Newsletter - June 3, 2002

THE RITZ-CARLTON PHILOSOPHY – SIMON COOPER DISCUSSES EVOLUTION OF THE BRAND

By Kevin Sinclair,  Hotel Asia Pacific

Putting on the ‘Nouveau Ritz’

Ritz-Carlton president and COO Simon Cooper is allowing the brand let its hair down a little. He explains his philosophy to Kevin Sinclair

Ritz-Carlton is hunting hard for opportunities in Asia but, says the group's president and COO Simon Cooper, they are hard to find in the key cities where the US-based luxury chain would like to expand.

The roll call of new Ritz-Carlton's scheduled to open in the next three years is focused mostly on North America, with others in Chile, the Caribbean and Berlin. Asia is noticeably absent. Why?

"There are no suitable projects," explains Cooper, who was in the region last month heading a 20-strong sales and marketing delegation calling on key customers

"In Tokyo, land is too expensive, even if you can get it. In Beijing, we've been working on a prospective project for a long time. In Bangkok, we've had a project identified for years. We've also looked in Taipei."

This doesn't mean the company does not regard Asia as vital for its future global development.

He would like to be in Phuket to balance the tremendous success of the Ritz-Carlton Resort in Bali, and something definite is about to be announced in the Maldives. 
But it is the big cities that gnaw at him. The Ritz-Carlton Osaka is so successful that he seems to be literally aching to get into Tokyo - but then those huge problems loom.

Cooper is frank and open when answering recent criticism of the group which appeared in the Wall Street Journal, accusing the brand of moving away from its core business of running spectacularly lavish hotels with signature decor based on refined elegance. 

Also questioned was its decision to branch out into timeshare-type structures and residential units, both labeled with the brand’s lion logo. Does this mean a basic change in the group’ philosophy?

"Not one word of it," insists Cooper. "Not one word."

How about the new Ritz-Carlton in Manhattan’s Battery Park, which has 287 rooms in the hotel and condominiums on top. Does that dilute the brand?

”No,” says Cooper, “that gets you into places where you otherwise couldn't have a hotel. The size of that property would call for about 800 rooms and, with just a hotel, it would not be feasible as a Ritz-Carlton.

“It's good for Ritz-Carlton - we can get the right size hotel for the market - and the developers love it because they get quick return on investment by selling the condos.

“The Manhattan project has just 11 apartments on top of the hotel, selling for a minimum of US$25 million, and the occupants are very high profile media, financial and other celebrity types. That doesn't hurt the Ritz-Carlton image, either.”

Ritz-Carlton Clubs are another change from the strictly hotel format. He uses Aspen as an example: here, investors pay US$250,000 for two weeks use of their apartments in the peak season, and another two weeks off season. With houses in the resort area costing up to $3 million, many see this as excellent value.

But, Cooper emphasises, the core of the group remains strongly with hotels, and its portfolio now numbers 44 (28 city hotels and 16 resorts).

Some of the newer properties are different from the classic Ritz-Carltons which have graced central business districts in North America, Europe and Asia since the first branded property opened in Boston in 1983. (Ritz-Carlton likes to proudly date its provenance even further back, to the immortal Swiss hotelier Cesar Ritz, who died in 1918.) 

Besides the original Ritz-Carlton, Boston also has the 192-room Boston Common, which is the new version of the modern, still elegant, but casual Ritz-Carlton. 

The company describes this evolution of the brand, with a lighter touch in furniture and a more casual feel, as "Nouveau Ritz, letting its hair down". 

The feel is contemporary and there's a relaxation of the dress code expected of guests. Colours are lighter and brighter and fabrics are less formal, while furniture has a slightly modernistic look.

Isn't this somehow a rejection of the classic style for which Ritz-Carlton is famed? 

“No, not at all,” argues Cooper. "Design needs to reflect your environment, and this is making people flexible in an elegant atmosphere," he says.

“The new disciplines of the information, computer and finance industries, as well as the young urban market, call for a more relaxed approach in some city hotels. In resorts, the decor must strive to make people feel comfortable wearing shorts in the lobby. But these changes of emphasis don't affect the basic values.

"In the end, the Ritz-Carlton philosophy remains simple. We build an absolutely outstanding property and staff it with absolutely outstanding people." 

Hotel Asia Pacific  Magazine   http://www.hotelasiapacific.com

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HONG KONG HOTELS CUT RATES IN BID TO LOCALIZE

TravelAsia.com  -  The Hongkong hotel industry continues to make slow and steady progress and hotel analysts say the current avalanche of offers aimed at SAR residents is no cause for alarm. Hongkong’s top hotels have rolled out all manner of cut-price packages over the last month but Morgan Stanley hotels analyst Tom Kim says the current glut of hotel offers is “not an act of desperation”.

Hotel Inter-Continental, the Peninsula, the Mandarin Oriental, the Ritz-Carlton and the Grand Hyatt all have deals aimed at local residents running this summer, leading some observers to presume they’re another attempt to fill empty beds.

Not so, says Kim, who believes such programmes are “quite common” although the fact that so many hotels are offering similar deals is admittedly a less frequent occurrence. “Their real purpose is to enhance weekend revenues. A lot of Hongkong business traffic checks in Monday and checks out Friday, and the offers are just an effort to keep occupancy up. Besides, “it’s not an exaggeration to say things are looking better,” he adds.

Such opinions are confirmed by reports from Hong Kong and Shanghai Hotels (HKSH), whose occupancy rates rose in the first quarter. The Peninsula recorded an occupancy rate of 63 percent during the first quarter of 2002, up from 58 percent during the same period last year. However, room rates have yet to fully recover with a year-to-date average price of HK$2,596 (US$333) compared with $3,004 last year. The Kowloon Hotel, which the company also owns, showed similar results with an average occupancy of 92 percent at a rate of $454, compared with 90 percent last year at $532.

The Ritz-Carlton group also posted signs of a recovery. The group’s Hongkong hotel reported that its occupancy rates were back to pre-1999 levels but room tariffs were still some 20 percent below pre-September 11 rates. Most of the group’s other hotel holdings overseas, including those in Thailand, the Philippines, Mainland China and the US, reported similar results. HKSH chief executive Clement Kowk King Man was quoted as saying “the signs are hopeful for better prospects for the rest of the year”.

HOTEL PRICES RISING

Christina Valhouli   Forbes.com

Last winter, in the wake of Sept. 11, hotels could barely give away rooms. The travel industry had virtually ground to a halt. Airlines declared bankruptcy. Luxury resorts fired staff. In a bid to lure reluctant travelers, many hotels began slashing their prices, in some cases by as much as 50%, and offering incentives like free nights, golf and triple mileage

That's all about to change. With Memorial Day, the travel business traditionally kicks into high gear and, in order to rescue their bottom lines, many industry analysts are urging hotels to raise their prices.

Which, of course, is bad news for travelers looking for deals. While some hotels--particularly those in off-season destinations like Florida and the Caribbean--are hesitant to raise their prices and scare away tourists when they need them most, if you haven't locked in those cheap rates by now, you had better prepare to pay the highest prices since last summer.

According to Randy Smith, chief executive of Smith Travel Research in Hendersonville, Tenn., hotels don't have any other choice. "We think that hotels have lowered their rates too much. What has concerned us is that occupancies have firmed up but rates are pretty much the same as they were last year."

Jake Fuller, a lodging analyst with San Francisco-based investment bank Thomas Weisel Partners, agrees. "Demand after Sept. 11 has slowly marched back," he says, "and it's time for hotels to start raising prices again."

Hotel rates have barely changed from one year ago. Smith Travel Research reports that the average price of a hotel room last year was $84.79 per night. The 2002 year-to-date average is $84.71. Occupancy rates in 2001 were down 5.7%, compared to 5.6% for the year to date.

Smith and other hotel analysts say part of the problem is the industry's knee-jerk response to difficult economic times. Hotels automatically cut prices--but they're sacrificing revenue for occupancy rates, says Stacy Silver, publisher of Naples, Fla.-based Hotel Business magazine. "The hotel industry is in danger of becoming a commodity like the airline industry," she says. "As an industry, we have to make the decision to maintain rates during difficult times."

That strategy makes sense to Bryan Maher, a hotel analyst with Credit Lyonnais in New York. "If you keep rates the same and sacrifice occupancy, there are fewer rooms to be cleaned and, say, lower heating and air-conditioning costs."

Some hotels, such as the newly opened Ritz-Carlton on Manhattan's Central Park South, are not discounting their rooms to boost summer sales--and never have. "The Ritz-Carlton does not believe in discounting," says spokesperson Nancy J. Friedman. The current introductory rates are high--and will remain high throughout the summer. Right now, a superior room (the cheapest) is $650 per night but will drop to $425 after Labor Day. The two-bedroom royal suite, which is $13,000 per night, will not drop in price.

Another hotel that refuses to cut rates is the newly opened Marco Beach Ocean Resort on Florida's Marco Island. The current rate for a two-bedroom suite is $450 per night. President Joe Freni of the hotel's parent company, Gulf Bay Group, says that occupancy is high, because guests are willing to pay for extraordinary service and quality. "A lot of hotels laid off their staff in September, which is the last thing we would do," says Freni. "We've ratcheted up the service level, because that's what is going to set us apart."

Starwood Hotels & Resorts Worldwide (nyse: HOT - news - people ), which owns the W hotels as well as the Westin and St. Regis brands, among others, announced an across-the-board 5% rate raise in May, which startled the industry. "I think it was a big announcement," says Weisel's Fuller. "The fact that they announced it publicly was also odd. Most chains don't do that."

Odd or not, other hotels are watching carefully and taking note. Tom Corcoran, the president and CEO of FelCor Lodging Trust (nyse: FCH - news - people ), which owns the Embassy Suites, Holiday Inn and Sheraton, says he'd "like to raise everything by 5% but we'll have to see." Corcoran says that he has seen occupancy rates increase since the fourth quarter of 2001. Rick Garlick, managing director of the New York hotel research and consulting firm Granite Partners, says he will probably be advising his clients to raise their rates again in the near term.

What this means is that travelers should start booking now. Luckily, deep discounts still exist throughout the summer. Hong Kong's The Great Eagle Hotel is offering rooms at 50% off--a standard room is $165 per night, and the more luxurious rooms on the Club Floor are $227 and $241 per night. Guests will get freebies such as complimentary breakfast, Häagen-Dazs ice cream, local calls, evening cocktails, all-day soft drinks and valet services. The Hong Kong Tourist Board is also throwing in discounts of up to 70% off fashion, jewelry and electronics.

The newly renovated Flatotel in New York is offering special weekend rates of $169 per night during the summer, or $199 for a larger room. Both prices include discounts at Rockefeller Center, Bloomingdale's and Macy's. In comparison, rooms averaged around $250 per night last year.

Wyndham International (nyse: WYN - news - people ) is also taking its discounts seriously. It recently commissioned the Strategy One marketing firm to survey what people felt was really a deal. According to the survey, 59% of respondents felt that most companies use "bait and switch" tactics to lure customers; 62% did not expect to pay full fare; and 77% felt that one free night counted as a good hotel deal. Dave Johnson, the company's chief marketing officer, says Wyndham listened carefully and is now offering such incentives as (you guessed it) a second night free or a second room at half price, as part of its 50/50 Weekend Escape program. Book now before it disappears.

GLOBAL TOURISM CONTRACTED FOR THE FIRST TIME IN 2001

(Xinhua via COMTEX) -- The World Tourism Organization (OMT) said on Tuesday that in 2001 the sector's global activity contracted for the first time in history, by 1.3 percent. However, in 2002 a recovery is already occurring. In an opening speech at the 38th OMT meeting in Quito, the OMT Secretary General, Francesco Frangialli, said global tourism was affected by deceleration in the United States and Germany, the main origins of tourists. The situation worsened after the September 11 attacks on the United States, he added.

Frangialli, from France, said all arrivals diminished by seven percent in the Western Hemisphere, 8.8 percent in North America and 7.1 percent in South America. In contrast, tourism grew by 3.2 percent in Central America, one of the few regions that registered an expansion, he said. The OMT Secretary General said that in numbers the American continent last year received 120.7 million tourists, a 5.9 percent drop from the 128.3 million of 2000. American tourism earned 121 billion dollars, a nine percent drop from the 133 billion of 2000, he said. Frangialli gave reminders that the first ministerial meeting of the Tourism and Environment Protections sectors will take place on May 30-31 at the Galapagos Islands of Ecuador, and the 4th Iberian American on the Tourism Satellite Account will take place on June 25-28 in Cartagena (Colombia).

GUESTS CONTINUE TO BE BLINDSIDED BY HOTEL TELEPHONE SURCHARGES

By Doug Bedell, The Dallas Morning News

Martin Halper got his lesson in hotel telephone surcharges like most travelers do – the hard way. 

While enjoying a stay at Atlanta's Westin Peachtree Plaza, he made a 22-minute, direct-dial call to Maryland after 10 p.m. 

The rate couldn't be too bad, he thought. After hanging up, he decided to check his bill on the television readout. 

What he saw made his jaw drop. 

Those 22 minutes cost him $41.56. And the front-desk attendant insisted that the billing was correct. All direct-dial long-distance calls, he explained, are billed as if they were operator-assisted at AT&T Corp.'s maximum rate. The hotel then adds a connection charge of $1.50 and a $1.50-per-minute surcharge. 

"Based on this experience, I will attempt to never again stay at any Starwood property," Mr. Halper wrote the hotel manager, noting that there was no rate card in his room. Even after receiving a partial refund from the hotel, Mr. Halper was so upset that he posted a narrative of his experience and all correspondence from the hotel chain on an Internet news group on travel. 

There it resides with dozens of other allegations of hotel phone charge atrocities. Joining Mr. Halper is a U.S. Commerce Department employee who says he was billed $5.63 each for making 21 local calls from his Hyatt hotel room, even though no one ever answered at the other end. Then there's the laptop-toting Internet addict who dialed a local AOL access number and stayed online three hours, only to learn his hotel was charging him 10 cents for every minute beyond 20. 

Christopher Elliott has heard it all. As one of the nation's leading business travel experts, Mr. Elliott says there is a simple solution to sticker shock in the unregulated – sometimes sneaky – world of hotel telephone surcharges. 

"These days, if it were me, I would never even pick up the hotel phone," says the Key Largo-based travel editor for Entrepreneur Magazine and ombudsman for National Geographic Traveler. 

In the last three years, falling occupancies – exacerbated by the Sept. 11 travel scare – have forced hotels to search out new ways to shore up their bottom lines. Telephone surcharges have proven effective, Mr. Elliott says, because business travelers rarely contest them. 

"I can't blame the hotels," says Mr. Elliott. "I think they have a right to make a profit. It's just the way they're going about doing it is not right. They're using technology to find a way to squeeze a little bit more money out of the traveler." 

Responding to Mr. Halper's complaint, a Starwood spokesman wrote: "Our pricing structure is a combination of our overall telephone charges and is derived from the telephone systems and processing. While we do not actively track other properties' prices, I believe we are in a competitive position." 

Hospitality industry consultant Robert Mandelbaum of Atlanta says hotels this year will make 2.2 percent of their total revenue from guests' use of telephones. On average, hotels make about 50 cents for every dollar they charge for telephone connections, according to Mr. Mandelbaum's research for PKF Consulting. While telephone revenue remains a relatively minor part of their income, it is a sector that has been in decline as consumers take advantage of alternatives, Mr. Mandelbaum says. 

Before 1990, Mr. Mandelbaum says, most hotel telephone systems were a break-even proposition. Hotels began experimenting with surcharges to create new revenue streams, then began adjusting surcharges to reflect their guests' increased use of calling cards and pay phones. 

Mobile business and leisure travelers consistently rank hotel telephone surcharges in the top 10 on-the-road irritants in annual surveys by American Express. And a recent poll by the FrequentFlyer.oag.com showed that more than 66 percent of responding members now use their cellphones to avoid in-room telephone charges completely. 

As cellphone use increased, some hotel chains have attempted to regain those lost profits by adding surcharges to local and 800-number calls. For example, most Hyatt hotels are charging at least 50 cents for making "toll-free" calls, says Mr. Elliott. 

And, because guests are increasingly logging onto the Internet for long durations, some chains are now adding hefty surcharges for long connection times. At Courtyard by Marriott hotels, says Mr. Elliott, guests are charged 10 cents a minute or more for calls beyond 30 minutes. Company-owned Sheratons, Westins and Four Points, all Starwood Hotels & Resorts Worldwide brands, are charging 10 cents a minute for toll-free calls longer than 60 minutes, he says. 

Best bets for the lowest telephone rates are usually extended-stay hotels such as Residence Inns, says Mr. Elliott. 

But no matter where a traveler chooses to stay, it is a good idea to make an extra effort to read in-room rate cards completely before dialing out, he says. 

No federal rules govern disclosure of telephone surcharges, although most reputable hotels include a detailed rate card somewhere in their in-room literature, says Mr. Elliott. "What really upsets people is when the hotel isn't up front about it all," he says. "Maybe they have a small reference to surcharges in their little guest directories, but it often is very hard to find." 

Hotel spokesmen contend surcharges for longer calls are necessary because Internet connections are tying up their lines. But Mr. Elliott believes that's a red herring. 

"If that were the case, you should also charge people for the incoming calls because they take up as much bandwidth as the outgoing calls," Mr. Elliott says. 

With the Internet craze of the late 1990s, many hotels scrambled to add high-speed data lines to their guest rooms, often giving away the service as an added attraction. But today guests can expect to pay for those connections. 

At the Melrose Hotel of Dallas, for example, charges for accessing an in-room T1 line are $8.95 for each 24-hour cycle. 

Billing begins, says manager Ivan Osorio, with the first login. 

Since Sept. 11, Mr. Osorio says, guest use of the high-speed connection has dropped about 60 percent. "My personal explanation is that with the state of the economy today, companies are looking for savings all over," he says. "Most people are checking their e-mail messages today with the slower connection on the dataport." 

When blindsided by hotel telephone surcharges, guests have some options. Confront the front desk personnel first, then ask for a manager if no satisfaction is obtained, Mr. Elliott advises. After that, writing a letter to hotel chain managers often proves worth the time, he says. 

"But in general, once you're out of the hotel it's very hard to get any action," Mr. Elliott says. 

There is no national oversight body for most billing disputes, but the American Hotel and Motel Association (www.ahma.com) does have some influence in mediating disputes once you've exhausted other measures. The Federal Communications Commission (www.fcc.gov) offers a free brochure on hotel telephone charges called "Know The Phone Facts Before You Hit The Road." 

You can also air your grievance on complaint sites such as eComplaints.com, Passengerrights.com and Planetfeedback.com, says Mr. Elliott. That may make you feel better about your ordeal, but it probably won't prompt any action, he says. 

Finally, says Mr. Elliott, membership in frequent-stay clubs offered by major chains does have its privileges. A traveler flashing a Hilton Diamond Club membership card often gets more attention than a protesting guest without one. 

"Make sure they know that you're a valued customer, and if they do something like this you're going to take your business elsewhere," says Mr. Elliott. "If they see that you've spent 100 nights at their properties last year, they're going to make these things disappear." 

AVOIDING LARGE HOTEL TELEPHONE CHARGES 

Use your cellphone to make outgoing calls. 

Depending on roaming fees and hotel long-distance rates, you can often save. 

Don't use hotel phones for Internet connections. 

Consider purchasing a cellphone modem for Internet connections. Many hotels now add surcharges for calls that last more than 30 minutes or an hour. 

Be careful about connecting for long periods. 

Know the hotel's rates. Hotels often keep rate cards with these fees at the front desk and by the phone in each room. Make sure to read over the rates before making any calls and ask the front desk any questions you may have. 

Use a calling card. Some hotels don't have a surcharge if the guest uses a calling card to make outside calls. Check with the hotel to see what their policy is and to make sure you're not subject to a connection fee. 

Use toll-free numbers. Policies differ from hotel to hotel, but toll-free numbers are not always subject to a surcharge. Again, check with the front desk. 

Group calling card calls. Most calling cards allow you to let the other party hang up while you are still on the phone. Once this happens, press the pound sign (#). This will usually keep you connected, and you won't be charged an additional connection fee. 

Use five-digit codes. Many calling card carriers have a five-digit code that may be entered before dialing the 800 number of the carrier. Check with your calling card carrier to see if your carrier has such a code. 

Use prepaid calling cards. Although you are often subject to a connection fee, the per-minute rate for calling long-distance will come from your prepaid card rather than being charged to your bill. 

Watch for hidden charges. Some hotels are charging for uncompleted calls at the same rate they charge for completed calls. 

SOURCES: Dallas Morning News research; Christopher Elliott, consumer advocate and travel industry critic

TOURISM STILL GALLS THISTLE

(SHARECAST) - Thistle Hotels warned today that the decline in international tourism is still hitting turnover and that the outlook for overseas travel "continues to be uncertain." Chairman David Newbigging said turnover for the 18 owned or leased hotels dropped 14% to £53.9m in the current financial year from the year-earlier period.

Revenue per available room, or Revpar, for the owned or leased hotels declined 14.4% to £52.46 for the first 20 weeks of this year. While occupancy was little changed at 70.3%, compared with 72.3% last year, the average room rate was 12% lower than in the same period a year earlier because of the decline in the business traveller market.

The drop in overseas visitors had a greater effect on the owned or leased hotels because most of these are in London. The company's 38 managed hotels are mainly regional, relying more on domestic demand, and so have performed better than the London-based ones. Turnover for the managed hotels dipped 3.2% to £50.6 million and revpar fell 4.8% to £37.42.

Newbigging told the Annual General Meeting today: "We are confident about growth in occupancy compared to last year over the balance of this year and we expect some increase in room rate which will be reflected in an improving Revpar."

 
"The improved asset quality and strong balance sheet is a good platform going forward and for preparing the business for an upturn in the London market in particular."

Thistle, London's largest hotelier, agreed to sell 37 hotels in April to a subsidiary of venture capital group Euro & UK Property for £600m to cut debts and fund future expansion.

The company suffered last year from the affects of the foot-and-mouth epidemic and a general economic slowdown even before the terrorist attacks in America on September 11.

The shares fell 5p, or 3.8%, to 127.5p in afternoon trading, valuing the company at £614m.

Thistle, which completed a three-year refurbishment programme in 2001, said in March that it is in a strong position to weather the downturn and grab opportunities when trading conditions pick up.

CARAVAN CANVASS FOR SUSTAINABLE TOURISM

TravelAsia.com  -   “Sustainable tourism is not only ecotourism or nature-based tourism. It encompasses so much more – from best practices like nurturing the environment to protecting a traditional way of life,” says Stephen Yong (stephen@pata.th.com), director–office of the environment and culture, Pacific Asia Travel Association (Pata). He adds that Pata has always been aware of the need for sustainable tourism, but it’s only in recent years that the industry is ready to take serious action.

Pata will be hosting the 1st Pata Sustainable Tourism Conference from October 23 to 26 in Banten, West Java. With the theme ‘Protecting indigenous culture and the environment for sustainable growth’, the four-day event is being developed in line with the ‘code for sustainable tourism’ (www.pata.org) which was jointly adopted by Pata and Apec last year.

Sustainable tourism can be approached in two ways, namely academically and commercially. The Pata event will bring together the academic community and business-minded people to discuss the nuts and bolts, as well as dollars and cents so that tourism initiatives can be formulated in a sensitive, practical and profitable manner.

But even before the October forum, Pata has already lined up various events to reinforce the importance of sustainable tourism. It has organised a five-day educational road tour highlighting the environmental and cultural attractions of Thailand. This trip is held in conjunction with the Tourism Authority of Thailand (TAT) and supported by Avis-Rent-A-Car, Thailand. The June 12 to 16 caravan trip will give travel industry professionals a first-hand experience of sustainable, community-based tourism.

A self-drive tour, it will begin in Bangkok and will visit Khon Kaen, Nong Khai, Loei, Phitsanulok and Petchabun before returning to the Thai capital. The itinerary includes visits to three national parks, as well as to community tourism projects such as the Ban Na Kha silk weaving village. Participants will be able to see the growing niche of agricultural tourism in action at a farm as well as at a research station. And during the Phi Ta Khon ghost festival, a uniquely Thai event, caravan participants can dance alongside villagers decked out in traditional masks and colourful costumes.

“This caravan trip is a pilot project,” says Yong. “Our aim is to show people how tourism can benefit local communities, and at the same time conserve and enhance culture, history and nature.” He adds that the caravan concept could be applied to other Pata destinations in the future.

Participation is open to all Pata members, Pata Chapter members and other interested travel industry professionals. Two-people packages cost US$599 for Pata members and $799 for non-members. The package includes vehicle rental, double/twin accommodation for four nights and three daily meals. Single rates are also available. In addition, Siam Inter-Continental Hotel in Bangkok is offering a special rate for pre- and post-caravan stays.

For more information or to register, visit www.pata.org. Or contact Aaron Tan, manager-support services at fax: (66-2) 658-2010, email: aaron@ pata.th.com 

AUSTRALIA: BED TAX AN INDUSTRY NIGHTMARE

The Canberra Times...    -   The Australian Hotels Association has urged the ACT Government to reject the idea of a bed tax, warning it would cost jobs and scare away tourists.

The AHA was responding to comments from Greens MLA Kerrie Tucker who said the Government needed to consider reintroducing a bed tax as well as other forms of revenue raising.

Ms Tucker also raised the possibilities of increasing parking fees in the city centre, increasing rates on luxury homes and basing registration fees on the value or fuel consumption of a car. ACT AHA general manager Nick Proud said yesterday, "A bed tax would cost jobs and investment in Canberra's hotel sector just like it did in Sydney before they dropped it.

"People are looking for value for money. A bed tax would handicap our hotels and make it more expensive to stay in Canberra. That will cost jobs and stop our tourism industry from growing."

The Canberra Accommodation Association also expressed concerns at Ms Tucker's suggestion, saying the industry was still recovering from the effects of September 11 and the collapse of Ansett.

"The notion that accommodation providers can afford to carry another tax burden illustrates a limited understanding of the current economic reality," association chairman Mark Sproat said.

ACT Treasurer Ted Quinlan said earlier this week the Government was prepared to sit down and discuss options for reforming the ACT's revenue base, but a bed tax was not likely to be reintroduced.

"A bed tax was signed away with the GST. That is now gone," Mr Quinlan said.

JAPANESE HOTELS VIE FOR WORLD CUP WINDFALL

The Japan Times   -   Since the  Friday opening of the 2002 FIFA World Cup , hoteliers in and around Tokyo are making last-minute efforts to get their slice of the hoopla that will carry on through the next month.

Some major hotels in Tokyo are looking to secure big profits in June with few vacancies thanks to a huge number of visitors coming for the event co-hosted by Japan and South Korea.

However, some other hotels, particularly in Yokohama, where the final and three first-round matches will be held, have been struggling to make up for massive cancellations of bookings for June - many of which came just a month ago by a British firm that had booked large blocks of rooms for the event but saw its customers opting instead to relocate to South Korea.

Some hotels hit with cancellations have successfully minimized the damage through ad campaigns, sales promotions and hard work over the past weeks.

The Yokohama Grand Inter-Continental Hotel will provide a special plan in June called "The Eleven," which offers discount rates starting at Yen 11,000 overnight per person for double or triple "superior" rooms. The normal double-occupancy room rate is Yen 38,000.

The hotel's new Sports Bar will be open through July 7.

Staff sport soccer outfits to create a World Cup atmosphere. Decorated with replicas of the Japanese national team's uniforms and an official World Cup ball, the bar offers original cocktails associated with sports as well as Internet access so visitors can keep up with breaking soccer news.

The hotel has sent its sales staff to client firms and individual customers to inform them of guest rooms available during the World Cup, while also utilizing the Internet to attract more people, said Masumi Inoue, a public relations officer at the hotel.

"By around the Golden Week holidays in May, we were hit by cancellations of 45 percent of our room reservations for June," Inoue said. "Thanks to the staff's efforts, we're likely to make the occupancy rate around 85 percent, which is slightly better than an average year.

"In the business world, things do not always go as we plan, particularly when it comes to dealing with global events like the World Cup."

Yokohama Bay Sheraton Hotel & Towers has also been offering, for 15 specific days between May 19 and June 20, specially priced plans. Ten twin rooms, which usually cost Yen 33,000, are available for Yen 8,000 per person for a double room and Yen 6,500 per person for a triple room.

According to hoteliers, the massive cancellation of bookings in Yokohama and some other cities hosting the World Cup games came from Byrom Consultants Ltd., a U.K. liability firm engaged in coordinating accommodations for the 2002 World Cup as the FIFA World Cup Accommodation Bureau.

The hoteliers said the cancellations came after many groups of visitors, including members of the media, under contracts with Byrom decided to make their bases in South Korea, which boasts cheaper goods and services and a recently refurbished airport near Seoul, they said.

In Yokohama alone, some 60,000 rooms had been booked by Byrom for June. Now only about 20,000 are still booked; the rest were canceled as of the Golden Week holidays, according to an official of a major hotel in Yokohama.

The remaining reservations are concentrated mostly around the days when games will be played in Yokohama, the official said last week on condition of anonymity.

"About 80 percent of the bookings we had were canceled from March through April," the official said, adding that no cancellation fee was paid because it was more than a month before the booked dates.

"Business has already been badly damaged, and there won't be so much of an economic boom as has been hyped by the media and some business quarters."

In Tokyo, the situation appears rosier.

"We're expecting our three hotels - Takanawa Prince Hotel, New Takanawa Prince Hotel and Takanawa Prince Hotel Sakura Tower - to be 85 percent full on average through June, about 10 percentage points better than an average year," said Yuriko Kawashima, a public relations official for Takanawa Prince Hotel.

Better business prospects are attributed to the Sakura Tower being a licensed hotel under the auspices of the Federation Internationale de Football Association (FIFA), which organizes the games, with many FIFA officials and its sponsor companies planning to stay there.

During the World Cup, 2.26 million visitors from in and outside Japan will be put up at accommodations facilities nationwide, according to a forecast issued last month by the Land, Transport and Infrastructure Ministry.

More than 3 million people are expected to travel long-distance through the country during the tournament, it said.

The ripple economic effect brought on by the massive influx of visitors will amount to some Yen 369 billion, according to Dai-ichi Life Research Institute Inc.

Direct expenditures for the event will reach Yen 233 billion, with expenses for accommodations accounting for Yen 47 billion and that for transportation Yen 46 billion, the think tank said.

Local hotel and transport businesses have expressed mixed feelings about the event - half eagerly anticipating the boom in the number of travelers and half having no idea about how to cope with the unpredictable flows of visitors.

Nikko Salomon Smith Barney has meanwhile come up with a gloomy outlook.

In its annual forecast report, titled "The Japanese Surprises for 2002," released in late January, the brokerage predicted: "The World Cup descends into farce and off-pitch hooliganism. ... Economic benefits are dismally small."

APRIL BETTER FOR UK HOTELS BUT STILL NOTHING TO SHOUT ABOUT

e-Tid.com   -  Preliminary figures from consultancy firm PKF show that London hotel occupancy rates during April reached 71.3%, just 1% below 2001 levels, while regional properties saw no change year-on-year at 68.9%.
Average London revenue per available room (revPAR) was £73.64, a 6.1% decrease from April 2001. Average daily room rate per occupied room was down 5.2% at £103.31, a vast improvement on the 13.5% year-on-year decline seen in March.
Regional hotels’ average April room rate increased by 3.4% over last year to £63.53, the first improvement since September 2001.
Melvin Gold, MD of PKF’s hotel consultancy services, said: ‘Whilst this isn’t news to shout from the rooftops, hoteliers will be relieved to see some upturn after a disappointing few months.
‘If you look at the March and April figures together, there is both clear evidence of the long haul back from the dark days of 11 September and reassurance that other factors, such as the early Easter, are not having an excessive impact on the resurgence.’

CEO OF GRAND HOTEL VICTORIA-JUNGFRAU TALKS ABOUT COMPANY’S POSITION IN LUXURY SPACE

Interview with Emanuel Berger, Grand Hotel Victoria-Jungfrau 

EMANUEL BERGER is Chief Executive Officer of Grand Hotel Victoria-Jungfrau

TWST: Can we start with an overview of Victoria-Jungfrau ( :VIJZn.S) and a brief historical sketch?

Mr. Berger: Victoria-Jungfrau was once two separate hotels – The Victoria and The Jungfrau. The Victoria was built in 1864 with the idea of receiving Queen Victoria of England, the dominating lady of the century. The Jungfrau was built two years later in 1866. And in 1895 the two hotels came together and the corporation was founded. So since 1899 we have been one organization, one company. In 1997, we acquired the Palace Luzern and they are now a member of the company and under our management. The Victoria-Jungfrau had been built as a resort hotel and was only open in the summer time. But in 1991 we made the decision to stay open 12-months of years so we did a significant amount of work on the hotel to make it a year round luxury destination hotel.

TWST: Can you draw a profile of the Victoria-Jungfrau clientele?

Mr. Berger: We have four market segments. The individual guest represents the majority with roughly 48%. We have around 28% meetings, conventions, seminars, product presentations and so on. We’ve a little bit below 10% group travel and around 10% incentive travel. Nationality-wise, the home market, Switzerland, is strongest with close to 40%. Around 20% is the North American market. And Germany and Great Britain represent around 10%. Then, we have the rest of the world market with Japan providing about 5% of this market. We have quite an international clientele. The location of Interlaken is surrounded with possibilities for excursions in the summer as well as the wintertime, with the mountains and the lakes; it’s a little paradise in the heart of Switzerland.

TWST: How do you present and market the hotel to the potential guest?

Mr. Berger: Different markets have to be approached differently. So, for the incentive market, which is the North American market with the most potential, we have a sales office in Chicago. For the meeting and convention business the most important thing is to offer an excellent product, which means professional meeting rooms with all the latest technical equipment along with providing the quiet spaces to be able to work in that atmosphere. And of course for the individual it’s through the channels of Leading Hotels of the World, which we were a charter member of, or the Swiss Organization, Swiss Deluxe Hotels. We position ourselves as a hotel that offers the highest standards of services.

TWST: How has the past 12 months been for the Hotel, given the slowdown in the economy and of course September 11th?

Mr. Berger: Up to 9/11, we were on the road for producing a better year. The year 2001 had been exceptional and we were close to bypassing 2000 by far. Of course there was the circumstances of September, but for Switzerland you have to also keep in mind other events such as the grounding of Swiss Air, the accident in Zug. (there was an attack on a local parliament). So, there were a number of factors that you have to bear in mind and tourism needs stable, secure circumstances to develop. After 9/11 that was in question and that wiped out all reservations we had in our book so far. But the interesting thing is it is not only the North American visitors who visit Switzerland, it’s also the Europeans for instance who visit North America. We have been able to recoup lots of European meetings, European presentations, Swiss conferences and so on, and for the month of October, November and December we were again on track. So we only had the loss of the half of September and the year 2001 finished with a little bit higher turnover than the year before.

TWST: What about looking forward? What is your assessment for 2002?

Mr. Berger: I am confident for the prospects for 2002 and the future. The last two months have been excellent for us. We just concluded February, which is by far above last year. I think things will settle down. We have to keep a high value for the money that a client is spending for all markets, for meetings as well for individuals. Of course, the individual who is paying his own bill is the most demanding one and wants the cherished return for what he pays. We are confident for the future.

TWST: What’s on the agenda? Can you provide a summary of your business strategy for the next 12, 24 months?

Mr. Berger: Our strategy goes by opportunity. So it’s not a firm strategy of acquisitions. If an opportunity arises that is absolutely appealing and fits our two hotels then we would be ready.

TWST: If I were an investor how would you recommend I gauge the company’s progress? What are some of the key milestones that I should look for?

Mr. Berger: What made us successful in the past will be the road we follow for the future. If I look back over the past years at Victoria-Jungfrau, and what has made us successful, it is the spa; it’s the rich variety of different restaurants we offer; the extremely large and comfortable luxury rooms, which have almost double the size of a Holiday Inn room in comparison. We have luxurious and larger than average bathrooms. And, as I said before, we are here in an absolutely wonderful area. I think we give a high value for the price the client is paying. Now the success of our spa has been so overwhelming in the past that we have requested building permission to add an addition to this spa. It’s a $10 million investment to extend this spa with additional treatments, therapies and so on. We will have spa “guest rooms” also, so we will have more room accommodations. The accommodations will go up from 212 rooms to 222 rooms. And this is where we see an increase and an improvement of our services.

TWST: Are you successful in also retaining the customer, whether it be a corporate event returning to the hotel year-after-year, or an individual guest?

Mr. Berger: The repeat client in the meeting and the individual area is the key to our success. And, it is one of our goals that whatever we do should not only meet the clients’ expectations but should exceed it from stay to stay. That’s the value of the company. Many happy clients are coming back year-after-year.

TWST: Where would you see most of the capital expenditure going over the next year or so?

Mr. Berger: You have to bear in mind the Victoria-Jungfrau -- not the Palace Hotel -- is dated in the era of the 1870s, but it is an absolutely up-to-date hotel. In the last twelve years, we have gone through furbishing and redecoration to the amount of close to a $100 million. So the product is up-to-date and we are now making improvements with the extension of the spa. This year we completed two new restaurants, La Pasteca where we serve Far Eastern and Italian pasta, and then a Swiss Brasserie and both places are having a tremendous success. But of course a hotel has to go on all the time. We have the strong advantage that we are not going out of fashion, so investments are always long-term investments and they hold for a longer time.

M&C TO TAKE 100 % REPUBLIC HOTELS

e-Tid.com   -   Millennium & Copthorne Hotels today announced it is to make an unconditional cash offer to acquire the remaining shares that it does not already own in its subsidiary, Republic Hotels and Resorts (RHR).

M&C currently holds 85% of RHR, which owns and operates hotels in Singapore, South Korea, Malaysia, Indonesia and the Philippines and is listed on the Singapore Exchange.

The offer per share will be Singapore $1.30 cash, a 43% premium on the last transacted share price of RHR, making the total cost to M&C of buying the outstanding 15% stake (75.5m shares) approximately £37.6m.
Commenting on the offer, M&C’s finance director, David Thomas, said: ‘The group acquired 68% of the issued share capital of RHR in June 1999 and increased its effective interest by 7% in July 1999 and 10% in April 2000. This move represents a logical strategic step to integrate RHR more full within the group.’

M&C anticipates the offer will close by August 2002 at the latest.