Limited-Service Hotel Segment Muscles In

“It’s no secret that limited-service hotels are being planted close to full-service hotels and benefitting from the overflow of a convention group or attracting conventioneers with the lower cost,” said Sean Hennessey, hospitality and leisure consulting director at PricewaterhouseCoopers. This is affecting cities on several levels.

In Louisville, Ky., the hotel market has grown over the past five years by more than 5,000 rooms, every one of them in a limited-service property. The increase has enabled the city to hold larger conventions, but the overall hotel package has become less attractive to meeting planners, said Mark Barnes, director of convention development at the Greater Louisville Convention and Visitors Bureau. A market dominated by smaller, limited-service hotels forces planners to split the room block among too many properties, he said.

Image is another problem. Cities with mostly limited-service properties might be perceived as budget locales that will fail to meet attendees’ expectations, say experts.

Columbus, Ohio, has seen the growth of this sector go unchecked for years, said Paul Astleford, president and CEO of the Greater Columbus Convention and Visitors Bureau. While limited-service hotels have well served local and regional groups, the city needs another full-service convention hotel to make a national impact, he said.

But limited-service properties have been known to drive down the overall hotel rate and also negatively affect occupancy at convention hotels two big reasons for full-service hotel developers to look elsewhere.

And with scarce attendees at headquarters hotels, the meeting planner is hit with attrition charges. “Everyone is wrestling with, ‘How do we get people to stay where we want them to stay?’” said James Goldberg, partner at the hospitality law firm of Goldberg & Associates in Washington, D.C. Of course, one way to prevent painful attrition bills is simply to shrink the room block at the headquarters hotel, but that could ultimately result in fewer contract concessions and a higher rate, said Goldberg.

Rather than deny the trend, some groups are including limited-service hotels in their blocks. “It’s not, ‘Oh, God, we have to use the Fairfield Inn,’” said a spokesperson for the Chicago Convention and Tourism Bureau. “Planners are trying to diversify their options.”

“At the end of the day, the biggest benefactor is the attendee,” said Joseph Marinelli, director of sales for the Columbus bureau. “Are larger hotels in a room block going to suffer? Probably. But the business is still going to the city, and with some forethought, the distribution of rooms can be very effective for the end-user.”

• CARLA BENINI and JONATHAN VATNER

What Association Executives Earn The gender gap in earnings grows in relation to size of organization, according to a 2001 compensation survey. Male CEOs Female CEOs Trade association $136,775 $92,125 Individual membership association $139,241 $85,204 Total staff size: 2 or fewer $75,000 $60,000 3 to 5 $95,640 $77,000 6 to 10 $116,550 $108,000 11 to 20 $138,200 $126,000 21 to 50 $201,923 $159,280 51 to 100 $237,900 $145,518 More than 100 $287,600 $249,233 Total annual budget: $300,000 or less $67,600 $54,789 $300,001 to $500,000 $75,600 $68,579 $500,001 to $750,000 $90,000 $72,800 $750,001 to $1 million $102,000 $87,525 $1,000,001 to $2.5 million $118,800 $112,425 $2,500,001 to $5 million $170,000 $137,100 $5,000,001 to $10 million $227,750 $160,585 $10,000,001 to $15 million $225,994 $171,750 More than $15 million $285,000 $256,269 Source: American Society of Association Executives