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Design hotels outperform competitors on occupancy and rates

03 August 2010 by
Design hotels outperform competitors on occupancy and rates

Design hotels achieve higher room rates and occupancy figures than their traditional counterparts, according to new research.

After studying the relative performance of Europe design hotels, Lukas Hochedlinger, a Vienna-based associate with Christie & Co, said that 70% of the properties outperformed their non-design competitors with regard to occupancy and 81% were able to charge higher average room rates.

At the same time, 62% of design hotel boast similar or lower operating and maintenance costs, compared with their non-design counterparts.

"It appears that design hotels are able to achieve a better bottom-line performance than non-design hotels," said Hochedlinger.

However, some properties identified higher development risks in terms of costs and longer timing, as well as a higher chance that the design might quickly become dated.

Recent annual figures from Firmdale Hotels back up Hochedlinger's findings. In 2009, when other hotels were suffering falling occupancies and rooms rates, the group's six design hotels in London reported a healthy occupancy of 85.8% and an average room rate of £282.49.

Jonathan Langston, managing director of TRI Hospitality Consulting, said that it was vital that design hotels maintained and updated their product in order to preserve their positioning in the market.

"Their USP, is, after all, their design so if this become outdated or the general fabric of the fixtures, furnishings and equipment deteriorate more quickly than a more traditionally designed hotel it is inevitable that they will suffer," he said. "The initial design and fit-out may be more expensive, but a properly executed hotel should recoup this by being distinctive and thus capturing more than its fair share at a premium room rate."

Langston added that it was important that hotels underpinned the design with consistent standards of service and attention to detail, as well as having as broad a market appeal as possible, as reliance on a limited number of segments might mean a hotel would suffer more during a downturn.

"If you can manage leading and timeless design, with an appropriate refurbishment programme, excellent guest service, maintain appeal to a spread of market sectors and conduct effective sales and marketing activities, you can expect to stand out from the crowd."

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By Janet Harmer

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