HB ON THE SCENE: Executives Discuss Ways To Hold, Gain Market Share

Posted 11/8/2009 - 4:19:03 PM

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NEW YORK—Top executives within the hotel industry discussed some of their strategies for seeing their hotels through the downturn during the International Hotel/Motel & Restaurant Show taking place at the Jacob K. Javits Convention Center, here. Participating in the session, titled “Grabbing More Market Share,” were Greg Champion, COO, Benchmark Hospitality International; Gerry Chase, president/COO, New Castle Hotels & Resorts; Doug Dreher, president/CEO, The Hotel Group and Robert Habeeb, president, First Hospitality Group. The discussion was moderated by Chris Ostrowski, managing editor, Hotel Business®.

From the start, the panelists did not mince words when commenting on how difficult the recession has been for their companies and their hotel properties. “This is a rough year. It’s definitely not going to be one to remember,” said Habeeb.

“We’ve got a couple of properties that are being very challenged right now,” Chase added. “We’re hanging on until we can get to the other side.”

Dreher noted that although properties that have been fortunate enough to be recently renovated are in many cases faring better than most, the industry may not see the light at the end of the tunnel for some time. “We’ve done some large renovations and those properties are doing well. The select-service hotels are holding their own, but rates have dropped the most accutely in just the last few months,” he said. “I’m afraid the worst might not be here yet. It’s a day to day challenge.”

When it came to addressing how to best weather the downturn, the executives stressed the importance of leveraging the Internet, particularly online booking engines and social media. “There’s really been a paralysis of sales in some markets, they literally dried up overnight,” said Champion. “We’ve invested heavily in the online booking agencies to try to combat that. The really issue is how to get the first time customer in to a property to pick up their business. It’s a small price to pay to get them into your hotel.”

Although initially one may think the population of inexperienced hoteliers may actually put the more experienced ones on more solid footing in the recession, Habeeb stressed that is not always the case. “On one hand, inept competition allows you to get into their lunchbox and steal their candy so to speak. The flipside though is those are usually the ones who do a deep disecting of their rates, which is a bad way to gain market share because it forces everyone then to drive down their rates,” he said.

Chase agreed, saying, “Competitors without a clue are what crashes markets. You would always rather compete against the best and do what’s appropriate for business. Not what’s desperate.”

Undoubtedly, meeting business is one segment of business that has greatly fallen off during the downturn, particularly for higher-end hotels because of the so-called “AIG effect.” Champion recalled certain measures his company toook in an attempt to reclaim group business for one of its resort properties. “We had to take the word ‘resort’ off all our contracts and recreated collateral that didn’t show pictures of the golf course, spa and other amenities. We created our own niche…we even debated at one point changing the name of the property. We worked within the necessary parameters to get the business,” he said.