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Consider Hotel Space To Impress Your Small Business Clients

[ 0 ] Jan. 7, 2013 | SBO Editor

When New York’s Hyatt 48 Lex recently offered club memberships to nonguests who could use the hotel’s lounge, boardrooms and other public facilities for a monthly fee, management probably didn’t expect one of the hotel’s boardrooms to double as a fashion runway. But this is Manhattan.

“One of our members is a bridal dress designer,” said Deirdre Yack, Hyatt 48 Lex’s director of sales and marketing. “She’ll call the day before and say, ‘I’m bringing two models over. Do you have a boardroom I can use so I can impress the client?'”

A club that doubles as a hotel is nothing new. University, athletic and other clubs offer accommodations as well as hotel-like amenities and services. But a hotel that doubles as a club? It’s a rare creature, and Hyatt 48 Lex, an 11-month-old property in midtown Manhattan, is aiming to make it work.

The 116-room hotel has introduced the Lex Club, which affords members use of the second floor of the hotel, including its Lexicon Lounge and four boardrooms. Members enjoy all the benefits of a hotel stay, with private concierge, access to the fitness center and the room service menu from the hotel’s restaurant.

Other perks include complimentary coffee, tea and snacks throughout the day, free WiFi, a flat $450 meetings room rental fee per day and free use of the hotel’s four boardrooms for up to two people for an hour.

The Hyatt 48 Lex, which also gives 10% discounts on rooms to members, charges $500 for the annual membership fee and says it will limit memberships to 50 during the first year of the program.

“We pride ourselves on being a unique and fresh concept,” said Yack, who added that hotel owner Hersha Hospitality Trust pointed the property toward a residential-type pied-a-terre design with an exclusive, club-like feel. “Everything about the hotel’s design and positioning is different.”

Hotel staff members were hired as much for their personalities as for their hotel experience, enabling a broader range of employees to be able to double as concierges.

A few months after the hotel opened last October, Hersha approached management about expanding the property’s revenue-producing opportunities by marketing the club-membership concept to the consultants, advertising professionals and other businesses nearby. Yack, who added that the concept has also been advertised to frequent guests, said many of the local businesses are too small to have meetings rooms of their own.

“Members bring their laptops and have access to all the technology,” said Yack, adding that each boardroom can accommodate as many as 16 people. “And the penthouse suites, which are available at very discounted rates to members, can also be used in a way similar to the boardrooms.”

The Hyatt 48 Lex’s efforts reflect a slice of a $135 billion U.S. hotel industry that’s trying to make the most of its revenue opportunities amid the challenge of getting room rates back up to their pre-Great Recession levels.

While the average U.S. room rate of $101.70 in 2011 marked a 3.7% increase from a year earlier, it was still about 5% less than the 2008 peak of $107.40, according to the American Hotel & Lodging Association (AH&LA).

And nonroom hotel revenue has fallen even faster, according to research firm PKF Hospitality Research. While 2011 room revenue was about 8% below 2008 peaks, last year’s food and beverage revenue at hotels was 11% lower than in 2008, while revenue from facilities rental and other sources had plunged 20%.

With that in mind, hotels are being more aggressive about finding ways to generate additional revenue amid the travel-spending rebound.
For instance, this year, U.S. hoteliers will collect about $1.95 billion in surcharges, including general resort fees, in-room phone bills, bar charges and cancellation fees, New York University’s School of Continuing and Professional Studies said in a study released last month. That figure is up about 5% from last year and more than triple the $550 million collected a decade ago.

In the meantime, other hoteliers have joined the Hyatt Lex 48 in looking into club-concierge type services to boost sales.

Starwood Hotels & Resorts’ upper-upscale Westin brand earlier this year introduced Westin Hive, which offers high-tech, flexible spaces designed for short-term use for small, impromptu meetings.

For $50 to $100 an hour, clients get a room for up to four people. The rooms are wired and feature WiFi access, TVs, printers, sound systems and Xbox 360 consoles for games or DVDs. Floor-to-ceiling white boards, office supplies, soft drinks and snacks are also provided.

“Traditional business centers were just not cutting it anymore,” said Dave Marr, Starwood’s senior vice president of brand management for North America. “Travelers needed something more functional and wired for technology.”

Guests “may now be using the lobby, a guestroom or a Starbucks, but many said it would really improve their experience if we could enable them to reach their objectives when they’re on the road — and if we could offer them facilities when they really needed them,” Marr said.

Westin Hive is available at the Westin Boston Waterfront and the Westin Arlington Gateway Hotel in Virginia. Westin is looking to offer the concept to as many as 50 hotels by year end, Marr said.

And Westin is not alone. A company called LiquidSpace serves as a distribution system for Westin Hive and other spaces available on short notice.

According to that company, 19 other hotels use LiquidSpace’s system to offer impromptu meetings space, ranging from lounges and conference rooms at luxury hotels to breakfast rooms at roadside inns.

As for the Hyatt Lex 48, the hotel has not yet reached its first-year goal of 50 members, but so far members have been responsive to the idea of being able to call as little as a day in advance to book meetings spaces, Yack said.

“This is not a big revenue producer, but more a way to be in touch with the neighborhood,” Yack said.

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Category: Features