HOTELS: Room for manoeuvre

Hotel chains are developing new properties and refurbishing their existing portfolio, so even as occupancy picks up, organisers stand to benefit from increased competition. Paul Twite reports

All too often, the grand plans to reinvigorate the tourism industry fail to come to fruition. Imaginative proposals get left on the drawing board, never to see the light of day. But, for once, the proposed allocation of funds for London's tourism industry seems to have bucked this trend.

A significant amount of money has been made available and will be spent on attracting both business and leisure tourism to the city - and its hotels.

The impact of the funds will be significant. "It will work out at several million pounds of marketing spend over two years," says head of the convention bureau at the London Tourist Board (LTB) Mady Keup. She adds there is evidence London's tourism market is bouncing back from its slump and there is an increase in hotel occupancy rates. But, while improving, occupancy has not yet returned to the levels recorded in 2000, and this is enabling meeting planners to get better prices for events with shorter lead times.

However, Business Travel Team joint managing director Rachael White is not entirely convinced. "If you've got a meeting in the next two weeks for 300 people, then you might get a good rate," she says.

But with occupancy rates rising, it is debatable for how much longer these last-minute bargains will be available. Starwood Hotels, for one, is seeing its occupancy levels rising. "Occupancy year on year is now coming back," agrees Starwood Hotels general manager for central London Colin Bennett. "But we've had to learn some lessons on rates to get there."

The rise in occupancy could also, in part, be attributed to the continued investment chains are putting into their London properties, either by adding to their portfolio or by refurbishing. Both Starwood and Marriott have been in the throes of refurbishment. Starwood's Sheraton Park Tower has just undergone a £10m refurbishment, while the Kensington Marriott is due to open in May 2003, and the five-star London Marriott Park Lane opened last November. Elsewhere, Le Meridien has announced a £20m renovation programme at Le Meridien Waldorf, with work on the Grade II-listed Edwardian hotel being phased in over 2003.

Hilton Hotels is also improving its standing in the capital. Its Paddington Station property opened in March last year, with 355 rooms and 15 meeting rooms. This year will see the Hilton London Green Park refurbish its bedrooms, and the Hilton London Docklands has refurbished all of its 136 guest rooms.

One of the larger initiatives Hilton has undertaken is the redevelopment of the London Hilton Metropole. For Jonathan Mills, director of London sales for Hilton UK, this gives London a crucial foothold in the association and conventions market. "We launched Hilton Conventions four months ago and the market has continued to show incredible growth," he says. "These are events that hadn't been coming to London in the past."

The Metropole's success is also due to a maturing of attitude since the property's launch, according to IBR sales and marketing director Fay Sharpe.

"It's relaxed a lot. At first, it was unyielding with its space and hard-nosed about what business it took. As time has gone on, it's become more flexible. This is only natural. If you have a residential meeting for 700 people, the client wants to see they're getting value for money."

Meanwhile, over by Excel, Whitbread Hotels has spent £10m on its 202-room London Docklands Travel Inn, due to open this spring. Keup points to a wealth of development activity around the Docklands-based convention and exhibition centre, which, she claims, will generate more hotel building.

"And it's not just at Excel," she says. "The Wembley stadium redevelopment will have positive repercussions for the whole of the surrounding area, the Dome should open in 2005 as an entertainment centre and arena for event organisers, and the redevelopment of Battersea Power Station is set to go ahead."

This frantic development in London's hotel stock may alleviate the pressure of shortening lead times - an issue hoteliers and planners face. "The thing we are struggling with is that business is being booked in so late - it's hard to predict a month or two ahead. Meeting planners are still leaving it late and trying hard to push rates down," says Macdonald Hotels sales director Jane Griffiths, who handles the marketing for the 120-room Montcalm Hotel.

Conversely, Business Travel Team's White feels London's hotels could improve their flexibility and believes more could be done to adapt to clients' needs. "Occasionally, hotels are not very good at sudden changes," she claims. "Their attitude can be, 'things are as you booked them, so why would you want to change them?'," she adds.

Yet as investment remains a priority for London's hoteliers - resulting in a broader range of properties and facilities - and with funds available to promote the city more effectively, meeting planners could still stand to benefit from the increased competition.

VERDICT

IBR sales and marketing director Fay Sharpe

Sharpe has had extensive experience of dealing with London's hotels

"We place about £10m of business into London and are probably one of the biggest bookers of space in the city," she claims. "As a company, we set up rates, terms and conditions every year with 75 of the capital's hotels. And because of our spend, we make sure clients get value for money and are not penalised for cancellations."

Despite the constant additions to the city's hotel inventory, Sharpe still sees high demand in peak seasons.

"The new hotels in the city in places such as Holborn and Threadneedle have helped and offer more space, but the biggest problem is everyone wants the same dates and to hold meetings during the same period. No-one meets around Easter or in August and everyone wants availability in May and October."

The chains IBR uses include Le Meridien, where the company spends a couple of million pounds each year. "They are so flexible, have good space and come up with solutions," says Sharpe. "We get excellent rates at Le Meridien Grosvenor House and Piccadilly." For Sharpe, the need for hotel partners to adapt is crucial. Now that lead times are down, she is regularly booking in groups of 80 people as little as four weeks in advance.

"Flexibility is such an important thing. Our corporate clients don't know how many people are going to turn up on the day. They may book for 100 and only get 80 showing up, so you need more flexibility than ever."

Sharpe rates the Grosvenor House because of the existing event space and is also excited by the investment being made in 86 Park Lane. The Cumberland Hotel is also being renamed Le Meridien Marble Arch and will feature more than 30 meeting rooms.

"It will have a big impact as it is a bigger property, with more than 1,000 rooms, and will market itself to groups of about 300 people," she says.

VERDICT

Carlson Relationship Travel Solutions sales director Gordon Owen

Owen feels London needs to constantly promote itself and upgrade its offer to organisers, if it is to compete with other destinations Carlson RTS uses a number of properties in the city. "We use a mix of hotels but as Radisson Edwardian is a sister company of Carlson, we try and use them whenever possible," he admits. "They offer everything including the rates, facilities, accessibility and parking."

However, Owen does feel that even though hotels are being more amenable, London can still be an expensive option for meeting planners. "It's still at the top end in terms of costs and although the hotels have tried to make it more competitive, availability is still an issue," he says.

"But, if you have got the time you can find the space," he adds. "Although for short-term bookings it can still be quite difficult to find ideal hotels, particularly with the facilities you might need."

Owen feels the issue of availability is particularly relevant to meeting spaces. "It may be that you are looking for a room without columns or that the meeting room you book is an odd shape."

For Owen, the lure of London can still make it worth the additional cost but the city cannot afford to get complacent. "It still is the business capital and does have a certain appeal. But for UK-based companies it may be easier to go elsewhere in the UK. Edinburgh is a nice destination and Manchester is becoming more appealing. What's important is the convenience of location for what the client is trying to achieve."

Owen also feels there is only so long the capital can live off its legacy of being the theatre capital and its historic infrastructure. "I don't think theatres are as much of a USP as they used to be. Edinburgh has the Fringe and Manchester has lots of activities going on," he says. "As a result, I think London - and its hotels - are going to have to work a lot harder."

VERDICT

The Q Group, divisional director of travel and logistics Lynn Backhouse

Backhouse feels London can occasionally be a frustrating place to book hotels

"We are placing a group in London in September and, as always, there is no space available," she says.

What has improved, however, is the attitude of the hotel chains to the C&I market. "In terms of getting back to us with information, Accor is top," she says. "Also, the people at Hilton must have been on some sort of course because they are now getting responses to us very quickly."

Where some hotels are not helping, however, is the lack of flexibility.

"For the September conference we have contacted 50 hotels so far. We need 350 rooms and conference space for 350 the first night and then 120 rooms the next night."

What infuriates Backhouse is hotels responding to the brief, but altering the conditions. "What's crazy is that hotels get back to you and say, 'we're happy to do it if you can guarantee 200 rooms for the second night'.

I know the hotels want to maximise their revenue but clients clearly know what they want."

For Backhouse, short lead times meaning rock-bottom rates is something of a myth. "We get offers of great rates for immediate bookings," she says. "But if we have a group to place in four weeks time these rates seem to disappear."

But it is not all doom and gloom. Backhouse has found some flexibility.

"We have a big brief for March, and, this time round, we have found widespread availability," she says.

VERDICT

Maritz Travel group project director Jeremy Brown Brown uses London regularly for meetings of varying sizes for both UK and international clients

Brown's most recent group was for 1,300 delegates attending a one-day event, with 650 delegates staying on overnight. He used a combination of hotels that included the Inter-Continental Park Lane, the Hilton London Hyde Park and the Hilton London Metropole.

"When you are holding events of this size in four- and five-star properties you are always fairly restricted," he says. "I think the London Hilton Metropole has done very well out of it and competes with some of the Park Lane properties for size."

Brown does feel, however, that the property's Paddington postcode may be a weakness. "Because of its location it doesn't have the same feel as the Park Lane properties," he says.

On the plus side, Brown feels the Metropole has improved constantly since it opened in its expanded format. "They have stepped up to the mark in terms of service," he says.

Other properties that Brown has used include the ever-popular Grosvenor House. "It has the rooms and banqueting size to back it up."

Brown feels London still lacks hotels catering to meetings of around 300 delegates, although there have been several additions in other areas of the capital's hotel and event infrastructure, but he feels London can still work depending on the event. "London does work for the UK market and has a huge draw depending on where the audience is coming from," he says.

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