LONDON - HOTELS: Capital assets

Demand outstrips supply in the capital for meetings space and hotel rooms but, as Paul Twite discovers, the city's offer is so strong that groups are prepared to pay premium prices

There is not another city in the UK that could have added so many rooms, meeting spaces and exhibition halls to its offer in recent times and still have planners demanding more. The London Convention Bureau (LCB) is confident the latest target of adding 10,000 rooms to the capital's bed stock by 2005 will be reached - but still, buyers would argue, prices and availability can be limited.

The formula should be a simple one. The more venues and hotels added, the more reasonable pricing should become. But the city has its own calendar of annual international events that fill rooms, so space can still be hard to come by.

"The market is still driven by availability in terms of the number of rooms and venues with conference and banqueting space, says Maritz Travel group project director Jeremy Brown. "Over the past six to eight months, we struggled to find availability. Even with long lead times, hotels are tied up."

The hoteliers disagree, with many operators arguing the aftermath of last year's tragic events in New York left rooms and meeting spaces empty and reasonably priced.

"I believe hoteliers are being flexible with rates, says K West general manager Stephen Kyjak-Lane. "For example, I know I could go out and buy a four-star, twin room in London for as little as £40 and a five-star, twin for £60 or £80."

The 222-room, K West hotel opened in December last year in Shepherd's Bush, near to many of London's largest media organisations, including the BBC. Kyjak-Lane is aware his hotel could not have launched at a tougher time but the hotel has so far enjoyed considerable success at the expense of some of its central London counterparts. "We are 30-40 per cent cheaper than comparable central London hotels and we have created products such as 'Book to the Future', where the further in advance you book, the cheaper the rate, he says.

The hotel has also published these rates on its website in an attempt to encourage a more open relationship with planners and to bring in business in sectors that have been hit hardest by the downturn. "The finance, insurance and legal sectors are down and the only major sector that seems unaffected is the pharmaceutical industry, says Kyjak-Lane.

The drop in business from some of the key market sectors has made hoteliers face up to some tough choices over the past year.

"The meetings market business from the US dried up instantly following 11 September, but it is coming back online now, insists Landmark Hotel manager Douglas Glen. "We had a strategy of maintaining room rates at the expense of occupancy. Some hotels were dropping their room rates by £50 or £60, and that has to have an impact on your standards."

But the market is bouncing back and the Landmark has recently won business from US giants Pepsi and Nike. If little else, the events of 11 September refocused the minds of hoteliers and highlighted that properties had relied too heavily on the US market at the expense of markets closer to home.

"Some London hotels had ignored the European market. The US market was so strong it seemed as if it was never going to dry up, says Glen. "Hoteliers have now started working more closely with the agents and organisers to build a rapport."

This process of communication with the UK market cannot come too soon for planners, who are looking to get reliable and detailed information about the city.

Maritz is one of many agencies that has had difficulty getting information on new properties. Brown claims he received detailed information on the London Sofitel St James property from his sister company in the US before he received information from a UK source. "I think the British Tourist Authority does a lot to sell the destination overseas but that information doesn't filter down to the domestic market, he says.

This is one of the issues the LCB's head Mady Keup is trying to address by securing more funds for promoting London to the UK market. "So much of the funding is ring-fenced for international marketing, she says.

"But we have made a strong case for promoting London in the UK."

As part of this improvement in communication the LCB launched a website in September with sections dedicated to the UK and is revamping its directory for the meetings market. Keup is also trying to ensure the corporate market is kept up to speed on developments in the city. "We need to address the market for the corporates based here, as our role is to maximise business for London."

One issue with keeping track of the capital's hotels is the sheer scale of the development activity taking place. From the Docklands in the east to Accor's Novotel London West, the capital's hotel landscape is constantly evolving.

In the East End, Excel the venue is gearing up to host World Travel Market (WTM) in November and the event has prompted a flurry of hotels to open in time to showcase themselves to the world's travel industry. In May, the floating Sunborn Yacht Hotel, which is berthed next to the venue in Royal Victoria Dock, opened offering 104 rooms. In July, the 49-unit Circus Apartments opened in Canary Wharf and the Custom House Hotel, adjacent to Excel, plans to open a further 145 rooms in time for WTM.

There are also five further hotels due to open in the vicinity by the end of 2003 including Holiday Inn, Novotel, Ibis and Travel Inn properties.

In 2004, these will be joined by a 301-room Marriott Hotel and a 47-unit Marriott Executive Apartments property in nearby Canary Wharf.

The frenzy of development is not just reserved for east London, however.

In the City, the £17m, 70-room, Threadneedles development has added another five-star option to the capital's financial centre.

In the West End, Ian Shrager Hotels has launched two lifestyle properties in the last couple of years: the Sanderson and St Martins Lane. The latter has 204 rooms on seven storeys, and shows the trademark minimalist influences of Philippe Starck - as does the 150-room Sanderson.

Other recent additions to the hotel landscape include the Sofitel St James, which is part of Accor's burgeoning London empire that now features more than 2,500 rooms across the city. Also in the West End, Hilton launched its first lifestyle property, the 129-room The Trafalgar, in May of last year.

This diversity of products on offer is something that appeals to meeting planners using the city. "There's a huge selection in the five-star hotel market and there are more hotels coming up, says Brown. "In terms of rates, they are still quite high compared to other destinations across the UK, but people are prepared to travel to London for an experience or event."

Despite all these additions to the capital's hotel inventory, Maritz's Brown argues there is still room for more.

To alleviate some of this pressure the LCB is keen to attract more hotel chains to London as Keup feels the competition is beneficial to everyone. "When the international interest returns to previous levels there's a chance we could lose some of the business for a long time through high prices and a lack of availability, she says. "When the rebound will happen I'm not entirely sure but things are firming up for 2003, and 2004 looks very positive."

The one thing missing, and a recurring bugbear for the bureau, is the lack of an international convention centre. This is currently under consideration by the London Development Agency and the idea has widespread support from London bodies.

"If London were to have an international convention centre it would open up the UK to the international market, attract the international associations here for the first round of meetings and then they could explore other destinations in the UK, says Keup.

Despite the lack of a convention centre London still pulls in the crowds and the city's properties are constantly undergoing upgrades and refurbishments.

The Sherlock Holmes Hotel on Baker Street underwent extensive refurbishment following its acquisition by Park Plaza Hotels, and other properties are introducing value-added packages targeting the meetings market.

Hilton Conventions launched in September and offers planners a one-stop shop for larger meetings. The service is available at the London Hilton, the Hilton London Metropole, as well as the chain's Heathrow and Gatwick properties.

Curiously, chains such as Hilton have witnessed differing experiences of the slowdown at each of their properties. The Hilton London Metropole has seen an overall reduction in bookings from overseas, but European bookings are slowly starting to grow again, although bookings from the US are slower than expected. Conversely, the London Hilton Park Lane has seen a reduction in overall bookings and in enquiries from overseas, but the US market is starting to pick up.

Marriott is also tailoring its offering to the meetings market to spur business. It launched its Communications Solutions package last November, which offers high-speed internet connections to allow video conferencing and web casting and has experienced strong take-up for the service.

Despite the constant change in product and the packages available, demand for London remains constant. The Convention Travel Company (CTC) has run a number of events in London in recent years and the agency still finds the city to be a compelling destination. "It can certainly deliver on many levels, says CTC director of marketing John Dann. "It's a major world city and it can cope with big numbers. Alexandra Palace can accommodate a couple of armies should you need it to, and the Grosvenor let's you bring in big numbers as well. The problem can be in finding meeting and room space together in the same venue."

CTC has used established properties such as the Novotel London West, in Hammersmith, which recently underwent a £25m refurbishment and the Four Seasons property in Canary Wharf. "The Novotel in Hammersmith was being renovated at the time and it worked well. A lot of the meeting rooms have daylight and there is parking, which is normally an issue in London, says Dann.

"We also used the Four Seasons hotel in Canary Wharf, which is a good quality hotel. It's part of a top-ten global chain, and in a fresh part of the city."

For Maritz's Brown the attraction of London remains undeniable. "I still don't think that there's anywhere in the UK but London that will make delegates drive that additional 100 miles for an event, he concludes.

Company: Peugeot
Venue: St Martins Lane
Event: Peugeot Ride and Drive
Group Size: 170
Agency: Grass Roots Group
Date: 24-26 May 2002

The congested streets of West End London may not seem the ideal place to test drive the latest Peugeot range, but, combined with the wide open spaces of Epsom Racecourse, the capital provided the right mix of business and pleasure.

The incentive was for Peugeot's top fleet buyers, offering a ride-and-drive session in Epsom and then a transfer to central London for the incentive part of the trip.

The Grass Roots Group handled the three-day event and chose the Ian Shrager Hotels property St Martins Lane to host the delegates.

"We chose London because of the variety it offers as an incentive destination, explains Grass Roots Group, senior operations manager, Markus Gardner.

"People came from all over the UK and then left their cars in Epsom for the weekend."

Gardner had some initial concerns about using a new property but these were unfounded. "We were conscious beforehand it hadn't done work like this before, he says. "But it got its act together, threw staff at the event, and gave us attention where we needed it."

The first night saw the group hosted in smaller parties by nine local restaurants. Their proximity meant each group could be walked to their dinner. All but one of the restaurants delighted its guests. "Red Cube was poor in terms of delivering what we had asked, says Gardner. "For example, the group of 18 was in couples and they were squeezed together on two tables seating nine."

The next day the group was taken for breakfast and shopping at Harrods, followed by activities of their choice. These included personal shopping at Liberty, a trip to the Tate Modern and a ride on the London Eye. The day was rounded off with a VIP trip to the theatre and a meal in Just St James in Piccadilly.

On the final day, the group's cars had been transferred to a local car park for them to drive home. For Gardner, using London added something extra to the event.

"An incentive programme works better in London than in other UK cities," he insists.


The diversity of properties in London extends beyond the traditional four- and five-star chains. Boutique hotels can add charm, class and modernity, even quirkiness, and are perfect for hosting smaller meetings or incentives

The Halkin, sister property of the Metropolitan hotel, has been renowned for its contemporary design since opening in 1991. Located between Knightsbridge and Mayfair, the hotel's Thai restaurant, Nahm, was awarded a Michelin star in January. The style extends to the hotel's staff who are clad in Armani uniforms. The property offers 41 rooms and suites, two small sitting rooms for meetings and another space that provides room for six delegates.

Established 30 years ago, the Portobello Hotel is a boutique stalwart and its guest list reflects the funky Notting Hill locale. Robbie Williams, Kylie, Mick Jagger and Kate Moss have all stayed there. Each of the 24 rooms is different, with round beds, four-posters and even a ship's bunk on offer.

The Leonard added 12 more guest rooms and a roof garden at the end of last year bringing the number of rooms to 44, 21 of which are suites.

Located just off Hyde Park it is near to the shops of Oxford Street. There is a drawing room with open fireplace and each room is furnished with antiques and objets d'art. The four Grand Suites have been designed to take 15 people boardroom-style and can also be used for parties.

The Franklin Hotel celebrated its tenth anniversary last month and is a sister property to The Egerton House Hotel and the Dukes Hotel. All three are owned by David Naylor-Leyland. The Franklin has 47 air-conditioned rooms that are situated in four 19th century town houses overlooking a garden in Knightsbridge. Each room has been individually designed and is decorated with antique furniture and oil paintings. Meetings of up to 20 people can be held in the hotel's dining rooms.

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