In this economy, hotel companies need to be creative to expand their business. One way they’re doing that is by working with convention and visitors bureaus, convention centers, and governments to transform cities into more attractive event destinations. It’s a bit of a chicken-or-the-egg situation: Convention centers can’t expand if they don’t have the hotel rooms to accommodate larger events; hotel companies can’t build new properties if the convention business isn’t there. Working together, however, they can synchronize the supply and demand, as well as come up with cohesive plans to market the city.
Indianapolis is a perfect example of how planning can lead to major growth in convention business. The city is doubling the size of its convention center by February 2011, and has already built a new airport terminal and a new stadium (where the NFL’s Colts play). The hotel piece of the puzzle is the unique Marriott Place complex, a collection of five Marriott-branded hotels offering different price points, all connected to the convention center. In addition to the existing Marriott, a Fairfield Inn & Suites, SpringHill Suites and Courtyard by Marriott opened early this year. A 1,005-room JW Marriott will open in February, coinciding with the convention center expansion.
“In 2004, the city did a feasibility study on the expansion of the Indiana Convention Center, and it showed significant demand to expand,” says Chris Gahl, associate director of communications for the Indianapolis Convention & Visitors Association. “We were passing up more than 150 different conventions, meetings, or expos because they couldn’t fit in our convention center. Another takeaway from that PricewaterhouseCoopers study showed the need for a true convention headquarters hotel—at least 1,000 rooms and, to keep with our footprint, connected into our convention center.”
Gahl says the project will elevate Indianapolis from the 32nd largest convention center to the 16th largest in the country, in terms of exhibit square footage. The Indiana-based White family stepped in to finance the hotel project and worked closely with the association to plan it out.
“When you look at that clientele, they’re looking for options: multiple price points, stratified hotel packages that they can pass onto their membership,” says Cory Chambers, director of sales and marketing for Marriott Place Indianapolis. “That’s how the concept of Marriott Place came up: four different brands, four different hotels across four different price points, one block away from the already-operating 622-room Marriott.”
Branding the complex, however, was not so simple. The company did studies and tested names with local flavor such as Victory Plaza and Victory Place, referring to Indianapolis’ racing connection. In the end, however, it was more self-explanatory to use the Marriott name and create a brand that could work in other cities.
“Our customers told us that if we say ‘Marriott Place,’ they would quickly learn with minimal education that that means a place with multiple branded hotels all in one spot,” says Chambers. “We conceptualized that and developed this brand within a brand, so now we have Marriott Place Indianapolis. Now, will Marriott Place San Francisco, Washington D.C., and San Antonio start to go into development? Potentially, and that’s why we set it up that way. So when other cities have an opportunity to do something like this, they can call it Marriott Place and customers will know what it means.”
Another city looking to step up its convention business is Palm Springs, Calif. In January, the city kicked off a marketing campaign to highlight its $180 million dollar investment in new hotels, property renovations, and 300,000 square feet of convention space.
Because tourism is so important, the city offers tax incentives to hotels to encourage renovations. The results include the opening of the Renaissance Palm Springs (which was formerly a Wyndham) and a $15 million renovation of the Hyatt Regency Suites Palm Springs.
“For a while, we were in a period where the convention center had gone through the expansion, and all of a sudden we could accommodate more and larger conventions, but we didn’t have the hotel rooms to support that,” says Rick Leson, director of sales for the Palm Springs Convention Center. In the last few years, though, the Riviera Resort, which had closed, came back online with its 410 rooms, and the Ace Hotel and Holiday Inn Palm Springs both opened.
One thing Palm Springs and Indianapolis have in common is that the hotels work together and work closely with the convention center and CVBs to get the message out. Hotels in the cities may be competitors, but they don’t always see it that way. They work together to promote the city.
“Some destinations, you’ll look through a magazine and see a convention center ad, and you’ll flip a couple of pages and see a hotel ad, and then a CVB ad,” Leson says. “Sometimes you wonder if these people are speaking to each other and realize the power they could have by doing a co-op ad and pooling their money.”
In Palm Springs, that’s exactly what they did, pooling money from the hotels, the CVB, the convention center and the city to put together a marketing campaign. “A lot of what we did wasn’t really a call to action as much as an awareness campaign,” Leson adds.
The idea of working together wasn’t just for one project. In Palm Springs, all hotel general managers meet once a week and the directors of sales meet every two weeks to discuss business, prospective clients and other issues. “We’ve learned over the years that it’s more of a destination sell than an individual property sell,” says Leson. “It’s for the good of the destination. Maybe it’s because we’re a little smaller than some markets, but it’s always worked. Most clients will come here and comment on how well we all work together. We can all go to lunch with the clients and it’s not a competitive thing. We have more of a welcoming situation.”
Chambers says the same is true in Indianapolis. There’s a common goal to promote and sell the destination. “Sure, there are times we move business from one hotel to another within the city; we do have our local competitors,” he says. “But we see other cities and other big-box hotels as our targeted competitors, not the other hotels in Indianapolis.”
By expanding and renovating, both Indianapolis and Palm Springs are trying to change which cities they’re competing with, eyeing markets such as Chicago, Orlando, and Washington, D.C. “Our intent is not to do twice as much of the business in the markets we’ve done in the past,” explains Chambers. “It’s to raise our game into a new clientele, as well as our existing clientele. It’s really to expand into a new market, not to steal from our current one.”