Remember when rooms at the Savoy, Grosvenor House and the Dorchester were going for practically half price? Although a room for less than £200 in a deluxe hotel in London is still a rarity, savvy travellers have been getting great deals over the past couple of years, staying in top-notch hotels for three and four-star rates.
Like all good things, it's coming to an end. Sars, 9/11 and the Iraq war helped to slash hotel rates by up to 60%, and much of the excess capacity was dumped on internet sites. But now that the market has stabilised, these deals are harder to find. Bad news for travellers, but good news for the prestige hotel business.
The Sofitel St James in London opened its doors in April 2002, in the thick of world-changing events, and soon became known, undeservedly, as a Novotel due to its low rates. Sofitel is, after all, a luxury hotel brand and the flagship of the vast French-owned Accor hotel chain. Accor cleverly embraces brands in all sectors, from Formule 1, Etap, Ibis and Novotel in the fast-growing budget sector - plus Motel 6 and Red Roof, their equivalents in the US - to Coralia and Thalassa as leisure/spa brands, and Mercure and Sofitel at the top end.
It's a company strategy that has paid off, proving that in the hotel business size matters. In MT's ranking of Europe's top five hotel chains, Accor soars well above its rivals across the Continent. It is three times bigger than its nearest competitor, and it's a major player elsewhere, with nearly 4,000 hotels in 90 countries.
Its balanced portfolio has helped it to weather the worst of the downturn and, like other hoteliers, to become smarter about getting travellers to part with more money, particularly now that there are signs of recovery.
Today, many of the best-priced deals are wrapped up in highly restricted packages that involve minimum stays and advance purchase; fine for time-rich leisure travellers, but not for time-poor business travellers. 'The bargains are there, but you have to abide by the rules of engagement,' explains Trevor Elswood, director of account management and supplier relations at hotel booking agency BSI.
Travellers will have to get used to booking earlier once again - cities such as London and New York, in particular, have bounced back, and Frankfurt, Berlin, Paris and Amsterdam are not far behind. American Express predicts that corporate rates in mid to upper-bracket hotels will increase by as much as 1% this year.
While luxury hotels suffered, their downmarket counterparts flourished.
Budget hotels benefited greatly from the economic downturn and these under-£100-a-night establishments are booming, as hard times make value for money the main consideration for business travellers and tourists. The fact that Best Western is ranked second in our list is witness to this.
Many travellers don't feel they are downtrading at all, as they rarely patronised the multiple restaurants, bars, business centres and spas that are the major attractions of pricier places. Having swapped their out-of-the-way locations for more central sites, budget hotels have become more attractive too, and better equipped for the technological needs of today's road warriors.
Yet for other travellers, particularly those in the face-saving financial and insurance sectors, there is no substitute for deluxe hotel accommodation - where you stay adds status. The likes of InterContinental, Hilton and Societe du Louvre - in the top five of our ranking - are favourites in the business community. 'You can hide the class of air travel, but not what hotel you stay in, particularly if you stage meetings there,' says Mike Platt, MD of travel management firm BTI UK. 'You can't have a meeting with Goldman Sachs in a Travelodge.'
Companies are busy consolidating much of their hotel spend among the big hotel chains in order to optimise savings. It looks likely that an executive clinching that all-important deal this year is more likely to do so in, say, Accor's Sofitel St James than a non-chain property such as the Dorchester.
EUROPE'S FIVE BIGGEST HOTEL CHAINS
No of Revenues Profit
rooms ('02) ('02)
1 Accor 212,558 £4,932m £486m
2 Best Western 75,668 n/a* n/a*
3 InterContinental 71,066 £1,532 £262m
4 Hilton International 58,180 £5,749 £271m
5 Societe du Louvre/Envergure 55,116 n/a** n/a**
SOURCE: European Hotels Groups Database/Travel Research
Consulting/Jones Laing LaSalle
* Each BW Hotel is individually owned and operated.
** Private company owned by Taittinger. Figures not released
BEST UK BUSINESS HOTELS
OVERALL SATISFACTION - %
Four Seasons, London 91.32
Mandarin Oriental, London 90.12
The Savoy, London 89.47
Renaissance London Chancery Court Hotel 88.43
Four Seasons Hotel, Canary Wharf 87.00
The Ritz, London 87.00
The Balmoral, Edinburgh 86.83
Hotel du Vin & Bistro, Birmingham 86.33
Le Manoir, Great Milton, Oxfordshire 85.89
The Dorchester, London 85.50
The Scotsman Hotel, Edinburgh 85.00
The Berkeley, London 85.00
The Lowry Hotel, Manchester 84.89
Claridges, London 84.84
The Connaught, London 83.78
Source: Conde Nast Traveller's Readers' Travel Awards 2003
HOME AND AWAY - HOTELS ABROAD vs THOSE AT HOME
Better Worse Same
than UK than UK as UK
Value for money 69% 13% 18%
Waiter service 67% 14% 19%
Food 64% 17% 19%
Room facilities 50% 50% -
Technology 38% 33% 29%
Extras (eg, gym) 33% 38% 29%
Source: Barclaycard Travel in Business Survey 2004
BEST BUSINESS HOTEL IN WESTERN EUROPE
1 Four Seasons George V, Paris
2 Adlon Kempinski, Berlin
3 London Hilton
Source: Business Traveller 2003 readers' poll
WORLDWIDE HOTEL PERFORMANCE BY CLASS AND SIZE OF HOTEL
PRICE CATEGORY SIZE (No. of rooms)
All Luxury First- Mid- Under 100- Over
hotels class price 100 300 300
of rooms 263.0 330.0 247.0 225.0 66.0 188.0 502.0
Occupancy (%) 63.5 64.9 64.5 61.8 59.5 63.1 66.0
Average daily rate
(USdollars ) 91.6 142.2 92.1 56.0 84.2 85.9 106.2
room (USdollars ) 58.2 92.3 59.4 34.6 50.1 54.3 70.1
SOURCE: Horwath International/Worldwide Hotel Industry Survey/Mintel
Travel & Tourism Intelligence
TEN BIGGEST HOTEL COMPANIES WORLDWIDE BY NO. OF ROOMS
Cendant Corporation 536,097
InterContinental Hotels 514,873
Choice Hotels International 373,722
Hilton Hotels Corp 337,116
Best Western International 308,911
Starwood Hotels & Resorts 226,976
Carlson Hospitality Worldwide 141,923
Hilton Group plc 96,380
Marriot International 63,429
Source: Hotels Magazine 2003
FASTEST-GROWING BUDGET CHAINS IN UK
Operator Brand Hotels Growth
CHE Group Sleep Inn 4 33.3%
Mitchells & Butler Innkeepers Lodge 65 30.0%
Cendant Days Inn 19 26.7%
Accor Ibis 39 8.3%
Permira Travelodge 231 7.9%
InterContinental Express by Holiday Inn 71 7.6%
Scottish & Newcastle Retail Premier Lodge 31 5.6%
CHE Group Comfort Inns 33 6.5%
Whitbread Travel Inn 292 4.7%
Source: Deloitte 2003
HOW THE TOP FIVE WAS COMPILED The table was calculated by averaging the results - based on number of rooms - from four independent data sources: the European Hotels Groups Database, undertaken in conjunction with Leeds Metropolitan University and published November 2003, from PricewaterhouseCoopers (PwC); the June 2003 figures from Travel Research International; the December 2002 figures from MKG Consulting; and the figures published in European Digest 2003 from Jones Lang Lasalle Hotels (JLLH). Results for Best Western were given in only two sources, as the PwC and JLLH analyses exclude hotel consortia on the grounds that they are not owner-operated.