Hotel Economics: Hotels plan growth as global economy recovers

by Melanie Nayer on

Is the hotel industry ready for a rebound? Based on the recent news of expansions and new properties from global hotel groups, it seems the hospitality industry is poised for a pristine few years.

InterContinental Hotel Group is continuing on its quest to keep the title of ‘world’s largest hotel operator’, recently announcing a global expansion that would increase the amount of its hotel rooms around the world by nearly one-third in the next three to four years. InterContinental, which owns various hotel brands including Crowne Plaza, Hotel Indigo, Holiday Inn, Holiday Inn Express, Staybridge and Candlewood Suites, currently operates more than 4,400 hotels and has 1,400 more in the pipeline, the majority of which will open in Europe.

The hotel group’s expansion means more hotels, but also more jobs. More than 100,000 jobs worldwide will be created in the InterContinental family. In the UK, where InterContinental plans to set up at least 36 new hotels, the hotel will hire an additional 3,500 employees to service the new properties, according to a statement from the hotel company in The Scotsman. In addition, the paper reports the InterContinental is putting plans in place for Scotland’s first five-star InterContinental-branded hotel.

InterContinental’s expansion isn’t the first we’ve heard about. JW Marriott announced plans to build 40 hotels in India by 2013; Kimpton and Hyatt are opening various hotels throughout the U.S. and earlier this year, Ritz-Carlton President Simon Cooper gave us some insight into new hotels emerging in Asia and the Middle East. But the question remains: can the hotels sell the rooms? According to a recent study of hotel room prices in Europe from trivago, more rooms are already selling for increased rates, which means more travelers are loosening their purse strings.The study shows the average price of hotels in Europe has increased 12 percent from March to April 2010, the highest point since October 2009.

What’s this mean for hotels? The travel industry stays afloat due to basic supply-and-demand principles. Based on these numbers, the demand for hotel rooms has risen causing hotel operators to raise their rates – a good sign for a rebounding economy.



Trivago reports that most European cities have experienced price growths of 10 to 20 percent, and in popular tourist destination cities such as Rome, Barcelona and Istanbul, prices rose by as much as 42 percent. Additionally, occupancy in the three- and four-star hotels – which make up the majority of the properties in the InterContinental Hotel Group – rose 2.7 percent in Scotland, against increases of 3.8 percent in regional UK, 3.7 percent in England and 9 percent in Wales.

If the numbers continue to increase across the pond, the InterContinental and other hotel groups could be right on target with their global expansions.

Holiday Inn’s human bed-warming services

by Melanie Nayer on

Valentine’s Day brings out the romantic in people, and for some people there are no limits to the depths of their romance. Case in point: the fine staff at the Holiday Inn’s London Kensington hotel.

These happy helpers will hop in your bed (for free) for a five-minute “human bed warming” service. Upon request, a willing member of the hotel staff will jump in your bed before you get in and “warm it up”, dressed head-to-foot in an all-in-one sleeper suit, which we assume looks something like a Snuggie with feet.

“Like having a giant hot water bottle in your bed” is how Holiday Inn spokeswoman Jane Bednall described the idea to Sky News.

Of course, it’s been a cold winter in London so we’ll give Holiday Inn props for coming up with a creative way to taking the chill out of the air. However, while medical professionals claim a warm bed helps you fall asleep faster, there is something to be said for you bringing the heat yourself – consider it a romantic start to your Valentine’s Day weekend.

Tips for tippers: it isn’t what you expect

by Tom Johansmeyer on

Tipping’s a tough nut to crack. Should you tip a housekeeper? Back in the day, the rule was leaving some cash only if your stay was 30 days or longer. Since then, however, it seems to have changed. And, what’s appropriate for a valet? Bellman? Skycap? Travel means tipping, and there are plenty of points at which you can expect to do this. If you go to the same hotel or use the same car service frequently, you may want to adjust your tipping habits, as well.

If these questions make you feel ignorant, you’re not alone. Michael Lynn, a prof at Cornell University’s School of Hotel Administration, has conducted to nationwide tipping surveys and has found that a third of the respondents don’t know to leave 15 percent to 20 percent of the tab at a restaurant. Throw hotels and drivers into the mix, and it’s unsurprising that the rules aren’t understood as clearly as they could be.

So, USA Today and I are helping you know what to tip and when. A recent article by Gary Stoller provides some good ideas, and I’ve tossed in a few of my own.

Valet: This one was news to me. Don’t drop cash to the guy who opens the car door or brings the car to the valet lot. Instead, pay the guy who brings it back, generally $2 to $5. I’ve been overtipping on this one for a long time.

Bellmen: These guys carry bags, so they’re earning their tips. Give ’em $1 to $2 a bag, more if you pack for a weekend like you’re moving in for a month. Heavy bag, as well, warrant an extra tip.

Maids: Once upon a time, maids were only tipped if you were staying for the long term. I guess this has changed, and you’re supposed to leave $1 to $5 daily. But, if you’ve been tipping valets for both drop-off and pickup, this should be break-even for you.

Concierges: Don’t tip for the basics. If you’re asking for directions, recommendations or simple answers, those are free. Did the concierge score hard-to-find tickets? A table at an impossible restaurant? Pony up: $10 to $50. Nonetheless, it’s your call. Vivian Deuschl, a vice president at the Ritz-Carlton chain, says that you should expect fantastic service, “There is no obligation to tip.”

Skycap: Pay for help when you check your bags curbside: $2 to $3 a bag is fine. If you have a lot of bags, throw in a little extra, a good rule to apply for the driver who takes you to and from the airport, too.

And, here are a few others …

Service matters: Tips are provided for the service you receive. If you receive unacceptable service, don’t offer a tip. But, if service is so bad that you aren’t tipping, it’s probably a good idea to call a manager and give your side of the story. First, it will keep you from getting shafted by other hotel employees when the word spreads. Also, it will alert the management to a problem with the staff. Be thorough, and don’t whine.

“No tipping” is sacrosanct: Some resorts have no-tipping policies. They always make it very clear up front. Also, they will tell you if there are any exceptions. Curtain Bluff, in Antigua, doesn’t allow tips and makes alternatives clear (there’s a charity on the island). The spa is a “tipping zone,” however, and the front desk will let you know. If you try to tip in a no-tip hotel, the employee will probably let you know, but it’s best not to create the awkward situation at all.

Special requests: Think beyond restaurant reservations and event tickets. If the concierge does the impossible for you, shell out for it. I’m thinking of several super-luxury favors I’ve heard (sorry, can’t reveal them) from industry insiders. If you’re rolling in the big leagues, don’t bother carrying singles; you’ll need Benjies.

Be realistic: Tip what you can afford. You don’t need to toss around boatloads of cash that you don’t have. It may feel good to be a big tipper, but the high you get now will hurt like hell later. Remember that you’ll need to live with the financial situation that you create while on vacation.

Don’t tip from guilt: You don’t have to solve the financial crisis on your own. The recession has led to a travel industry slump, which means hotel employees won’t be making as much. Think of it this way: these guys aren’t buying more of what you make just to help you out. So, don’t think you need to return the favor.

Know your environment: There is a lot of mileage between Eden Rock and the Holiday Inn: don’t expect the same tipping strategy to work at both locations.

[Photo by AMagill via Flickr]

IHG to 300 Holiday Inns: put up or shut up

by Tom Johansmeyer on

The message is clear: shape up or ship out.Up to 300 Holiday Inn hotels could be booted from the brand if their owners don’t get their respective acts together. Intercontinentals Hotel Group has told them they need to get on board with an enormous improvement plan by February 1, 2010.

Does 300 sound like a lot? It is. In fact, it’s 12% of the 3,300 hotels that fly the Holiday Inn flag. The holdouts haven’t begun to play ball with the brand’s requirements, which include new bedding, pillows and towels — not to mention modern music, a renovated lobby and green uplighting on the exterior. The total package is expected to cost around $1 billion.

Kevin Kowalski, brand chief for Holiday Inn, made clear how flexible the mother ship is willing to be: “We’re not changing the timing.” So, he told the owners of these 300 hotels, “If you have a quality problem, fix it.” Not doing so by the deadline will garner the hotel owners failure letters. Sound relatively harmless? Their banks will get them, too, which could trigger some hefty consequences.

[Photo by curioustraveller99 via Flickr]

Holiday Inn opens NYC hotel made entirely of key cards

by Katie Hammel on

As part of an effort to build buzz around the relaunch of 1200 Holiday Inn hotels this month, the lodging chain has opened a very special hotel in New York. It’s not your average hotel though. It’s made entirely of hotel key cards.

The “Key Card Hotel” was built by Guinness World Record holder Byran Berg, who first broke the record for “World’s Tallest House of Freestanding Playing Cards” in 1992 at the tender age of 17. Since then, he’s broken the record 10 times. Now he’s created a life-size (though small at 400 square feet) hotel made of key cards. Visitors can’t actually stay in the “hotel” (and would you really want to sleep on a bed of plastic?), but they can come marvel at Berg’s creation, which is made of 200,000 cards and weighs two tons, tour the lobby, guest room, and bathroom, and learn about the Holiday Inn’s “Keys to Change” promotion and the many improvements that will be taking place at the brand’s properties. By the end of 2010, over 3000 hotels in the chain will be updated, at a cost of $1 billion, making it the “largest relaunch in the history of the hospitality industry”.

As part of the promotion, guests can enter to win free nights at one of the relaunched Holiday Inn or Holiday Inn Express locations around the world. One grand prize winner will also receive a 3-day, 2-night trip to any Holiday Inn hotel in the world, including round-trip air transportation. To enter, just sign up on the promotion’s website.

The Key Card Hotel will be open at New York’s South Street Seaport from now until September 21. During the promotion, Berg will also create a 9-foot tall replica of the Statue of Liberty using playing cards in the lobby. The online contest runs until October 22nd.