FAIRFIELD, NJ— Working to enhance brand awareness, Prime Hospitality Corp. on September 1 will launch a combined guest loyalty program for its two proprietary brands: AmeriSuites and Wellesley Inns & Suites. Prime currently has two separate programs for the brands: AmeriSuites Club and a Wellesley Club. “They’ve been pretty basic,” according to Prime CFO Douglas Vicari. “It’s currently a free room night after 12 stays and American Express gift certificates for frequent travel. We’re combining the programs and now associating our brands with airline companies.” Prime has signed agreements with American Airlines and Delta Airlines, and is currently working with Continental Airlines and USAir. “The loyalty/frequency program we’re rolling out in September is going to be competitive with our competition— Hilton, Marriott, Starwood. We’re going to be providing points in our system for room nights and for other benefits, as well as airline miles. So on the first, people in our system will be double dipping, much like Hilton is doing with its HHonors program,” said Vicari. The venture is part of an estimated $8 million-$10 million marketing budget [including barter]in place this year to create greater brand awareness. “This year we’ve spent considerable dollars on a couple of things. With the critical mass we now have with AmeriSuites and Wellesley— with over 200 hotels open and operating— we’ve got a significant marketing budget.” Vicari noted when the chains were smaller the company focused on print advertising, primarily through USAToday. “Now, with the development of the brands and the critical mass we have, we’ve moved to television advertising for AmeriSuites, with national cable channels the focus. We’ve also moved to national radio with Wellesley Inns & Suites.” According to Jeff Williams, svp/franchise sales, the brands are gaining in recognition. For example, Wellesley currently has 7,500 rooms open, of which 45% are suites. “With the suite situation, we can really compete in markets with some of the other brands that only have 8%-10% of their rooms as suites. So, we really think we have a price/value story to tell, particularly with all the Homegate products we converted. With 450 square feet, they’re actually a heck of a lot larger than our AmeriSuites brand or any other brand,” he claimed. At 134 properties AmeriSuites is running about 68%-70% occupancy with an $82 ADR and RevPAR in the $50s. Wellesley Inns & Suites, at 72 properties, runs about 72%-73% occupancy and $60-$62 ADR, and a high-$40s RevPAR, said Williams. Prime also owns and manages some 40-50 non-proprietary brands it has under franchising agreements in its portfolio of full-service and limited service hotels. Last year, Prime saw total revenues of $560 million; however, expectations for this year range between $530 million and $540 million. The reason in the drop is two-fold, said Vicari. “We’ve been selling properties as part of our strategy to diversify the company and also what’s been happening in the marketplace with business travel. We’re down about 4.5% in the second quarter on the top line, so that’s also having a little bit of an impact on the overall revenues of the company.” Because Prime product is primarily transient business travel, Vicari only looked out two months regarding second-half performance, saying he expected it to shape up like the first half. “There’s no reason for me to predict a recovery right now for the fourth quarter,” he said. “This will be a year where we’re probably going to see RevPAR for the industry down in the second half comparable to second quarter, maybe between 4%-5%. It is what it is. We’re going to have to operate our businesses and do the best we can in this environment and hope that there’s a spike in business travel as we get out to the end of the year.”
