The sluggish economy and the trend toward more limited-service, value-oriented hotels has caused a slowing of growth in hotel foodservice sales.
After several years of steady and sometimes hefty sales increases—which had marked a reversal from the declines that followed the Sept. 11, 2001, terrorist attacks—the current cyclical slowdown was anticipated and reflected in daily room rates, experts say.
Smith Travel Research reported average daily rates rose 5.6 percent in 2007, compared with 2006, but that was a slowdown from the 5.9-percent growth in 2006 over 2005. The growth rate of revenue per available room, or RevPAR, also dropped from 5.7 percent to 5.1 percent, and total occupancy dropped from 63.2 percent to 62.9 percent, according to Smith Travel Research.
Audit firm PricewaterhouseCoopers LLC in May said it expects hotel occupancy and revenue growth to slow in the United States this year and the next. The firm forecast a 0.9-percent decline in hotel occupancy this year at domestic hotels, the first significant decrease since the Sept. 11 attacks, but expects a 4.6-percent increase in hotel room supply, with developers expected to build more than 260,000 rooms this year and the next.
Analysts see some relief in the form of inbound international travelers, who are seeking bargains with the weak U.S. dollar and their stronger currencies. Some experts say the weak dollar is bringing some foreign tourists here with empty suitcases just so they can shop.
While international business continues to be strong for most hoteliers, the U.S. economy is not a bright spot.
J.W. Marriott Jr., who recently spoke at the New York University International Hospitality Industry Investment Conference, said softer demand trends were affecting the U.S. market.
Marriott expects second-quarter North American RevPAR to grow about 2 percent, which was lower than the company’s earlier guidance of 3 percent to 5 percent. For the recently ended first quarter, Marriott’s RevPAR rose 4.4 percent across the chain’s worldwide properties, but was up just 2.3 percent in North America.
HOTEL CHAINS RANKED BY U.S. SYSTEMWIDE SALES
| LATEST-YEAR RANK | PREC.-YEAR RANK | CHAIN | FISCAL YEAR-END | |||
| LATEST | PRECEDING | PRIOR | ||||
| 1 | 1 | Marriott hotels, resorts & suites | Dec. ’07 | $1,266.0 | $1,216.5 | $1,200.5 |
| 2 | 2 | Hilton Hotels | Dec. ’07 | 1,180.0 | 1,100.0 | 1,050.0 |
| 3 | 3 | Sheraton Hotels | Dec. ’07 | 952.0 | 925.0 | 920.0 |
| 4 | 4 | Holiday Inn | Oct. ’07 | 714.0 | 680.0 | 665.0 |
| 5 | 5 | Radisson Hotels & Resorts | Dec. ’07 | 698.5 | 650.0 | 640.0 |
| 6 | 6 | Hyatt Hotels | Dec. ’07 | 569.2 | 537.0 | 535.0 |
| 7 | 7 | Ramada Inn | Dec. ’07 | 540.0 | 501.0 | 498.0 |
| TOTALS: | $5,919.7 | $5,609.5 | $5,508.5 | |||
HOTEL CHAINS RANKED BY GROWTH IN U.S. SYSTEMWIDE SALES (Year-to-year percentage change)
| LATEST-YEAR RANK | PREC.-YEAR RANK | CHAIN | FISCAL YEAR-END | LATEST* VS. PRECEDING | PRECEDING* VS. PRIOR |
| 1 | 5 | Ramada Inn | Dec. ’07 | 7.78 | 0.60 |
| 2 | 3 | Radisson Hotels & Resorts | Dec. ’07 | 7.46 | 1.56 |
| 3 | 1 | Hilton Hotels | Dec. ’07 | 7.27 | 4.76 |
| 4 | 7 | Hyatt Hotels | Dec. ’07 | 6.00 | 0.37 |
| 5 | 2 | Holiday Inn | Oct. ’07 | 5.00 | 2.26 |
| 6 | 4 | Marriott hotels, resorts & suites | Dec. ’07 | 4.07 | 1.33 |
| 7 | 6 | Sheraton Hotels | Dec. ’07 | 2.92 | 0.54 |
| AVERAGE: | 5.79 | 1.63 | |||
Marriott told the investment conference the company continues to see weak weekend leisure demand in the United States and is beginning to see softer midweek demand, with group business impacted by fewer last-minute bookings. Marriott also said he “would be surprised if North American RevPAR strengthened in the second half of the year.”
Many high-end hotels are outsourcing their restaurants in lease agreements to noted chefs, a trend that began a decade ago in Las Vegas and continues to spread across the United States. Chef Dean Fearing, for example, created a leased-venue space in Dallas’ Ritz-Carlton Hotel, which opened late in 2007.
But while luxurious hotels are seeking outside name chefs to run their food and beverage operations, the fast-growing budget segment of the hotel business is working to boost food and beverage sales with limited offerings.
Wyndham Hotels and Resorts of Parsippany, N.J., is introducing a new flexible cafe in some of its lobby areas. The combination cafe, coffee bar and food mart has been named ERL for “Eat. Refresh. Live.” ERL transforms from a coffee bar with breakfast service and snacks during the day into a cocktail bar featuring casual dining at night. Cafe locations currently include Wyndham hotels in Toronto; Columbus, Ohio; Atlanta; and St. Thomas in the U.S. Virgin Islands.
“With lobby spaces continuing to become more communal, the Wyndham Hotels and Resorts brand wanted to respond to guests with an innovative food and beverage concept,” says Evy Apostolatos, a Wyndham spokeswoman. The flexible-cafe lifestyle concept “allows travelers to have coffee, be wired or simply relax and lounge.”
Wyndham has also upgraded its coffees in the cafes and for room service by using Starbucks products and featuring a fair-trade blend. “This agreement combines great coffee with social responsibility,” says Fernando Salazar, Wyndham’s vice president of food and beverage. “As a hotel company with an increased emphasis on our own sustainable approach to doing business, it is important that Wyndham Hotels and Resorts choose partners who are aligned with our culture and core values.”
HOTEL CHAINS RANKED BY NUMBER OF U.S. UNITS
| LATEST-YEAR RANK | PREC.-YEAR RANK | CHAIN | FISCAL YEAR-END | |||
| LATEST | PRECEDING | PRIOR | ||||
| 1 | 1 | Holiday Inn | Oct. ’07 | 2,098 | 2,092 | 2,070 |
| 2 | 2 | Ramada Inn | Dec. ’07 | 835 | 828 | 823 |
| 3 | 3 | Marriott hotels, resorts & suites | Dec. ’07 | 343 | 325 | 322 |
| 4 | 4 | Radisson Hotels & Resorts | Dec. ’07 | 285 | 280 | 278 |
| 5 | 5 | Hilton Hotels | Dec. ’07 | 238 | 235 | 233 |
| 6 | 6 | Sheraton Hotels | Dec. ’07 | 200 | 197 | 196 |
| 7 | 7 | Hyatt Hotels | Dec. ’07 | 128 | 127 | 126 |
| TOTALS: | 4,127 | 4,084 | 4,048 | |||
HOTEL CHAINS RANKED BY GROWTH IN NUMBER OF U.S.UNITS (Year-to-year percentage change)
| LATEST-YEAR RANK | PREC.-YEAR RANK | CHAIN | FISCAL YEAR-END | LATEST* VS. PRECEDING | PRECEDING* VS. PRIOR |
| 1 | 2 | Marriott hotels, resorts & suites | Dec. ’07 | 5.54 | 0.93 |
| 2 | 5 | Radisson Hotels & Resorts | Dec. ’07 | 1.79 | 0.72 |
| 3 | 7 | Sheraton Hotels | Dec. ’07 | 1.52 | 0.51 |
| 4 | 3 | Hilton Hotels | Dec. ’07 | 1.28 | 0.86 |
| 5 | 6 | Ramada Inn | Dec. ’07 | 0.85 | 0.61 |
| 6 | 4 | Hyatt Hotels | Dec. ’07 | 0.79 | 0.79 |
| 7 | 1 | Holiday Inn | Oct. ’07 | 0.29 | 1.06 |
| AVERAGE: | 1.72 | 0.78 | |||
Other limited-service hotel concepts are working to expand food and beverage offerings as well as help in up-selling.
Four Points by Sheraton, the 130-outlet division of Starwood Hotels & Resorts Worldwide Inc. of White Plains, N.Y., last year began its “Best Brews” beverage program to complement its limited foodservice.
Each participating Four Points hotel provides a selection of local, regional and imported craft beers from the extensive list of almost 300 available brews in bottles and on tap. Participating properties offer a minimum of four draught beers and a selection of up to 20 bottled beers, including imports representing Belgium, Germany, England and the Czech Republic, as well as regional craft beers.
All hotel beer selections are broken down by style, character and body, so guests can identify the beer that appeals to them. Beer sampler “flights,” each with four 4-ounce pours of draught beer and story cards, make it easy to sample the best brews on tap while learning about the art of the pour.
To oversee the program, Four Points last year named Scott Kerkmans as the chain’s “chief beer officer.” In a marketing program this year, the chain had about 2,000 applicants for its first “Best Brews intern,” a coveted position that went to Dan Suarez. He will spend his summer working with Kerkmans on the beer program, which will include the development of in-hotel “happy hours.”
Sandy Swider, vice president of Four Points, says the search for a Best Brew intern was taken seriously. “Dan’s passion for food, beer and travel really struck a chord with our team,” she says. “His drive and excitement around learning more about the beer and hotel industry was very impressive.”
Marriott has unveiled a new version of its Courtyard by Marriott, the limited-service hotel aimed at the business traveler, at a property outside Washington, D.C.
A signature element of the new lobby is a Courtyard GoBoard, a 52-inch LCD touch screen. Guests can navigate using the touch screen to find restaurants, local attractions and directions. The lobby also offers free Wi-Fi connectivity and extra electrical outlets to power digital devices. An enlarged business library features several complimentary computer terminals along with a free printer and separate computer stations dedicated to printing airline boarding passes and checking flight status.
HOTEL CHAINS RANKED BY ESTIMATED SALES PER UNIT
| LATEST-YEAR RANK | PREC.-YEAR RANK | CHAIN | FISCAL YEAR-END | |||
| LATEST | PRECEDING | PRIOR | ||||
| 1 | 2 | Hilton Hotels | Dec. ’07 | $4,989.4 | $4,700.9 | $4,535.6 |
| 2 | 1 | Sheraton Hotels | Dec. ’07 | 4,796.0 | 4,707.4 | 4,670.1 |
| 3 | 3 | Hyatt Hotels | Dec. ’07 | 4,464.3 | 4,245.1 | 4,280.0 |
| 4 | 4 | Marriott hotels, resorts & suites | Dec. ’07 | 3,790.4 | 3,760.4 | 3,751.6 |
| 5 | 5 | Radisson Hotels & Resorts | Dec. ’07 | 2,472.6 | 2,329.7 | 2,340.0 |
| 6 | 6 | Ramada Inn | Dec. ’07 | 649.4 | 606.9 | 606.6 |
| 7 | 7 | Holiday Inn | Oct. ’07 | 340.8 | 326.8 | 321.7 |
| AVERAGE: | $3,071.8 | $2,953.9 | $2,929.4 | |||
HOTEL CHAINS RANKED BY TOP 100 MARKET SHARE (Percentage of aggregate sales of family chains in Top 100)
| LATEST-YEAR RANK | PREC.-YEAR RANK | CHAIN | FISCAL YEAR-END | |||
| LATEST | PRECEDING | PRIOR | ||||
| 1 | 1 | Marriott hotels, resorts & suites | Dec. ’07 | 21.39 | 21.69 | 21.79 |
| 2 | 2 | Hilton Hotels | Dec. ’07 | 19.93 | 19.61 | 19.06 |
| 3 | 3 | Sheraton Hotels | Dec. ’07 | 16.08 | 16.49 | 16.70 |
| 4 | 4 | Holiday Inn | Oct. ’07 | 12.06 | 12.12 | 12.07 |
| 5 | 5 | Radisson Hotels & Resorts | Dec. ’07 | 11.80 | 11.59 | 11.62 |
| 6 | 6 | Hyatt Hotels | Dec. ’07 | 9.62 | 9.57 | 9.71 |
| 7 | 7 | Ramada Inn | Dec. ’07 | 9.12 | 8.93 | 9.04 |
| TOTALS: | 100.00 | 100.00 | 100.00 | |||
While foodservice remains minimal, the revamped Courtyard’s dining areas have been redesigned with casual, flexible seating, easier access to food, more health-oriented menu options for breakfast and light evening fare, including snacks, wine and beer. The hotel’s retail shop, The Market, is open around the clock for snacks, beverages and sundries.
Marriott also borrowed a page from the playbook of higher-end hotels by offering a patio and fire pit so guests can get a beverage and snack and a breath of fresh air at the end of the day.
