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 Now is the Time for independent Hoteliers to Exploit
the Changing Market and Maximize their Advantage
Over the Global Chains; Hotel Market
Embracing Individuality

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New Terms Such as ‘Clustomer’ and ‘Amenity Creep’ Discussed

LONDON, August 2004 - Four keynote speakers set out the challenges and opportunities facing the independent hotel sector in a debate on ‘the spirit of independence’ that concluded the first ever Independent Hotel Forum (IHF) organized by The Independent Hotel Corporation (IndeCorp).  IndeCorp provides business systems and sales and marketing support to more than 300 luxury independent hotels in over 51 countries through its brands Preferred Hotels® & Resorts Worldwide, Summit Hotels & Resorts and Sterling Hotels & Resorts. 

The four-day forum, which ran from July 8 - 12, 2004, celebrated the spirit of the individual and the power of the collective. 

Moderated by Richard Lewis, Managing Director of Summit Hotels & Resorts, the panel event laid down the gauntlet for independent hoteliers to exploit the changing market and maximize their advantage over the global chains.  Panelists included John Ueberroth, Chairman and CEO of IndeCorp; Francis Green, General Manager of The Landmark London; Russell Kett, Managing Director of HVS International; and Peter Bates, Founder and President of Strategic Vision.

“BREAKING THE MOLD” - John Ueberroth – Chairman and CEO of IndeCorp, began by casting an historical eye on how the hotel sector had changed during his 30-year career. Establishing a theme that ran through all four speeches, he argued that since the 1990s, a “hunger for experience” had seized travelers, placing newfound pressures on hotels to provide something memorable and distinctive rather than standardised and formulaic.

“Now is the time for the independent hotel sector to flourish,” he said. “There is an overriding passion for individuality, authenticity and personality, rather than the safe, ‘cookie-cutter’ approach to hotel choices that proved so reassuring in the early days of leisure travel.

“The modern traveler wants to explore and experience new things and independent hotels have the flexibility to exploit this shift in attitude.”

“Of course, confidence in the quality and service of a hotel remains absolutely key to attracting guests.  This is why the associational brand power of belonging to a collection of like-minded properties such as Preferred, Summit or Sterling can help to reassure - and hence allow the individual to compete with the chains on a level playing field.”

Mr Ueberroth added that investors’ attitudes to the independent hotel sector had shifted too - from cagey scepticism, to a growing sense of confidence in the commercial attractiveness of individual properties.
 

“NEW MARKETING: THE ‘CLUSTOMER’” - Francis Green, general manager of The Landmark London, pointed out that the hotel market was experiencing a profound shift as new distribution channels emerge.

“Market segments are dead,” he said. “Customers themselves have become more independent as the Internet leads to a proliferation of distribution channels. It means that the customer is now in complete control. 

“They also have greater confidence in their own choices and are increasingly interested in travel, including their hotel experience, as an extension of their individual personalities and ambition.”
 


The Landmark London
222 Marylebone Road
London,  NW1 6JQ
United Kingdom
Mr. Green pointed out that market segmentation was giving way to a new phenomenon - the ‘clustomer.’ The term sums up the more atomised, refined and exacting sub-markets that the hotels of the future will have to appeal to.

“The hotel market is rejecting commodity and embracing individuality en masse. It gives us a great opportunity and I personally feel there is the chance for the independent hotel sector to significantly cut into the chains’ market as a result.”

“INNOVATIONS AND EMERGING MARKETS” - Russell Kett, Managing Director of HVS International, explored the repercussions of the shift in customer taste. While the chains engage in what he termed “amenity creep,” the use of increasingly elaborate facilities and technologies to pull in guests, the independent hotel sector would be able to focus more successfully on softer parts of a hotel’s offering, that is charm, authenticity and the personal touch.

Mr. Kett also conjured up a range of hotels that could become commonplace in the future – from fully mobile “pod” hotels that can be dropped at any location, through to airship cruises, underwater resorts and even hotel space stations.

“While these suggestions may seem outlandish, the rise in the power of customer choice makes them a lot less far-fetched. What the customer dreams of, the hotelier must be ready to fulfill, and this is where the freedom and entrepreneurial spirit of the independent hotelier should come to the forefront. I expect them to be at the cusp of some surprising and fabulous innovations in the next 25 years.”

Hoteliers also need to prepare the ground for new markets. Qatar and Brazil were two areas singled out as growth opportunities by Mr. Kett - while most attention should be focused on China, currently the world’s fifth most popular leisure destination, but likely to be first in the next 20 years as the Chinese economy continues to grow.

“TECHNOLOGY AND THE INDIVIDUAL” - Peter Bates, Founder and President of Strategic Vision, added that Russia and India were two key regions where tourism spend was set to increase markedly and that a renewed marketing effort to reach consumers in these countries was overdue.

According to Mr. Bates, bespoke services tailored to suit the individual whims and passions of guests would be at the forefront of the ‘hotel of the future.’ Customers longed for one-of-a-kind experiences, and the hotel will need to adopt increasingly flexible working practices to meet these individual demands.

Outsourcing of services provides the ideal solution, offering independent hoteliers a way of bringing in expertise, specialist services and external brand recognition, while keeping costs and exposure to risk down. 

“The possibilities for outsourcing hotel functions are endless - from facilities like bars, restaurants and spas, through to core services such as the concierge,” Mr. Bates said. 

“As long as the cost models and service levels are well established, it should be a powerful tool to create a compelling, personalized service.”

Technology, and how it can enhance and personalize the guest experience was the other powerful theme of Mr Bates’ vision of the 21st century independent hotel.  Iris-scanning and smart card technology will soon be commonplace, with the latter offering the chance for guests to personalise every aspect of their room setting ahead of arrival.

Robotics, meanwhile, will allow core maintenance functions to become seamless and unobtrusive; nanotechnology could potentially transform the appearance of hotels as the size of electronics shrinks; and wireless connectivity throughout a hotel will become as basic a prerequisite as en suite facilities.

For the business guest, physical attendance at conferencing could be replaced by hologram conferencing - massively reducing the travel and cost implications.
“The caveat, however, is that the hotel guest’s first passion will still be for personal service and the human touch,” Mr. Bates stressed. 

“The independent hotel sector has the charisma and entrepreneurial spirit to be the gatekeepers of this golden age of technological advance. However, they will need to manage this subtle but all important balance between the cool efficiency of automated technology, and the authenticity and charm of outstanding personal service – which is, and will always remain, their key strength.”

Brief biographies of speakers:

John A Ueberroth, Chairman and CEO of IndeCorp. John joined and invested in IndeCorp in March 2004.  He has more than 30 years of executive level experience in the travel industry, ranging from global travel agencies and travel service companies to an airline and major industry associations.

Francis Green, General Manager of The Landmark London.  Under Francis’ stewardship, The Landmark London is one of the world’s most acclaimed luxury hotels and was named London’s Hotel of the Year in 2003.

Russell Kett, Managing Director of HVS International.  With more than 25 years specialist hotel consultancy experience, Russell has a key role with HVS - a global consulting and services organisation focused on the hotel, restaurant, timeshare, gaming, and leisure industries.

Peter Bates, Founder & President of Strategic Vision, a consultancy providing marketing, sales and PR to the travel, leisure and luxury industries. Peter’s career has spanned Cunard Line, Thistle Hotels, Mandarin Oriental and the Savoy Group of Hotels.

Richard Lewis, Managing Director of Summit Hotels & Resorts. During 25 years in the leisure industry, Richard has held senior management roles in a number of high profile companies including Forte Hotels, Le Meridien and Turner Broadcasting.  He also has day-to-day experience of running hotels having worked in properties in Abu Dhabi, Jordan and London.

The Independent Hotel Corporation (IndeCorp) provides independent hotels and resorts with expert business consultancy and key services such as sales, marketing, distribution, reservations and revenue management services. Its goal is to forge lasting partnerships with independent hoteliers, preserving and celebrating the individuality and personality of their hotels. It works with them to establish innovative and cost effective strategies that offer a competitive edge against the chains in the global marketplace.  IndeCorp employs 94 employees in twelve countries. 
Headquartered in Chicago, IndeCorp services more than 300 distinctive luxury independent hotels and resorts in 51 countries through its brands: Preferred Hotels & Resorts Worldwide (www.preferredhotels.com; GDS Code: PH), Summit Hotels & Resorts (www.summithotels.com; GDS Code XR) and Sterling Hotels & Resorts (www.sterlinghotels.com; GDS Code: WR). IndeCorp’s website is www.indecorp.net.


 
Contact:
The Independent Hotel Corporation (IndeCorp)
www.indecorp.net
Also See: John A. Ueberroth Signs an Agreement to Become the Largest Shareholder, Chairman of the Board and CEO of The Independent Hotel Corporation, IndeCorp. / March 2004
Preferred Hotels & Resorts Board Chairman, Bill Otto, Discusses Past, Present and Future of the Organization / May 2003
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