Suite Deals Offer Space and Value

It started out as a novel idea to attract businessmen but has become the traveling public’s most favored type of hotel.

The all-suite hotel may be the fastest growing segment of the hotel industry . . . and with good reason: It offers exceptional space for an exceptional value.

“We first attracted businessmen to the concept,” said one hotelier, “because very few of them need to use a ballroom or catering facilities, and their room rates at many hotels were supporting services that were irrelevant to them.

“What they wanted was comfort and space to do business and entertain.”

Additional market research showed that the more time a traveler spent on the road the more he or she sought the feeling of being home. And the all-suite concept--a room with a living room, separate bedroom and kitchen--provided that feeling.

The statistics are revealing. One research firm’s study for 1987 showed that occupancy rates at all-suite properties was 71.7%, versus 67.5% for conventional hotels.

Building Boom

Perhaps even more revealing, the same study indicated that nearly 53% of all suite guests said they would stay again at these properties. At conventional hotels only 41.4% said they would make a repeat visit.

As a result, the building boom for all-suite hotels is approaching epic proportions.

“The all-suite concept has caught on in a big way,” said Barron Hilton, chairman and president of Hilton Hotels. “There’s a tremendous need for this kind of market. And the traveling public has spoken. They like all-suite hotels. They like the size of the rooms. They like watching movies on a VCR and cooking popcorn.”

Hilton, like many other hotel companies, is aggressively entering the all-suite market and is developing 10 new properties. Virtually every major hotel chain--ranging from Hyatt to Marriott to Howard Johnson’s--has jumped on the all-suite bandwagon. And relatively new companies, such as Pickett and Homewood, have started as all-suite hotels.

The comparisons between a regular hotel room and an all-suite room can be staggering in space, price and amenities. A standard hotel room can be as small as 210 square feet; an all-suite room can be as large as 1,540 square feet.

Concentrate on Space

When the 225-room Park Hyatt was built in Washington, D.C., designers insisted on enlarging the rooms. “We take up enough space to be a 400-room hotel,” said Paul Limbert, the hotel’s general manager. “But we intentionally chose to concentrate on space.”

Usually a hotel is designed with 7% to 10% of the rooms as suites. The Park Hyatt ignored that tradition. Instead, 60% of its rooms are suites. And the other 40%? The hotel’s smallest units are king-size rooms that could almost be called junior suites.

Of 117 rooms at the Stanhope in New York, 94 are suites. During the renovation, walls were knocked down between rooms to create the large suites. Some feature kitchens.

“But it’s more than just the upscale traveler who wants the larger space,” said Chuck Sweeney, president of Lotus Suites Inc. Sweeney has been busy building all-suite resort properties in Maui and Oxnard, Calif.

In Maui, where rates for average rooms can sometimes be $300 a night, the new Embassy Suites on Kaanapali Beach offers one-bedroom suites for $175 a night, and that includes a wet bar, coffee maker, 35-inch-screen television, videocassette recorder, cassette deck, stereo system and great views.

Each morning the hotel throws in a lavish free buffet. In the early evening there’s a free happy hour.

For business travelers, suites provide an additional function--a separate, private room to conduct business with associates.

“Everyone thought it would just be a flash in the pan,” said one Sheraton official. “But our research shows that customers want the all-suite concept. From a price-value relationship, the concept of all-suites is terrific.”

Unlike other chains, Sheraton is not converting present hotels into all-suite properties. Sheraton plans to build 100 all-suite properties in the next five years. Guest suites average 473 square feet, compared to an industry regular room average of 350 square feet.

Eighty-five per cent of the building is devoted to guest rooms and corridors. Only 15% of the available space is dedicated to public areas (versus 50-50 at regular hotels). Hyatt and Marriott are also racing to build all-suite properties.

More on the Way

Marriott already has built five all-suite hotels, with five more on the way.

“But we’re not rushing into it wildly,” said Bill Marriott, the chain’s chief executive officer. “We have to think it out very carefully. How do you build these things and make them economical? We know the customers love it.”

Not everyone is jumping on the all-suite bandwagon. “We’re going to stay with what we know,” said one Westin official. “But it’s sort of fun to watch everyone kill each other over all-suites. The original concept wasn’t bad.

“You simply start with a module, get rid of your banquet rooms and restaurants, and just sell rooms with more space. But even now that concept has been bastardized. For competitive reasons many of the all-suite hotels are adding restaurants and banquet rooms. It’s a losing proposition.”

Bill Marriott disagrees.

“At first, when you think about it,” he said, “the concept sounds absurd. It’s like saying, ‘Let’s sell two rooms for the price of one and give all the food away.’ How can you make money that way?”

Weekend Business

For starters, Marriott has decided not to give the food away any more. “And we’re watching our rates closely. A regular Marriott room may rent for $100. We’re only charging about $115 for a suite room. If we charged any more than that, it wouldn’t work.”

Marriott reports that the all-suite concept is making money.

All-suites have also begun to do big weekend business.

“Families really like all-suites,” said Marriott, “because it makes sense economically. It provides them with an inexpensive opportunity to have a mini-vacation. And we’re starting to build our all-suites near major shopping areas.”

Until recently families really loved the Marriott all-suite hotels for another reason.

“On Saturday and Sunday mornings,” Marriott said, “they’d go downstairs and pig out on the free breakfasts. But now that we’re charging for breakfast, we anticipate a drop-off in business.”

But unless you live just for breakfast, the all-suite concept remains strong. And for prospective guests, it is still very much a buyer’s market.