28 January 2010

Hotels look to overcome name game blame

The latest in recessionary times is name changing, particularly when you’re trying to sell luxury hotel services without such descriptions as "resort" that have become stigmatized after lavish taxpayer-paid retreats.

Examples:

• The Ballantyne Resort in Charlotte, N.C., changed its name during the summer to the Ballantyne Hotel & Lodge after several corporate clients indicated it would have a better chance of landing their business if it weren't called a resort.

• Same story for the Westin Stonebriar near Dallas, formerly the Westin Stonebriar Hotel & Resort.

• And ditto the Renaissance Orlando at Sea World, no longer the Renaissance Orlando Resort at Sea World.

"Other than the name-dropping, little else has changed," says the Wall Street Journal.

The same golf-and-spa style amenities are still there.

That such trivial compromises are needed to salvage business is a sign of the times for struggling luxury hotels and resorts -- some of which are finding that the name changes are actually improving business.

"The resort stigma was stoked by widespread outcry late in 2008 about a $400,000 sales retreat that American International Group Inc. (AIG) planned to host at the St. Regis Monarch Beach Resort in Dana Point, Calif.," said the newspaper.

AIG, the recipient of $180 billion in taxpayer assistance, canceled the event after bitter criticism.

The 400-room St. Regis did not recover from the bad publicity and was foreclosed upon by one of its lenders, Citigroup Inc.

Hoteliers call the resulting fallout the AIG effect.

Politicians railed against companies—especially those that got federal aid—meeting at resorts in live-it-up locales like Las Vegas. In turn, companies and government agencies revised travel policies to discourage, if not prohibit, resort stays. .

Companies "are just being very conscious of the location selected, because everybody's so paranoid about perception," said Jennie Jacobson, president of event-planning company Unique Events Inc. in Agoura Hills, Calif.

The result has been a spate of meeting cancellations.

Some hotel chains such as Marriott International Inc. have reported that revenue from group meetings declined by more than 20 percent in last year's third quarter from a year earlier.

But that’s not true for everyone.

Dale McDaniel, general manager of the 493-room Loews Lake Las Vegas, says a name change has improved his property's bottom line after the word "resort" was removed. "There could be as much as a 10 percent swing in business," Mr. McDaniel said. "All it takes is a couple of large pharmaceutical groups to book here because we don't have resort in our name."

By David Wilkening

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Your Comments (1)

Brand consistency is still missing

Hotels groups should concentrate on their brand consistency if they wish to gain or retain business. Starwood Hotels are one standard in Europe, Asia and Australia but a lesser standard in the USA. Accor is all over the place with so many brands its difficult to know which is of what standard, added to the fact that it's 'staple' brand - Novotel - is three-star in the northern hemisphere but four star in the south. The new 'Pullman' brand is at best described as an 'economy five-star" in my experience - the rooms are five-star but the service is definitely lacking. It is important that customers know what to expect when a hotel brand name is put to them - very few groups have brands which remain of the same standard the world over.

By Peter Gray, Tuesday, February 2, 2010