The Amenity Sprint
Forget amenity creep — that time years ago when hotel chains would agonize for months on whether to require their owners and franchisees to add a five-cent bottle of shampoo or a dollar-per-guest coffee-and-donut continental breakfast to their lists of brand standards.
Today, it's an amenity sprint, as chains rush headlong into mandating $1,000 flat-screen TVs, $1,500 bedding sets and free high-speed Internet access. As this cycle accelerates — and surely it will as long as the hotel business continues to be strong — the questions are who will pay for it all, and will hotel owners see any return on these substantial investments.
Some may blame Barry Sternlicht, Starwood Hotels' founder and today its chief design officer, for bringing this pervasive and expensive trend to the marketplace. More than five years ago, his epiphany on what guests truly value in a hotel room — a good night's sleep — led to development of the Heavenly Bed, the Heavenly Bath and ultimately what became the great hotel bed wars that continue today.
Actually, Sternlicht did what every great corporate leader should do: look outside the norms of the industry to develop product differentiations so clear and so simple they vault a company to the head of its competitive class virtually overnight. The fault for amenity sprint lies, at least in part, with the executives of the other industry companies who followed Barry like sheep without much original thought of their own. This me-too-ism in the industry's boardrooms only served to negate some of Starwood's competitive advantage while adding to the CapEx bill for most owners of branded hotel properties.
Further blame must be shared by hotel owners, their lenders and their operators. These people and corporations have massive investments in their real estate and operating businesses, yet allow their franchisors and brand companies to tell them how they must spend their money.
It's true that contractual management and franchise agreements make it difficult for owners to do much besides whine to chain leaders and then pull out their checkbooks to pay for the mandated improvements. But the dangers of amenity sprint are a perfect cause for the Asian American Hotel Owners Association to embrace. After all, AAHOA was able to change the face of franchising in the 1990s with its ongoing pressure on chains to adopt its 12 principles of fair franchising. While not all chains bowed to the pressure and none adopted all of the principles, AAHOA must be credited for prompting sweeping changes in the hotel franchise landscape.
With that fight mostly won, it's time for AAHOA to battle against amenity proliferation. And think again it you don't believe AAHOA has the clout. Last month's annual meeting of the 8,700-member group was a compelling if surreal example of the influence and importance the association has in the hotel industry and in economic and political events both here and in India, the ancestral home of most members.
Neither the threat of protests, pressure from the U.S. State Department nor the pull out of a half-dozen major exhibitors from the convention could force the group to rescind an invitation to a controversial Indian politician to speak to the meeting. (Since the State Department ultimately refused to issue him a visa, the politico had to deliver his address via satellite hook-up.)
Further details of the controversy aren't very relevant; what is important, however, is that AAHOA — unlike any other hotel industry association in the U.S. — has the power to go toe to toe with both the federal government and the largest companies in the business. It also has the clout and moxie to slow to a crawl the race for amenity superiority.
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