Leading Hotels of the World Swooping in on Group Business

On Sept. 1, 2008, when Ted Teng assumed leadership of New York City-based The Leading Hotels of the World Ltd., he immediately set in motion a five-year business plan that had two core components -- to strengthen the brand by improving the overall quality of its collection, and to increase and drive revenue to individual member hotels.

Now, almost two years into Teng's role as president and CEO of this prestigious luxury portfolio -- which has grown to include 450 unique properties around the globe, from castles to chic, city hotels -- M&C catches up with him on the company's progress.

Q. What is LHW's strategy for group and meeting business, and will it have a dedicated sales team for this market segment?

A. In the past, LHW group sales were more reactive, but this year we have taken a decidedly more proactive and focused approach to groups. In order to accomplish this, we hired senior-level group sales directors with a minimum of 10 years of group sales experience, both on property and in regional roles. And, as we grow this market, we will continue to add dedicated group sales people. We've also increased our sales efforts targeting not only third-party meeting organizers and agencies, but also direct group and meetings business from major corporations in sectors such as the financial, consulting, media, entertainment and pharmaceutical industries.

Q. What does group business mean to LHW, and by how much would you like it to increase?

A. Right now, the group and meetings market is less than 3 percent of total LHW sales. We have an aggressive plan to increase this number to 10 percent over the next three years.

Q. Back in 1994, when I started covering the hotel beat for M&C, many meeting planners would call asking how to get hold of the LHW worldwide directory. Some said it was the only hotel consortium they booked business with. Then, brand proliferation kicked in and luxury hotel development boomed. Has this changed the perception of LHW?
A. Back in 1994, many meeting planners knew our hotels, but they did not know us. Fast forward to 2010, and this perception has evolved and significantly improved. The planners who we currently work with on a regular basis view us as the national sales office for 450 luxury hotels in 80 countries around the world. We want to continue to grow this base of accounts and increase the number of planners who view LHW as their national sales office.

Q. What are the challenges of going after the meetings market in a post-AIG marketplace and still-fragile economy? Or, is it actually an advantage to be an independent collection, because your members don't send up any red flags?

A. As you might expect, the "AIG effect" did not impact LHW as much as other luxury brands, because the majority of our hotels are privately owned and not dependent on brand names. The fact that most of our hotels are independent allowed us to fly under the radar and take business from well-established brands like Four Seasons and Ritz-Carlton.

Q. You have purged some hotels. Do you have new compliance standards in place that they did not meet, or was it purely a lack of capital investment commitment on owners' parts?

A. We've revised our quality standards to include more behavioral measurements from a service perspective. We've also developed a features list that measures the qualifiers that make a Leading Hotel truly unique and authentic. We are not in the business of terminating hotels. We believe in long-term relationships, and we will do everything and anything within our control to help a member hotel. If it's a service-related issue, we have a number of programs their staff can participate in, and then we will re-evaluate. If it's a product-related issue, we encourage and work with them to create a property-improvement plan. Some member hotels had not renovated their properties for a very long time. We encouraged hotels during the downturn to renovate, and we are seeing some very positive results.

Q. What would a first-time meeting planner client be surprised to learn about LHW?
A. We provide ideas and solutions, not standardized packages and limited offers. It's all about the unique story and experience. In a world of "mass everything," people value being recognized as individuals. Chain brands such a St. Regis and Ritz-Carlton are consistently good at what they do, and they devote a great deal of resources to ensure that consistency. Yet, at LHW, we have the remarkable opportunity to differentiate ourselves with our hotels, facilities and services that are not exactly the same everywhere, but that are great everywhere. And, we plan to launch a meeting planner reward program later this year or early 2011!