NEW YORK— Global membership organization World Hotels has been expanding its reach into the U.S., providing a haven for hotel owners who have dropped their brand affiliations. Tom Griffiths, vp/The Americas for World Hotels, who has been tasked with growing the region, said ironically, one of the ways the organization is appealing to these owners is to model its services platform to be almost the equivalent of what a franchisor might offer. “The services we offer are modeled after the Carlson, Starwood, Marriott and Hilton groups, without the high costs of franchise affiliation,” said Griffiths. The 500-member organization, which provides independent hotels and resorts with sales, marketing and reservations services, currently counts 48 U.S. properties and one Puerto Rico hotel in its portfolio. Thus far this year it has added 50 hotels globally, with 18 in the Americas. In the U.S., new members signed up from Bloomington, MN; Burr Ridge, IL; Rapid City, SD; Las Vegas, NV: Palm Springs, CA: Orlando, FL; and Baltimore, MD. Nine Boutique Hotels of Mexico and two Canadian properties also joined. In South America, there is one member each in Argentina, Chile, Colombia, Uruguay and Venezuela. Griffiths said about half the U.S. properties the consortium will bring in this year are former flag-affiliated hotels. “A Ramada Plaza, a Radisson, a Park Plaza, a Le Méridien and others all have decided in their markets they can compete just as effectively as an independent with our level of sales and marketing as they otherwise could with a franchise affiliation and paying two to three times more.” Among those are: Graves 601 Hotel Minneapolis; Regency Lodge, Omaha, NB.; Essex House Hotel and Convention Center, Lancaster, CA.; Normandie Hotel, San Juan, PR; Bella Oasis Spa, Homosassa Springs, FL; Le Bourget, Bloomington, MN; Oaks Hotel and Conference Center, Burr Ridge, IL; Gateway Hotel, Rapid City, SD; and two in Canada— The Marlborough, Winnipeg, Manitoba, and The Burntwood Hotel in Thompson. According to Griffiths, The Americas services platform was “reinvented” about two years ago. “It was languishing, there was anemic revenue growth, there were structures not necessarily complementing each other within the organization…everybody was siloed and everybody was playing turf battles. What I tried to do when I came into the organization was to align the sales skills, and to redeploy the salespeople where our customers were. And put our membership services people in the field where our hotel growth was going to be and was, so they could provide hands-on services and consultations to the hotels, and be sure we were adding hotels in markets where we had the ability to deliver customers. Our financial model is the more we produce, the more we get paid,” he said. Members pay 6.5% of produced sales; there are other fees for training programs, some marketing programs and similar service, “but not a significant amount,” said Griffiths. In contrast, if WH doesn’t deliver the level of business promised to the hotels, the hotel doesn’t pay the fees. “Our hotel organization carries the risk,” said Griffiths. The company originally was founded 35 years ago by Germany-based hotel firm Steigenberger. whose founder decided to centralize the company’s reservations processing through his own 50 hotels. By 2003, World Hotels was much larger than Steigenberger and in a leveraged buyout became a private company. Steigenberger now is World Hotel’s largest customer, said Griffiths. When Griffiths joined WH in 2002, his five-year plan was to obtain about 150 hotels and resorts; however, at the time about 90% of the portfolio was business hotels. Now balance has been achieved with the hotels at a 50:50 ratio business to leisure/resort, and he expects to be able to enter more markets. Future U.S. penetration will focus on Dallas, San Francisco, Denver, Atlanta, and Washington, D.C. “The areas of the country where we have the most success are primarily in gateway business markets— New York, Boston, Chicago— where the necessity to have a brand affiliation is not as great, perhaps, as it might be if you’re a roadside inn or in Orlando, for example,” he said. He sees equal growth in city center hotels, as well as resort destinations and secondary business centers, adding 80% of that inventory will be in the U.S. and Canada. He forecast 100 to 110 hotels in the U.S. would join WH in the next two years. He also sees significant interest from the condo-hotel resort market. “Owners and the managers of those projects are looking for guests who are less price sensitive and staying longer periods of time. With our international presence and our ability to solicit business from Asia and Europe coming to the States, the customer we deliver to those condo-hotel resort groups is paying more, staying longer and has a lower cost of service to the management of the property.” WH has several condo-hotels in Florida, including Ocean Sands, Pompano Beach; Savona Suites, Orlando, and the Solara Surfside in Miami. Those who join World Hotels get sales representation to the intermediary marketplace— meeting planners, travel agents, consortia, and electronic distribution channels such as on the Internet and GDS. There’s also marketing services, training, quality standards and reviews and reservations services on a 24/7 basis in 16 languages. “We open up new business opportunities for independent hotels,” said Griffiths. WH also has 16 airlines partners. There is a quality review of a property prior to being allowed to join, and there are three hotel standard tiers— comfort (e.g., limited service), first-class (3.5/4-star) and deluxe (luxury/boutique)— into which the property is categorized. A yearly, third-party quality review also is conducted. Griffiths noted in the global portfolio 20% are comfort class, 60% first class and 20% in deluxe. Griffiths considers as key competitors Preferred Hotels and Resorts and Leading Hotels of the World, even though these organizations concentrate on upper-upscale and luxury properties. “Leading ‘owns’ the luxury niche, and I think Preferred in the United States owns the four-star niche. World Hotels in the States and to a greater degree in Europe owns the three-plus, four-star niche. But we’re much bigger than Preferred,” he said.
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