Celebrating Forty Years of HOTELS Magazine: 2000s

By Staff -- Hotels, 8/1/2006

The World Is Flat: Globalization And The Internet

The 2000s have so far been years marked by big deals (like the reunification of Hilton) and major disasters (from 9/11 and SARS to tsunamis and hurricanes), making them a somewhat serious time in the hotel business. But all the while there’s still been time to have fun, with gaming growing across the globe and aging hotel brands getting hip to fresh design and new technology. Like the 1990s, the industry’s issues and its focus have changed with the cycles: consider the differences between the post-Sept. 11 recession era and today’s post-recovery boom. Perhaps most interesting, though, is that everything old is new again.

Take condo hotels as a prime example. Today’s darling of the development world, these projects are not a new concept—they were around in the ’70s and ’80s, and have long been present in markets like South America. But even as more and more condo hotels are planned and developed in markets like Miami, Las Vegas and Chicago, the industry can’t seem to get enough of this new old idea.

Another concept that’s been around but is being embraced anew is that of self-service. Remember the earliest kiosks? OK, maybe they weren’t so memorable, especially for your guests, who were largely uninterested. But the airlines have trained today’s guests well, and many are looking for this type of convenient technology that enables better service.

Speaking of technology, if anything, this decade will be remembered as the one in which the Internet completely changed the way hoteliers do business. The tough times in the wake of Sept. 11, 2001 led to the rise of deeply discounted rooms and the merchant model, and hoteliers’ subsequent loss of control of their inventory. Now the brands have fought back and employ teams of people to do previously nonexistent but now vital jobs, like distribution and channel management. Today, e-marketing—from search engine optimization to keyword buys—is a must for hoteliers, as is providing high-speed Internet access for guests. And how these things are done is becoming more important all the time.

To delve deeper into guest-facing amenities, spas have become a necessity in upscale urban hotels, and flat-screen televisions in guestrooms aren’t far behind. In terms of F&B, grab & go concepts abound for travelers in a hurry, while wine or martini bars cater to those looking to wind down at the end of the day. These offerings can be found from the United States to Dubai to China and everywhere in between, as globalization leaves no market behind. Operators based all over the world are looking to expand into new, fast-growing markets and key gateway cities in established areas. And in case geographic growth weren’t enough, there’s always demographic growth, as segmentation continues with the rise of upscale select-service and extendedstay, for example.

Having trouble keeping up? Changes are taking place faster than ever, with big names changing (Cendant is now Wyndham Worldwide) and brands continuing to be absorbed (Le Meridien by Starwood). Which deal will happen next? It’s anybody’s guess, as merger and acquisition activity shows no signs of slowing down in the near term. One thing is for sure: “If a hotel company is not dining, it is potentially another company’s dinner,” says Russell Kett, managing director, HVS International, London.

2000: MGM Grand acquires Mirage Resorts for US$6.4 billion in the largest corporate buyout in gaming history

2000: Timeshare is the hottest industry segment

2000: 3% of travel is booked online, according to the PhoCusWright Yearbook 1999

2000: Hilton unveils plans for the first luxury hotel in space

2001: Raffles buys Swissotel from SAirGroup; Hilton Group purchases Scandic Hotels

2001: Two Golden Arch Hotels (as in McDonald’s) open in Switzerland

2001: Bass PLC shareholders approve name change to Six Continents

2001: Energy surcharges frustrate guests in the U.S.

2001: September 11 terrorist attacks prompt industry downturn

2002: Euro becomes only legal tender in 12 European nations

2002: Rezidor SAS signs master franchise agreement with Carlson Hotels Worldwide to expand the Carlson brands in EMEA

2002: IP telephony arrives at the Sheraton Petaluma Hotel north of San Francisco

2002: Spas re-emerge as a healthy revenue stream; become key hotel feature

2002: Steve Wynn holds IPO and breaks ground on Wynn Las Vegas project

2003: Hilton considers whether to allocate loyalty points for rooms booked through third-party Internet consolidators

2003: Hotel bars emerge as trendy places to see and be seen for stylish locals

2003: Plasma and LCD flat-screen televisions begin showing up in high-end hotel guestrooms

2003: Six Continents becomes InterContinental Hotels Group

2003: SARS hits Asian market

2004: International Society of Hospitality Consultants’ No. 1 issue/challenge for the year is distribution/channel management

2004: “Dynamic packaging” becomes a marketing buzzword

2004: Dubai hailed as key up-and-coming market

2004: Shangri-La begins rapid expansion through management contracts

2004: Tsunami hits Southeast Asia hotel industry hard

2004-2005: Rash of hotel bombings are major concern

2005: MGM Mirage buys Mandalay Resort Group, making it the largest gaming company

2005: Entrance of luxury retail/fashion brands into hotel market

2005: Starwood acquires Le Meridien brand

2005: Select service heats up with introduction of Hotel Indigo, Cambria Suites, aloft, NYLO hotels and Hyatt Place

2005: Hurricanes Katrina and Wilma wreak havoc in North America

2005-2006: Many major deals and acquisitions led by Blackstone; trend is for big brands to go “asset lite”

2005-2006: Ultra luxury Waldorf=Astoria, Crillon brands announced

2006: Tapas-style tasting menus and small plates become popular in hotel restaurants and bars

2006: Hilton Hotels Corp. reunites with Hilton International

2006: Four Seasons Milan sells for more than US$2 million per key

2006: Cendant becomes Wyndham Worldwide

2006: Mideast pipeline overflowing with luxury hotels and new brands / concepts

2006: Japan re-emerges as key market; Vietnam is gaining steam

2006: Beijing booming in run-up to 2008 Olympics

Other events and themes of the 2000s:

• Rise of the open kitchen

• Celebrity chef restaurants continue to be a popular trend in major markets

• Boutique hotels boom with the rise of W brand

• Bedding a key focus after Heavenly Bed craze

• Spas become necessary component of certain hotels as customer demand grows

• Rise of electronic distribution & channel management in wake of merchant model with third-party sellers

• High-speed Internet access becomes a widespread and key amenity

• Condo hotels return as the latest development rage

• Globalization of the hotel industry intensifies

• Branding and brand management are key focuses as brand gurus fill CEO spots

• Trend of going asset-lite abounds as companies favor management contracts