Home | Business News | Browse by Publication | B | Business Travel News

Loews holds upper upscale title, as tier reinvests.

Article Excerpt
Brands among the upper upscale tier enjoyed hearty returns in 2005, allowing them to reinvest much of their earnings back into their properties for facility upgrades while steadfastly adhering to the refrain that excellent service is what keeps guests coming back.

Loews Hotels retained its hold atop the upper upscale category in the U.S. Hotel Chain Survey, staving off JW Marriott in second and Starwood's W Hotels and Westin brands, which tied for third.

The momentum gained in the hotel industry in 2004 that spilled into 2005 was in no small way predicated on the performance of the upper upscale tier. According to Smith Travel Research, the upper upscale occupancy rate checked in at 70.8 percent for 2005, highest among all the tiers. This, combined with an aver age daily rate of $140--a 6.7 percent increase over 2004--led to a 9.4 percent increase in revenue per available room.

The steady rise in demand within the upper upscale tier, intersecting with escalating average daily rates, has produced even more capital for hoteliers who aren't hesitant to reinvest their profits to better their brand. "With the kind of growth in room rates leading to higher profits, hotels will put more money into upgrading their facilities," said Sean Hennessey, CEO of Lodging Investment Advisors, a firm that offers counseling services to investors and other key players in the hotel industry. "It should flow through to the business travelers of the world, who will see a substantial improvement in the value that they get," he said, adding that meetings business specifically would improve as a result.

Loews continued to thrive as a single-brand hotelier, despite its multi-brand competition. "There have been a number of hotels that have gone through renovations in 2005, including Loews Annapolis, Loews Ventana Canyon Resort in Tucson, Ariz., and Loews Coronado Bay Resort in San Diego," said Loews Hotels president Jack Adler. "In addition, we continue to reinvest the appropriate amount of capital in the balance of our hotels."

Loews' victory is its second consecutive in the category, while Westin and JW Marriott finished second and third last year, respectively. Making a surprising move was W Hotels, which finished...

View this article FREE - Now for a Limited Time, try Goliath Business News
Free for 3 Days!