The likes of Starwood Hotels & Resorts
may be going in the other direction, but some of the moderately priced lodging brands are planning to bulk up their sales forces in an attempt to capture market share. Due to current economic woes, some corporate travel managers are cutting costs by downgrading the hotel properties within their programs--although how much depends on who you talk to.
Marriott CFO Arne Sorenson said Marriott did not observe trading down in brand tiers by corporate accounts during the December quarter--as many predicted would happen. He said full-service properties were "able to retain guest loyalty." On the other hand, executives with InterContinental Hotels--owner of budget brands Holiday Inn and Holiday Inn Express--Best Western International, and others are suggesting the recession offers an opportunity. [more]
During a conference call last week to discuss 2008 earnings, IHG CEO Andy Cosslett said the company isn't experiencing as much doom and gloom as the others in the industry because the depressed economy has created a "huge opportunity."
"We have shifted resources to those parts of the business that we know have the greatest short-term impact on revenues," he said. "So, for example, this means increasing budgets for our sales teams around the world who work with major corporate accounts. These large corporate accounts at the moment are using this moment to consolidate their hotel supplier base and they are most receptive right now to suppliers with strong positions in the mid-scale market."
Cosslett said that although negotiations are lasting a bit longer than usual, IHG already struck new agreements--with three or four of its largest accounts--in which those corporations are consolidating hotel programs by incorporating more IHG brands. Cosslett attributed much of the negotiating success to the relaunch of the Holiday Inn brand.
"It gives corporate travel managers a wonderful moment of opportunity to divert hard-pressed executives who are used to five-star hotels into something that is a bit more economical," Cosslett said.
Best Western also plans to increase its sales team and grow its marketing to garner additional corporate sales, according to senior vice president of marketing and sales Dorothy Dowling. "The mid-market is a very resilient space to occupy and even though the industry is experiencing some level of downturn ... we think we are poised to secure market share," said Dowling this month during a conference in New York. "We are getting more opportunity in terms of businesses inviting us into the request for proposals selection and process."