux
Number of hotels in UK: 30
Number of hotels worldwide: 475
Number of rooms in UK: 810
Number of rooms worldwide: 11,190
Profile: Luxury and unique

Preferred Hotels Group
Number of hotels in UK: 23
Number of hotels worldwide: 700
Number of rooms in UK: 3,000
Number of rooms worldwide: 100,000
Profile: Five brands: Preferred Hotels & Resorts; Preferred Boutique; Summit Hotels & Resorts; Sterling Hotels, and Historic Hotels of America

Great Hotels Organisation
Number of hotels in UK: 13
Number of hotels worldwide: 200
Number of rooms in UK: 1,788
Number of rooms worldwide: 37,479
Profile: Three brands:Great Hotels of the World; Special Hotels of the World; and Metro Hotels

Leading Hotels of the World Number of hotels in UK: 12
Number of hotels worldwide: 450
Number of rooms in UK: 1,977
Number of rooms worldwide: 84,000
Profile: Luxury hotels, resorts and spas

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