BTN Europe presents an overview of business travel and MICE predictions for this year
Virtual Event - 25-26 May 2021
Virtual Event - 9 June 2021
Thursday 9th September, JW Marriott Grosvenor House
After Starwood's announcement that London is to get its first Aloft, ABTN speaks to Brian McGuinness global brand leader for Starwood's speciality select brands, including Four Points by Sheraton and Element, as well as the select service brand Aloft.
You hope to have the Aloft Excel in London open in time for the 2012 Olympics. Are the games the main driving force behind the hotel, and if so, what happens when they're over?
It'll be open late 2011, or early 2012, but certainly before the Olympics. It's our main emphasis, that's an absolute, but we'll always try to get it open as soon as possible.
I think relative to rate we'll have a little uplift because of the Olympic event. But after that, on average, we'll be somewhere around £150 per night when the occupancies are relative to the exhibitions that are going on at Excel. Plus I feel there's a fair amount of transient business that will be in that market. And yesterday, we took the Thames Clipper water taxi back from Excel to town, which was wonderful. So certainly we believe, on the weekends, the opportunity for leisure is certainly there as well.
You recently opened the Aloft Abu Dhabi next to the Abu Dhabi National Exhibitions Centre. Is there a relationship between you and ADNEC, which also owns Excel?
It's a partnership, absolutely. The Aloft Abu Dhabi opened about a year ago, performing very well, and our partners at Abu Dhabi National Exhibitions Company (ADNEC) are just wonderful. Subsequent to that, we ultimately signed this Excel deal with them and we're working together to open this hotel.
As you look at some of these big trade shows that move around the world, they [ADNEC] can cross-sell between London and Abu Dhabi, which is going to be very important for Excel.
Is the Aloft Brussels still on track for September? Will there be a soft launch?
We're still on track. It'll be open prior to September 1 but we'll use that time to do some talent training and to get the hotel all ready. It will open hard on September 1, or around there, but we'll do press tours before then so it can be seen in advance. That hotel gives us an amazing position to enter the European market, and it's certainly right on brand. We're really excited to see it come online.
You call Aloft a select service brand? Is it correct to place it somewhere between budget and four-star hotels?
That's a good analogy. Our position is that the next generation of traveller doesn't need valet parking. Quite frankly, in London, they most likely wouldn't be driving in anyway. Those types of ancillary services just aren't needed at this level. However, high design and good technology are critical, so that's our focus.
Aloft doesn't carry a star rating. Would you say that the traditional rating system is flawed?
Not necessarily flawed, I think it was designed for a specific time, and certainly we see challenges particularly in the States. A good example would be AAA, that's our auto club, and they do a lot of ratings. One of their measures was that you got an extra point if you had a TV in a cabinet. But ours is a flat screen on a wall. It couldn't be any better than a 42", high definition television, but that scored less because it wasn't in a cabinet.
So we actually took it upon ourselves to invite the rating companies in, and we had built model rooms in a warehouse and we walked them through it, and it was amazing how their perception changed. Ultimately they did change the scale, so you don't get points taken away for things like not having a TV in a cabinet.
How do you educate those people that look at Aloft and see that it doesn't have a star rating?
I think the star ratings are still important, but with social media these days, TripAdvisor and Facebook etc., people are getting better at articulating what their stay was like, and how much they enjoyed it. The Aloft brand typically gets four out of five stars on these types of sites.
So that has become more important, I believe, versus the star rating because you're actually getting real-world feedback from travellers versus a rating that's given out once a year. This is an ongoing dialogue with travellers about their hotel experiences, and we have seen that this is more of a driver when people are making the decision on which hotel to choose.
So is Aloft aimed at the generation that is au fait with the internet?
We look at this from a psychographic standpoint, not a demographic one. We take the notion of the 35-year-old with a wife and two kids and throw that out, and instead look to the psychographic, which is the early-adopter, the person with the iPad or the iPhone, the person that likes design and reading design magazines. The cutting edge.
But it's not an age thing, it's a mind set. My neighbour Jane is retired, she's in her 60s, she drives a new Volkswagen Bug and her boyfriend surfs. And that's new thinking. My parents decorated the house once in their life, and now my sister is always painting walls and changing furniture. So with the democratisation of design, the classic Emeco bar stool that was $3,000 you can now get at Ikea for $45. With the advent of the education of design to consumers, there's a lot of opportunity out there to really educate them and bring them to Aloft. It's forward thinking, it's design, it's technology, it's the early adopter - it's really that mindset that we're after.
How does the Aloft brand fall short of four stars?
I think it's room service and the lack of a mini bar in each room that differentiates us. Instead of a mini bar, we have a pantry in the lobby called the Grab and Go, where guests can buy juices and wines and take them up to their room, which come with a refrigerator. What we like about this, is it gives far more options than the typical mini bar which is one juice, one spirit with one tonic. The pantry is more like a small little store, so there are a lot more options.
Do you think room service and a mini bar are important these days?
I really don't. The ability to "grab it" is important. As a traveller, there are times when I might want a bottle of water, some juice or a power bar as I'm dashing to the airport or I'm arriving in late. I think the ability to have that, and with us having the store, is very important. Having it all in the guest room, not so much, because quite frankly what's in the mini bar is not often what I'm looking for. I'd rather have the selection.
Would you say that it's a little like the airline low cost model, which unbundles services?
Absolutely, you can select the services you want. So that's exactly right.
Talking about airlines, how did the ash crisis affect the Starwood group?
I think company-wide it was neutral for us. For those customers that ultimately had to extend their trips, they really did make the most of it. While we had some cancellations and some people had to extend, they actually went out and did things. They extended their vacations and had a good mindset. So with that in mind, there was a relatively neutral impact on business. It wasn't as tough on us as it would have seemed to be.
Starwood's diverse portfolio of different service level brands made it resilient during the ash crisis. But did it have any effect on yields at all?
No, not at all actually. It was also not an opportunity for us. We weren't opportunistic during that time, we maintained our rates. We didn't raise them because we knew people were stuck, it was the normal course of business for us, and that was important to us. For anyone stuck, we extended them at the rate they were already booked, so there was no maximising of yields.
Is it safe to call Aloft a specialist brand?
Yes, because it's a category killer, it is shaking up the select service market. It's challenging our competitors to go to the next step and to push the envelope if you will, and we'll have 50 hotels by the end of this year. And they're new builds, it takes 18 months to build them, so extremely impressive from both a developer standpoint and a customer one.
Are all Aloft hotels new builds?
We have one adaptive use, which is in Dallas. It was an old train station, and we did it purely to see what the model was like, and whether it could be done or not. It's quite beautiful, and we would do it again if we found the right building. When we looked at the opportunity we had at Docklands, other than new builds there are a lot of old warehouses and those types of facilities that could become really cool hotels. A lot of them have high ceilings, lots of natural light and free-form space, something we can really design into.
How many hotels are open under the Aloft brand? What's in your pipeline?
42 are open and operating. We'll have 50 by the end of the year, and there are roughly 50 additional signed deals. It floats around that number.
Do you think these select service brands are the future for hotels?
I think they are. Certainly there's a huge opportunity there for them. But the full-service brands will continue to grow, Sheraton has a very robust pipeline, and we're opening our W here in London, so there are still plenty of market opportunities.
For select brands there's a huge opportunity because the distribution isn't global yet. So when we look at China where we opened in Beijing, and India where we're soon to open three for Aloft, those emerging markets have huge potential. Purely in China considering the size of it, and India being an emerging economy.
You mention China and India. Are there any regions you find particular challenges in?
No particular challenges, yet.
The German market is certainly going to be big for us with huge opportunities. And we're starting to do deals down in Latin America, so that's looking very positive. The interesting thing is that we did launch Aloft globally, all at once, which is really different in our industry. Generally it starts in the states and you incubate it there for ten, 15, 20 years, and then you take it to the other divisions. But we opened all around the world at the same time, which is really interesting from a brand perspective.
And finally, any more plans for London?
Not to be revealed, yet. Stay tuned. What is it that Boris Johnson says? "In due course".