If there’s any constant among hoteliers, it’s their never-ending search for innovations that will lure guests and increase market share.
Toronto-based hotel developer Alnoor Gulamani, president of Bayview Hospitality Group, is no different, and that would explain his willingness to build his two newest hotels on the same property.
“There has been a fundamental shift in customer demand,” Mr. Gulamani says. “(The hotel industry) is really driven by the need of the customer, and we’re here to offer choice.”
Indeed, hotel chains are forever jockeying for an edge in a highly competitive and vulnerable market that is always in transition. As such, Mr. Gulamani is hoping that his new $31-million, 254-room dual-brand complex near Toronto’s Pearson International Airport will provide just such a competitive advantage.
The property, which opened in March, hosts two Hilton chain brands – Homewood Suites and Hampton Inn, both in separate towers and with separate lobbies. The former caters to the lucrative extended-stay business market, while the latter services more traditional travellers who opt for shorter stays. With about a $30 difference in price per night, the hotels share some staff, as well as a pool, meeting rooms and a fitness centre, all housed in a common building that links the two.
But when evaluating the dual-brand model – which major hotel chains across North America such as Hilton Worldwide, Marriott International and Starwood Hotels and Resorts began embracing in the late 1990s in an attempt to appeal to a broader customer market and generate cost efficiencies – the pressing question is whether this latest hotel innovation will prove viable in the long term.
Market demand and cost savings are more than enough to make the dual-brand model an industry fixture for the foreseeable future, says Monique Rosszell, the Toronto-based senior vice-president of hotel consulting firm HVS Global Hospitality Services.
“There’s a market need, and you’ve got economies of scale when you put two brands on one site,” Ms. Rosszell says. “It’s here to stay because it gives hotels a healthier bottom line.”
Indeed, Mr. Gulamani estimates his construction savings at about 10 per cent to 15 per cent over the cost of building separate hotels, with annual operating savings at about 15 per cent to 20 per cent from shared staff and amenities.
Innovations such as these are typically perfected south of the border before heading to other markets. In Canada, the model has been tried by Marriott, which opened a Residence Inn-Courtyard Hotel combo property near Montreal’s Trudeau International Airport in 2006.
While he agrees that multi-brand hotels are a new industry norm, Brian Stanford, the Toronto-based director of hotel industry consultancy PKF Canada, says traditional, single-brand hotels will still dominate the market for the foreseeable future.
“Over the last few years we’re seeing in the range of 50 hotel projects and 5,000 rooms being developed a year here in Canada,” he says. “But the mixed-use area of complementary or related brands is certainly not dominating the development landscape.”
He predicts that because acquiring capital for new projects will remain a challenge, the dual-brand category will fail to grow greater than just 1 per cent to 2 per cent of Canada’s current total hotel market of more than 8,000 hotel properties.
One thing is certain: For every hotel innovation that changes the industry, there is at least one (and likely many more) that falls flat. Here are some of the innovations from the past 20 years that worked, and some that became footnotes of history:
Three innovations that worked …
