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BETTER TOGETHER How Marriott’s acquisition of Starwood will change the Canadian hotel landscape

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Volume 29, Number 1

| January/February 2017

Contents

Features 10 DRIVING SUCCESS

Four Seasons Toronto welcomes new ownership By Rosanna Caira

12 MEMORIES FROM THE PINNACLE AWARDS

KML’s 28th Annual Pinnacle Awards brought together more than 520 members of the hospitality industry to celebrate excellence

14 THE PERFECT STORM

Following a record-breaking year of transaction volume, Canada has become a safe-heven for M&A activity By Jackie Sloat-Spencer

53 MILLENNIAL BY DESIGN

Why millennial tastes are top- of-mind for hotel designers By Eric Alister

56 FINDING BALANCE

Hoteliers are taking a strategic approach to building relationships with OTAs By Sherene Chen-See

59 A PLACE FOR EVERYTHING Kitchen design is about getting the biggest bang for your square footage By Denise Deveau

19 BETTER TOGETHER

How Marriott’s acquistion of Starwood will change the Canadian hotel landscape By Rosanna Caira

COVER PHOTOGRAPH BY MARGARET MULLIGAN

● ● ● THE 2017 FRANCHISE REPORT

27 WHAT’S IN A NAME? Brand affiliation offers tangible benefits for hotel operators By Amy Bostock

Departments

31 FRANCHISE LISTINGS

2 EDITOR’S PAGE 3 CHECKING IN 64 HOTELIER: Randy Zupanski,

44 A TRIP THROUGH TIME

49 SOMETHING FOR EVERYONE

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Westin St. Francis, San Francisco

The first in a series highlighting Canada’s rich hotel history By Amy Bostock

A look at the limited-service, mid-scale and extended-stay segments of Canada’s hotel industry By Carol Neshevich

ON THE COVER (L to R) Manlio Marescotti, AVP Development, East; Roz Winegrad, VP Franchise Operation; Don Cleary, president; Laura Pallotta, VP Marketing & Sales; Marisa Milton, VP Human Resources; Ryan McRae, AVP Development, West

JANUARY/FEBRUARY 2017 HOTELIER

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EDITOR’S PAGE

ON THE HORIZON

A

nother year has arrived and it promises to be interesting. The election of Donald Trump as president of the U.S. is fuelling anxiety and trepidation. What’s on the horizon for this year? Will the global economy be impacted; will consumers travel less as result of geopolitical tensions; and will life change dramatically? For now, we can only speculate. Based on various pundits, 2017 appears to bode well for travel. In Canada, the country’s sesquicentennial means celebrations will be the order of the day. At Kostuch Media, we’ll be shining the spotlight on all things Canadian, both with our Oh Canada! signature series (running in both Foodservice and Hospitality and Hotelier magazine) and our Made-in-Canada photo contest (see p. 30). While Canadians are being urged to join the party, tourism bodies across the country hope the world will discover more Canada in 2017. It’s a safe bet they will. According to booking.com, travel will be on the minds of many in 2017, with eight key trends dominating. The biggest trend of the year is what the online-booking agent refers to as Instant Gratification. Today’s travellers are becoming more demanding and impatient. Of those surveyed, 44 per cent expect to plan their holidays with a few simple taps on their smartphones. In a world where buzzwords develop daily, this year’s new term will be “bleisure,” defined as the blurring of the lines between business and leisure travel. Of the 40 per cent of global travellers who travelled for business last year, 46 per cent think they will travel even more for business in 2017, tacking on a few days at the end of their trips as personal vacation. Not surprisingly, 45 per cent of respondents plan to be more adventurous in their choice of destinations. Almost half (48 per cent) see travel as a chance to reflect and make better lifestyle choices. Consumers (44 per cent) are also looking to prioritize health-conscious trips that promise harmony for the mind, body and soul. In the next year, 39 per cent of consumers say they plan to take more eco-friendly trips. Aspirational travel continues to be important, with 58 per cent of travellers interested in spending money on experiences. While technology may fuel many of today’s choices, the human touch has never been as important, so interacting with amazing staff and forging genuine relationships will be an increasingly important hallmark of travel in 2017. Finally, the last big trend of the year: the desire to travel into the unknown (think deep under the ocean and space tourism). Can’t imagine that’s on the horizon any time soon? Think again: as the American election proved, anything is possible.

ROSANNA CAIRA

ROSANNA CAIRA | EDITOR & PUBLISHER rcaira@kostuchmedia.com AMY BOSTOCK | DANIELLE SCHALK | ERIC ALISTER |

MANAGING EDITOR abostock@kostuchmedia.com ASSISTANT EDITOR dschalk@kostuchmedia.com EDITORIAL ASSISTANT ealister@kostuchmedia.com

DEREK RAE | COURTNEY JENKINS | JHANELLE PORTER |

MULTIMEDIA MANAGER drae@kostuchmedia.com GRAPHIC DESIGNER cjenkins@kostuchmedia.com SOCIAL MEDIA/EVENTS CO-ORDINATOR jporter@kostuchmedia.com

CHERYLL SAN JUAN | MARIA FAMA VIECILI | MAGGIE SPENCE |

ACCOUNT MANAGER csanjuan@kostuchmedia.com ACCOUNT MANAGER mviecili@kostuchmedia.com ACCOUNT MANAGER mspence@kostuchmedia.com

WENDY GILCHRIST | SENIOR ACCOUNT MANAGER wgilchrist@kostuchmedia.com ELENA OSINA | CUSTOMER SERVICE ASSOCIATE eosina@kostuchmedia.com DANNA SMITH | ADMINSTRATIVE ASSISTANT dsmith@kostuchmedia.com CIRCULATION | PUBLICATION PARTNERS kml@publicationpartners.com (905) 509-3511 DANIELA PRICOIU | CONTROLLER dpricoiu@kostuchmedia.com

ADVISORY BOARD David McMillan, AXIS HOSPITALITY INTERNATIONAL; Bill Stone, CBRE HOTELS; David Larone, CBRE HOTELS; Anthony Cohen, CRESCENT HOTELS — GLOBAL EDGE INVESTMENTS; Charles Suddaby, CUSHMAN & WAKEFIELD LTD. — HOSPITALITY & GAMING GROUP; Christiane Germain, GROUPE GERMAIN HOSPITALITE; Michael Haywood, THE HAYWOOD GROUP; Lyle Hall, HLT ADVISORY; Drew Coles, INNVEST REIT; Scott Allison, MARRIOTT HOTELS OF CANADA; Ryan Murray, THE PILLAR + POST HOTEL; Geoffrey Allan, PROJECT CAPITAL MANAGEMENT HOTELS; Stephen Renard, RENARD INTERNATIONAL HOSPITALITY & SEARCH CONSULTANTS; Anne Larcade, SEQUEL HOTELS & RESORTS

HOTELIER is published eight times a year by Kostuch Media Ltd., 23 Lesmill Rd., Suite 101, Toronto, Ont., M3B 3P6, (416) 447-0888, Fax (416) 447-5333. All rights reserved. Subscription rates: Canada: $25 per year, single issue $4, U.S.A.: $30 per year; all other countries $40 per year. Canadian Publication Mail Product Sales Agreement #40 063470. Member of Canadian Circulations Audit Board, the American Business Media and Magazines Canada. We acknowledge the financial support of the Government of Canada through the Canadian Periodical Fund for our publishing activities. Printed in Canada on recycled stock.

Editor and Publisher rcaira@kostuchmedia.com FOLLOW US:

For daily news and announcements: @hoteliermag on Twitter 2

JANUARY/FEBRUARY 2017 HOTELIER

and Hotelier magazine on Facebook hoteliermagazine.com


Checking In THE LATEST INDUSTRY NEWS FOR HOTEL EXECUTIVES FROM CANADA

AND AROUND THE WORLD

DESTINATION MARKETING Following the SARS crisis in 2003, the province of Ontario allowed hotel associations and local tourism promotion agencies to collect contributions (up to three per cent of hotel charges) from hotel members, on a voluntary basis. These funds — called a Destina-

TAXING TIMES Toronto City Council is looking to tax the city’s hotel industry BY DANIELLE SCHALK

T

oronto City Council has proposed a new tax be applied to all hotels and accommodations in the city, including short-term rentals offered through home-sharing sites such as Airbnb. The proposed tax is one of the revenue-generating measures currently being explored to help close the gap between the city’s spending and revenues — Toronto currently faces a $91-million shortfall in its drafted 2017 budget. In December, Mayor John Tory’s executive committee voted in favour of asking the province for approval to introduce the hotel tax, along with road tolls on two major city highways. The City of Toronto Act, 2006 (COTA) currently prohibits city legislature from levying a tax on hotels and accommodations, however the COTA can be amended with permission from Ontario’s provincial government. Though taxes on accommodations are far from uncommon in Canada, Toronto was expressly exempt by this Act for a reason, notes Terry Mundell, president of the Greater Toronto Hotel Association (GTHA). “City council voted for a four-per-cent tax [in December], which would put us, with the HST, to an overall 17-per-cent rate — not including the destination marketing program. At the end of the day, we will be one of the highest tax jurisdictions in North America,” he explains. Mundell and the GTHA are concerned that additional taxation of Toronto’s hotels could hamper these properties’ ability to compete with those in the rest of the GTA — especially in the case of conventions and large-scale events — as well as curb investment in new-build properties and reinvestment in existing hotels. There are also serious concerns about the effects such a tax will have on Toronto’s voluntary destination marketing program (DMP) and, by extension, Tourism Toronto — the not-for-profit destination marketing service funded by Toronto’s DMP. “We’re not interested in talking about implementation; we’re more interested in talking about how we grow our business and how council and governments need to focus on economic development and building businesses, not putting up more barriers [to their success],” Mundell concludes. Should this tax be ultimately approved and implemented, Toronto would become the first municipality in Ontario to levy a tax on lodging/accommodations.

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tion Marketing Fee (DMF) — support the international marketing of the city/region. DMFs collected from participating hotels in Toronto, Mississauga and Brampton contribute to Tourism Toronto, which supports regional tourism marketing and development, as well as providing funding for major tourism events in these regions.

PUT INTO PRACTICE In early 2016, the city of Toronto released 2016 Operating Budget Briefing Note: Destination Marketing Program, which identified two key structures a hotel tax imposed by the city might take. The first option involves the co-existence of the tax with Toronto’s existing destination marketing program (DMP). This model is relatively rare in Canada, however it currently practiced in Vancouver, Calgary and Edmonton. The second possible structure would see the proposed tax take over the DMP, with a portion of the revenues generated being remitted to the city’s hotel industry — creating mandatory participation in Toronto’s marketing program. At press time, there was no clear indication of which model Toronto City Council favoured. JANUARY/FEBRUARY 2017 HOTELIER

3


COMING EVENTS Jan. 23-25: The American Lodging Investment Summit, JW Marriott & Microsoft Theatre, Los Angeles, Calif. Tel: 1-714-540-9300; email: marketing@ burba.com; website: alisconference.com Jan 23-25: Agilysys Inspire 2017, M Resort Las Vegas, Las Vegas, Nev. Tel: 844-840-1841; website: inspire. agilysys.com Jan 23-25: Great Hospitality Show, NEC Birmingham, Birmingham U.K. Tel: 207-886-3137; email: nadine.close@ montex.co.uk; website: hospitalityshow. co.uk Feb. 15-16: Hotel Association of Canada’s National Conference, Sheraton Toronto Airport Hotel & Conference Centre, Toronto. Tel: 416-924-2002 ext. 229; email: yalilabarreda@bigpictureconferences.ca; website: bigpictureconferences.ca

DOUBLING UP Hilton Worldwide and The Widewaters Group, Inc. recently opened their dualbranded Hilton Garden Inn Calgary Downtown and Homewood Suites by Hilton Calgary Downtown. This new addition, owned by Calgary Operating Company, Inc., brings 320 new rooms to the downtown-Calgary area, further expanding Hilton Worldwide’s Canadian presence. The property is in close proximity to many of Calgary’s local attractions, including the National Music Centre, Scotiabank Saddledome, Calgary Stampede, Calgary Tower and the Calgary Zoo, St. Patrick’s Island, Heritage Park Historical Village and nature trails across the nearby Rocky Mountains. The hotel has two separate lobbies and dining areas, with 3,016 sq. ft. dedicated to meeting spaces, which can accommodate up to 200 people. Homewood Suites by Hilton offers both studio and one-bedroom suites, which feature fully equipped kitchens and separate living and sleeping areas.

March 23: Icons and Innovators Breakfast Speaker Series with Arne Sorenson, CEO of Marriott International, Tel: 416-447-0888 ext. 235; email dpricoiu@ kostuchmedia.com; website: kostuchmedia.com/shop April 3-4: British Columbia Hotel Association Summit, Victoria Conference Centre, Victoria. Tel: 800-663-3153; email: communications@bchotelassociation.com; website: summit2017.ca

May 15-16: Canadian Hotel Investment Conference, Westin Harbour Castle Toronto, Toronto. Tel: 416-924-2002 ext. 229; email: yalilabarreda@bigpictureconferences.ca; website: bigpictureconferences.ca

FOR MORE EVENTS, visit http://bit.ly/Hotelierevents 4

JANUARY/FEBRUARY 2017 HOTELIER

ATTRACTING EXCELLENCE The best of the Ontario tourism industry was celebrated in Ottawa in November at the 2016 Ontario Tourism Awards of Excellence Gala. The Ontario Tourism Awards, which are divided into three categories, are jointly presented by the Culinary Tourism Alliance (CTA), the Ontario Tourism Marketing Partnership Corporation (OTMPC) and the Tourism Industry Association of Ontario (TIAO). In addition to the Ontario Tourism Awards of Excellence, this year, Attractions Ontario also presented its Ontario’s Choice Award for Top Attraction — new for 2016. “The Ontario Tourism Awards of Excellence celebrate our industry’s top achievements,” says Beth Potter, president & CEO, TIAO. “We’re proud to recognize these achievements — and the individuals who bring them to fruition — each year as part of the Ontario Tourism Summit.” hoteliermagazine.com

PHOTO COURTESY OF THE CHELSEA HOTEL, TORONTO

April 24-25: EyeforTravel San Francisco Summit, Hotel Nikko, San Fransisco, Calif. Tel: 800-814-3459; email: shreya@ eyefortravel.com; website: eyefortravel.com


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InBrief

MEMBERS ONLY The British Columbia Hotel Association (BCHA) launched a new member-benefit package — created in response to members’ feedback — which will offer savings on purchases through partner suppliers. “We are committed to providing our members with increased value and benefits to assist them in operating their properties,” says James Chase, CEO of BCHA. New programs announced include key business needs such as payment processing, insurance, payroll, natural gas and ATMs; FF&E, such as case-goods, linens, mattresses and seating; and operational supplies, including cleaning products, pool chemicals, lighting, coffee and coffee equipment, printing and key cards. Jason Cheskes, president of Above the Line Solutions, will be assisting the BCHA with overseeing the program and its partnership with suppliers. The BCHA plans to expand this program in the future with additional services and prodS6_FranAds_Hotelier_2016.pdf 1 2016-12-12 ucts its members can benefit from.

Pearle Hospitality has broken ground on the Elora Mill Hotel & Spa at a ceremony at the historic Elora grist mill. The intimate 30-suite hotel is expected to open in early 2018. The property will also feature a restaurant and bar, enclosed in glass and cantilevered over the Grand River. The hotel spa will be built along the cliff of the Elora Gorge and offer guests a wide range of custom-designed treatments… InterContinental Hotels Group (IHG) has committed to serving 100-per-cent cage-free eggs throughout its U.S., Canadian and European operations by 2022. This measure is part of an overall goal to source only cage-free eggs across all IHG properties worldwide by 2025…Marriott International Inc. has launched the Marriott International Luxury Brands group. The group includes St. Regis, The Luxury Collection, W Hotels, The Ritz-Carlton, RitzCarlton Reserve, Bulgari Hotels & Resorts, Editions and JW Marriott brands…The planned spin-offs of Hilton Worldwide Holdings were approved by the company’s Board of Directors. The transactions are expected to be completed on Jan. 3, 2017, with Hilton Grand Vacations and Park Hotels & Resorts set to 4:16 PM start trading on the New York Stock

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Exchange the following day…Group Germain Hotels has eliminated fixed-departure times for anyone booking directly with one of its hotels — a first in the Canadian hotel industry. Through this new offer, all guests who book at a Le Germain Hotel or Alt Hotel through the brands’ websites or by telephone can let staff know what time they would like to check out upon registration…Wyndham Worldwide has once again achieved a perfect score of 100 on the Human Rights Campaign’s Corporate Equality Index, receiving the title of Best Place to Work for Lesbian, Gay, Bisexual and Transgender Equality… Realstar Hospitality has opened Days Inn & Suites – Warman Legends Centre in Warman, Sask. The purpose-built hotel is based on the brand’s G2 prototype (designed in Canada), adding another 74 rooms to the chain’s increasing portfolio… Toronto’s Marriott Downtown Eaton Centre hotel has completed a multi-million-dollar renovation of its guestrooms and public spaces. The transformation includes new 49" flat screen TVs in guestrooms and 55" flat screen TVs in all suites, as well as new furniture…Victoria has been selected to host the 30th annual Canada’s West Marketplace — one of Western Canada’s premier travel trade shows. More than 300 Alberta and British Columbia tourism suppliers are expected to attend the event. Studio 6 - Toronto


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People Ken Kirkby, GM of Super 8 Peterborough, Ont., has been named General Manager of the Year by Wyndham Hotel Group. Ken Kirkby To be eligible for the award, each candidate must be an active member of his/her community in addition to being a general manager of a “Pride-of-Super-8” hotel…Mark Finn of Stephenville, N.L. will represent Canada at Les Clefs d’Or International Congress in Berlin, Germany, March 23 to 28, 2017. The 32-year-old concierge at the Fairmont Pacific Rim Hotel

in Vancouver, B.C., is the only Canadian concierge under the age of 36 to attend the international congress…Benjamin Colling is the new CEO of Canadian Tourism College (CTC) in B.C., as well as the new CEO of the Asia Pacific Education Group — an education investment company which owns and operates CTC…Anthony Pollard, past-president of the Hotel Association of Canada (HAC), was inducted into the Canadian Tourism Hall of Fame at the 2016 Air Canada Canadian Tourism Hall of Fame Luncheon…Hilton Worldwide Holdings, Inc. has appointed Matthew Sparks as the new VP and CIO of Park Hotels & Resorts — the planned realestate investment trust that is set to separate from Hilton this month. In his new role, Sparks will oversee investments and acquisition strategies for the brand and report to Thomas J. Baltimore, Jr., president and CEO of Parks Hotels & Resorts.

SupplySide Richard Purcell is the new regional director, Strategic Partnerships for Western Canada, at Freeman Audio Visual Canada. Based in Freeman’s Vancouver office, Purcell brings two decades of background in both sales and service in convention centres and hotels in Vancouver…LumiFi — a wireless-lighting-control software designed by German-trained architect and lighting designer Beatrice Witzgall — allows hotels to automate and personalize interior lighting on a large scale. LumiFi can control and unify LED light bulbs from a variety of manufacturers, saving hoteliers the added cost of having to purchase specific lightbulbs that work with only one manufacturer’s software. LumiFi currently works with products from Philips Hue, Osram Lightify, GE, Samsung, Lifx, Thermal Solutions Resources (TSR) and TCP.

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DRIVING

SUCCESS American auto-parts magnate Shahid Khan purchases the Four Seasons Toronto and sets a record as the highest single-asset price-per-room transaction in Canadian history BY ROSANNA CAIRA PHOTOGRAPHY BY ROGER YIPP

S

hahid Khan wasn’t looking to buy a hotel, let alone the Four Seasons Toronto — the vaunted flagship of the acclaimed global hotel chain. But when the sports and auto-parts magnate learned that Kingdom Holding Company was putting the 259-room property on the seller’s block, he immediately jumped at the opportunity. “I have a love for Toronto,” says the affable Pakistan-born owner of the Flex-N-Gate Group, a stable of auto-parts factories in North America, including 11 in Ontario, in addition to plants in Mexico, Argentina, China, Brazil and Spain. Khan also owns the Jacksonville Jaguars’ NFL football team and the England-based Fulham Football Club.

10

JANUARY/FEBRUARY 2017 HOTELIER

Certainly, the fact that the hotel was the flagship property of the respected Four Seasons’ brand, which was born and developed in Canada’s largest city, played into his decision to spend $225 million on the asset. “People take pride in it because it’s a homegrown product; you can have a number of luxury brands, but this is a breed apart and for all the right reasons. The asset, not only the location, has a really unique Four Seasons’, but also a real Toronto, feel to it.” Khan says that “If it was a Four Seasons anywhere other than Toronto, I would have had no interest,” he states categorically. “With all candour, you name any brand in Toronto, except Four Seasons, I would have no interest.” Ironically, Khan admits that prior to buying the hotel, he had never even stayed at the property. Apart from the bricks and mortar of the deal, Khan says “part of the magic of the deal was having Four Seasons manage it. “To me, it wouldn’t have made any sense not to have them. What gives it value, what gives it soul and [gives me] great comfort is that the corporate office, the brainpower, is 15 minutes [up] the road. Somebody is watching it locally. Globally, when they have people work on all their deals, or owners of other properties, they stay here. The founder of Four Seasons is here…If you wanted to hide from them, this is the worst place to be,” he quips. “If you want to have ownership interest, engagement; that’s something money can’t buy. If we’re not doing something right, other Four Seasons owners and managers are here, they are going to be quick to point it out — that’s going to be good.” As for Four Seasons’ greatest strength, Khan is unequivocal “People; it’s so simple, so obvious, but so hard.” Having a solid management company at the helm means Khan doesn’t have to be very hands on. “There is a fine line between delegation and abdication,” he says, adding, “I don’t want to be micro-managing, but some things you don’t want to abdicate. A lot of times there might not be hoteliermagazine.com


ROI, but you stay because this will maintain the business and enhance it and make it better. I want to come in at the level where you can see the big picture; you’ve got to be able to invest…obviously, that comes from the owner.” Though the hotel is only four years old, the 66-year old self-made billionaire, who ranks 70 on the 2016 Forbes 400, has a few immediate plans for the property. “You can maximize the potential here. This is a great property but, like anything else, it can serve the community better,” he says, pointing to imminent changes in dbar (the casual lobby restaurant/bar) and the spa. “We want to keep them fresh and on the leading edge. There are investment plans on those. As a matter of fact, I was at head office and the plans will be implemented very quickly — in the next six months.” He’s also planning to invest in room technology. “Some of the technology in the rooms is good but if there’s something better out there and you can make the experience better, you want to do that.” Additionally, dbar will benefit from improvements made to the exterior, including the addition of an outdoor patio. “This is an iconic corner, at Bay and Yorkville, but the way the building is, the winds come in. I’d like to see us have a world-class designer do a glass awning that can add to its signature status. It can be a civic asset, a gathering place for people to celebrate. There’s no reason this corner, with a world-class treatment, can’t be very recognizable. With all the new technology, such as LED lighting, whatever you’re celebrating, it’s a public space and people want to be part of it.” Khan is also looking to invest in signage. “I don’t know why, but there are no signs here. Where is Four Seasons? The first time I came, I couldn’t even find it.” At $225 million, Khan’s purchase made history as the most expensive hotel sold in Canada. Asked what makes the hotel worth the $868,725-per-key price tag, Khan is quick to say “It has that intrinsic value to me and to anybody else. This is the purest, most luxurious, most desirable bricks and mortar in Toronto.” According to Mark Sparrow of JLL Resorts, the realtor who oversaw the transaction, the Four Seasons Hotel Toronto had risen in value and the former owners, Kingdom Holding Company, (KHC) believed it was a good time to sell. In a statement, the company said it made $17 million from the deal. As for the future, now that he owns the gem in the Four Seasons crown, is Khan interested in purchasing more hotels? “In all candour, I have enough to do,” he says, pointing to his auto plants, his NFL franchise, as well as the soccer team he now owns in England. Does the novice hotel owner see similarities between the auto industry and the hotel industry? “Attention to detail, taking care of the customer and profitability,” he states emphatically. “If you don’t make money, you can’t take care of people.” u hoteliermagazine.com


1 PINNACLE AWARDS

PHOTOGRAPHY BY MARGARET MULLIGAN

2 1

4

1. Mandy Farmer of Accent Inns, Hotelier of the Year 2. (l-r) Wolfram Schaefer of Avendra, Dominic Parent of ParaNet, Rosanna Caira of KML and Afsar Khan of Supplier of the Year Avendra Canada 3. Lifetime Acievement award winner Michael Beckley with Steve and Reetu Gupta 4. Marc Staniloff of Company of the Year Superior Lodging 5. Steve Bury of Freeman Audio Visual Canada 6. Ray and Sandeep Gupta of Regional Company of the Year, Sunray Group 7. Winners of the 2016 Pinnacle Awards Photography by Lynne Fox Photography

12 FOODSERVICE AND HOSPITALITY JANUARY/FEBRUARY 2017

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THE 2016

PINNACLE

AWARDS 3

More than 520 members of the hospitality industry gathered at the Fairmont Royal York Hotel in December to celebrate Kostuch Media Ltd.’s 28th Annual Pinnacle Awards. Regarded as the Oscars of the foodservice and hospitality industries, the awards celebrate excellence and toast industry leaders and their commitments to their communities. Winners of the 2016 Pinnacle Awards include: Superior Lodging (Company of the Year); Sunray Group (Regional Company of the Year); Mandy Farmer, president of Accent Inns and Hotel Zed (Hotelier of the Year); and Avendra Canada (Supplier of the Year). The Rosanna Caira Lifetime Achievement Award was presented to hotelier Michael Beckley.

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TRENDS

THE PERFECT STORM As the dust settles after a record-breaking year of transaction volume, Canada has earned its position as a safe haven for M&A activity BY JACKIE SLOAT-SPENCER

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hat has made 2016 a recordbreaking year? The numbers speak for themselves: $3.8-billion in transaction volume surging through the Canadian hotel marketplace as of third quarter, fuelled by massive industry consolidation on both global and domestic scales. “It’s a lot easier to underwrite today than it would have been three or four years ago, especially in Toronto or Vancouver where you’re seeing significant double-digit RevPAR growth,” says Bill Stone, EVP at CBRE Hotels, based in Toronto. “So you have a strong Canadian economy, a safehaven aspect, low interest rates and strong returns, plus strong potential of returns. It’s a perfect good storm in that context.” It’s been nearly 10 years since the industry last saw a comparable level of investment activity. During ’06 and ’07, the industry enjoyed a

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combined $4.9 billion in transaction activity after CHIP REIT and Legacy Hotels REIT were privatized and the Fairmont Canadian Resort portfolio was acquired for $1.7 billion. Since the recession, Canada has established itself as a place of interest for both domestic and international buyers. Growing availability of debt capital, low interest rates and strong potential returns have contributed to an unprecedented level of activity in the country. By the third quarter of 2016 alone, 12,703 rooms had changed hands. “All the factors have come together to make [Canada] ripe for this level of activity,” says Robin McLuskie, VP of Hotels at Toronto-based Colliers International Hotels, who adds that operating performance has improved since the recession. “It’s not really as much a local story as it is a global story, where you see the larger M&A deals,” she says. “I think there’s some of that capital leaving China, leaving Asia, and different parts of the world are looking to invest in Canada.”

FOREIGN-BUYER FRENZY

In the spring, industry members stood at rapt attention as China’s Anbang Insurance Group Co. disrupted the Marriott-Starwood merger with a $12.8 billion offer. But, by late September, Marriott became the proud new owner of the Stamford, Conn.-based company, growing its portfolio to 30 brands comprised of 5,700 properties and 1.1 million rooms. “It is, in many ways, about brand dominance and Marriott has assumed that position really well,” Stone sums up. In August, Hong Kong-backed Bluesky Hotels and Resorts Inc. snapped up Toronto’s InnVest Real Estate Investment Trust in a deal valued at $2.1 billion, representing 14,500 rooms across Canada. “This transaction is a winning outcome for all stakeholders,” says Drew Coles, president and CEO of InnVest, which presided over 107 properties in Canada, as well as a 50-per-cent interest in Choice Hotels Canada. hoteliermagazine.com


Dubbed a “category-killer” this year by industry pundits, the Bluesky deal is predicted to be the first of many for the privately held company, whose leadership is interested in making capital investments to improve the quality of its assets and expand its base. “This transaction is an investment that will establish a global platform from which Bluesky will continue to pursue growth opportunities in North America,” says Li Chen, the president and CEO of Bluesky. And, the industry consolidation didn’t stop there. Soon after, AccorHotels finalized its purchase of FRHI Hotels & Resorts Inc. In September, APA Hotel Group, the largest hotel network in Japan, inked a deal to buy Coast Hotels for $210 million, marking a new era of expansion into North America. These deals followed in rapid succession after the mega-deals of 2015, including IHG’s purchase of Kimpton Hotels & Restaurants for $430 million, Marriott’s purchase of Delta Hotels & Resorts for $168 million and Wyndham’s acquisition of Dolce Hotels and Resorts for $57 million. UNCOVERING THE REAL STORY

Looking back at 2016, Stone is quick to point out that the big deals disguise the reality of transaction activity. “There’s big M&A activity, but fewer single assets that are trading,” he explains. “And a big part of that is there’s been a significant decline in Alberta and Saskatchewan in terms of activity.” The Prairies suffered a 58.8-per-cent drop in volume by Q3, compared to the previous year, generating only $63.5 million in transaction activity. In contrast, Ontario racked in a little more than $1 billion in trades alone, boasting a 37-per-cent increase. On a positive note, Colliers reports an interest in limited-service assets, with active trading between private investors and hotel investment companies alike. “It’s interesting because the headlines are all showing these larger deals, but there is still a lot of trading activity in limited-service,” she says. “There’s still tremendous activity on the transaction side in general, in the hoteliermagazine.com

$5 to $25 million deal range. That’s a reflection of lots of capital being available from the domestic buyers, so we’re seeing tons of interest from local players as well.” Local players such as Markham, Ont.’s Easton’s Group of Hotels and Mississauga, Ont.’s Silver Hotel Group, which each completed acquisitions worth $90 million, last year. Easton’s nabbed a 14-property hotel portfolio from InnVest REIT for $90 million, which included 1,571 keys across the limited, select and full-service segments in both central and Eastern Canada. In August, Silver Hotel Group acquired the Novotel Toronto Centre and Pantages Hotel Toronto. The weakened Canadian dollar may have attracted increased attention to Canada, but Dimitrios Zarikos, outgoing regional vice-president and GM of the Four Seasons Toronto, thinks it may be more than that. “The first thing that comes to mind is the Canadian dollar is attractive right now — but also, since 2008 and the financial crisis, Canada has been put on the map and people are paying attention to things beyond maple syrup.” So, when Four Seasons Toronto was put on the market, the interest was palpable as potential buyers flooded in to view the property. “There was huge interest in the hotel — [we took] maybe two, three dozen tours around [the property],” he says. When Shahid Khan — the founder of Flex-N-Gate Group and CEO of the Jacksonville Jaguars of the National Football League — offered $225 million for the

four-year-old asset, he set a national record at $868,725 per room. “I don’t think we could have found a better person to buy this hotel,” says Zarikos. “He is enormously proud of owning the Four Seasons Toronto.” (see story on pg. 10) THE COMPETITIVE ADVANTAGE

Rest assured, there’s still room for strong independent hotels to thrive in a marketplace dominated by frantic M&A activity, asserts Stone. “The hotel-purchase decision is made up of a multitude of factors — branding, positioning, location, services, amenities and the quality of the property. All these things help shape purchase decisions.” And as hoteliers gripe about OTA commissions in the 15- to 30-per-cent range, the industry consolidation will help them rally to take back market share from profit-eating third-party travel sellers. “We want to help dispel the myth that other travel websites offer better rates for our hotels,” says Karin Timpone, Marriott International’s global marketing officer. The company recently announced new, lower hotel booking rates exclusive to its Marriott Rewards loyalty program members who book directly through its website, app and other channels. The business efficiencies abound for merged portfolios. “Ultimately, from a buying-power standpoint, when you’re running tens of thousands of rooms, it has an impact on the brand’s ability to acquire FF&E, amenities and all the major acquisitions in a hotel, on a

Canadian hotel transaction volume SOURCE: CBRE HOTELS Q3 REPORT

2016

$3.8 BILLION

185.7 PER CENT CHANGE

$1.3 BILLION 2015

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much more efficient basis,” says Stone, adding leaders will be able to flex more muscle when negotiating corporate travel rates. And, while it may be too soon for some of the newer deals, there are already initiatives in the pipeline. Several hotels will receive a face-lift, thanks to new ownership. Execs at APA Group have described plans to use Coast Hotels as a vehicle to help introduce a new urban-style hotel concept in North America. Features include LED-equipped showers and water-conserving fixtures, as well as other eco-centric initiatives that will allow the hotel to reduce its carbon footprint. According to a Carlson Wagonlit white paper published in June, the mergers may give hoteliers more heft when negotiating with corporate travel buyers, especially in markets with fewer options. And, now that Marriott is expected to capture nearly a third of all corporate travel spend in 14 of 20 of the world’s top cities —

including 41 per cent in Toronto — negotiations will be fierce. At the same time, these megamergers will spell out other benefits for the chains as well, including loyalty programs that will help drive business away from the OTAs, and being able to expand lifestyle brands in certain markets that will help combat sharingeconomy providers such as Airbnb. The big question on everyone’s mind is what 2017 will bring. After a rough 2016, Alberta is expected to lead the country in GDP growth and, together with Saskatchewan, should experience a rebound in investment activity. McLuskie adds that while foreign buyers are purchasing larger platforms, they may not desire the entire portfolio, so we can expect more trading activity on an individual basis. Stone hints at two more big deals in the works, slated to take place early 2017, but, he asserts, the level of activity won’t be as earth-shattering as 2016. “I don’t think it’s going to be

Number of trades SOURCE: CBRE HOTELS Q3 REPORT

2015

92 221 2016

140.2

PER CENT CHANGE quite as strong as [last year]. If you include the Bluesky deal, it’s going to be hard to beat $3.8 billion in activity, but we see continuing demand, accelerating offshore interest and strong fundamentals.” u


Open the door to more. You’re not in the hotel business for less. You’re in it for more. So when looking for an investment opportunity that gives more of everything it takes to help you succeed — reservations, property support, marketing, technology, you name it — you’ll find more of what you’re looking for with Choice Hotels®. Bigger is better, too. Whether you’re planning a new build or changing brands, you’ll benefit from the scale and distribution of one of the world’s largest hospitality companies. With more than 75 years of experience, an unflagging focus on innovation and a commitment to your ROI, we provide every franchisee with the expertise, support and resources it takes to succeed. Open the door to more, today.

ChoiceHotelsDevelopment.ca ©2015 Choice Hotels Canada Inc. All Rights Reserved.


ROUNDTABLE

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TEAM SPIRIT (from l-r) Manlio Marescotti, AVP Development, East; Jessica Conant, VP Revenue Management; Roz Winegrad, VP Franchise Operation; Don Cleary, president; David Cheang, VP Information Technology; Marisa Milton, VP Human Resources; Frederic Herlory, VP Finance Operation; Ryan McRae, AVP Development, West; Laura Pallotta, VP Marketing & Sales; Michelle Bozoki, VP Marketing; Martin Stitt, AVP Western Canada

GER BETTER OMING TOGETHER ,

With Marriott International’s acquisition of Starwood Hotels now finalized, how will the hotel landscape change? INTERVIEWS BY ROSANNA CAIRA | PHOTOGRAPHY BY MARGARET MULLIGAN

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for travellers. That’s what really drove it for us — the synergies between the two [companies]. We’ve always admired Starwood. They had a great reputation for innovation, strong sales and marketing, a very strong loyalty program with very loyal SPG members. We think combining that with our operating expertise and our culture of putting people first is a powerful combination.

DON CLEARY, PRESIDENT, MARRIOTT HOTELS OF CANADA

there was concern whether we were going to get this done. I don’t think Marriott would have gotten into an ultimate bidding war. We were only going to offer what we thought made sense — that was the offer we put on the table and we think we’ve gotten a very good deal. RC: Now that the acquisition is final and you can actually start bringing the two companies together, what do you see as the impact of this acquisition?

RC: How many hotels do you now have? DC: We do have great presence in a lot

RC: How long was the deal in the making for? Don Cleary: Ultimately, the deal was put together in a couple of weeks, But, when this first came on the market, Marriott wasn’t interested. We looked at it, but it was subsequently, with the relative stock prices, that as we got closer, it became a more compelling economic deal for us.

Something like this comes on the market once in a generation with such a vast portfolio of brands. We saw it as transformative. From our perspective, it enables us to create a more compelling business model for our key stakeholders — customers, associates, owners and franchisees and, of course, our shareholders. RC: What precipitated the acquisition of Starwood Hotels and Resorts? DC: From a customer standpoint, it has a lot to do with the loyalty programs. We’re combining two very strong loyalty programs. This will enable us to create synergies, both in terms of revenue — primarily driven by the combined power of the loyalty programs — and the broader reach of our sales and marketing abilities. There will be cost synergies, driven by size, and in the areas of procurement and partnerships. That will drive better returns for our owners.

With this portfolio of 30 brands, we’re now able to have the right hotel in the right location. That’s compelling 20

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DC: We have 5,700 hotels worldwide in more than 110 countries, with a very strong presence now in Asia. Of course, we’re very strong in North America. Today, the count is 214 hotels in Canada, which is the thirdgreatest number of hotels, behind only the U.S. and China. RC: In terms of the regulatory process, it took a long time to finalize. How many different countries had to approve the deal? Were there obstacles? DC: There were regulatory bodies in

16 different countries. I don’t think we ever doubted we’d get there. Frankly, the level of consolidation in the hotel industry is relatively modest compared to other industries around the world. But it was the process of pooling the information and providing it that took time. Various countries went faster than others. But all of them ultimately gave approval with absolutely no request for any kind of modifications. RC: Were there moments during the process when you thought it wouldn’t happen? Especially when Anbang made a counter offer? DC: The deal also required shareholder

approval from both Marriott and Starwood. And a matter of a week or so before our respective shareholder meetings, Anbang came in and made their offer. Under the terms of our agreements, we had the ability to make another offer and we did, and ultimately Anbang decided to back out. In those couple of weeks, yes,

of the markets. That will create a more compelling case for our customers. The synergies will enable us to have a better loyalty program for customers and to have the right hotel in the right location. Location is often a basis upon which people choose hotels. From a competitive standpoint, that’s exclusively what these competition bureaus looked at in all these countries, including Canada, and all of them approved us with no modifications. Again, the level of consolidation in the industry is rather modest. Secondly, a number of our hotels are franchised hotels and they act and price independently. For us, that is actually a bigger benefit to our owners and franchisees and to our customers because of the presence and because of the compelling business model this presents for us. RC: Based on recent statistics, it seems RevPAR was below expectations last year. What are you projecting in 2017 in terms of RevPAR and occupancy for the company as a whole? DC: We did release earnings and put out

our forecast for [this] year. We’re looking at North American RevPAR to be up roughly two per cent for 2017 — ­ zero to two per cent was our range, a bit lower than in 2016. Things are a little stronger in Canada than they are in North America as a whole. We had a very solid third quarter. There were one-time costs related to the acquisition, of course. But when you separate [them], we had a good quarter.

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RC: Will all the Starwood brands remain under the umbrella? DC: In terms of brands, we have no

plans to eliminate any. That’s what we paid for — those brands. We have owners that have invested in those brands. It wouldn’t be fair to them to say, ‘Okay, we’re going to eliminate this brand you’ve invested in. We will focus and define and position all of those brands — we’ve got teams working on that as we speak. RC: How do you integrate two large companies? DC: We have a dedicated integration team at corporate that leads continent integration teams throughout the world. We’re approaching it from our culture of putting people first and full transparency with our associates, owners and franchisees.

That team is dedicated to the integration full time. They were the ones that helped us launch globally on day one. The ability to link the two loyalty programs, such that Marriott Rewards members could transfer points over and redeem points at SPG, we were able to do that on day one. In fact, there was an SPG member who went online, transferred points into Marriott Rewards, joined Marriott Rewards, linked the accounts, transferred points to Marriott Rewards and booked a redemption stay at the Osaka Marriott all within 10 minutes of us closing on the merger and announcing the link. RC: Is there duplication in terms of owners? DC: There is some overlap, roughly 20 per cent. We’re conducting orientation meetings at our corporate headquarters for our new Starwood legacy owners. We hosted a number of our Canadian Starwood owners this month. We have a two-day meeting planned to introduce them to us and how we work and communicate. hoteliermagazine.com

RC: Are the former Starwood executives that handled Canada from Connecticut still part of this group? Or have they been let go? DC: From an associate standpoint,

almost all, if not all, the folks at property stay in place. There’s no change in people at property. Obviously, in a merger like this, we look to savings mainly at the corporate level. We are looking for, and have announced, our target is $250 million of corporate savings between the two. As an example, you don’t need two CFOs…Most of that was in the C-Suite in Stamford, Conn. Canada was largely supported by people in the U.S. We are absorbing the 72 Starwood hotels into the Canadian organization that we set up here a yearand-a-half ago in Canada after acquiring Delta. We are adding a number of positions to the team, mainly in the franchise support and sales-andmarketing area. We’re in the process of filling those jobs and the vast majority of those, of course, we are filling with Starwood associates.

will become even more so with the combined loyalty programs. Through our loyalty programs, you get the best rate — better than anywhere else, despite the sometimes popular notion that you can get better rates on OTAs. It’s not true. In fact, you get better rates when you book on our direct sites as part of our loyalty program. You get our mobile check-in and checkout. The loyalty program gives us a chance to tailor and [develop] our personal relationship with our customers. We prefer that relationship. Candidly, we don’t need an online travel agency in the middle of that when we have that relationship. But there are many ways we can partner with online travel agents — they have a broader reach and help bring new customers to our hotels. In that regard, we consider them very good partners.

RC: Will the Starwood name still exist? DC: The only place we’ll use Starwood is with the Starwood Preferred Guest Program. Most people refer to it as SPG. Starwood was the corporate name for the company and with that company no more, we won’t use the Starwood [name]. We’ll use, obviously, all of its brand names and the great recognition they have. RC: With the added strength of the SPG loyalty program, you can really compete against the Expedias of the world. How do you plan to affect that kind of change? DC: We have great relationships with

the online travel agencies and have for a number of years. They have great reach and are effective at helping us reach travellers, especially those that don’t travel a lot. For those folks that travel often and stay in our hotels, we obviously think our direct channels create a compelling business case that

LAURA PALLOTTA, VP, MARKETING & SALES RC: How do you see the portfolio of 30 brands playing out in Canada? Laura Pallotta: First of all, out of the 30 brands, 18 of them are represented in Canada and we’re actually going to be moving to 19 with the AC brand that’s coming into Montreal later this year. It’s a really interesting brand named after Antonio Catalan, from Spain. We compare it to if Giorgio Armani had a brand, what would that brand look like — very sleek and modern. RC: Obviously, having only 19 of the 30 represented in Canada gives you some scope for expansion of the other brands into Canada. Do you see that happening in the near future? JANUARY/FEBRUARY 2017 HOTELIER

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LP: As we’re talking to owners and

prospective owners, we’d be delighted to see more of the brands come in where they make sense. There are some exciting brands that, right now, are not represented but it would be cool to see them. With those 30 brands, when you asked about the future, we love all of them. You’ll continue to see them refine as we start to make sure we have swim lanes for these brands. They’ll be tinkered with a little bit, just to make sure that they hit the mark with what customers are looking for. RC: What do you think will be the biggest challenge for the integration in the branding area? LP: To effectively articulte the brand

voice to our customers. It’s my job to make sure our sales folks are able to place that appropriately and be able to talk educatedly about those brands and feel it first-hand, to create excitement about those new hotel openings so that our customers want to try them — whether for business or leisure.

Ritz Carlton, the St Regis and W as well as AC, Moxy and Element. There’s going to be a lot of confusion from a customer perspective if we don’t do a clear job ourselves at being able to distinguish these brands. Our job as marketers is [figuring out] how we convey the depth and the breadth of that portfolio and all the experiences the customers can have — regardless of their trip purpose — in a way that resonates with them. RC: What’s your marketing focus going to be on? MB: Destinations and how we talk about them, as well as the experiences our customers have in those destinations, along with the service component they will receive at all these brands. The people they will come into contact with and the amenities we offer them will be part of the memories they keep for a lifetime. RC: What new initiatives will you be launching? MB: We are going to be rolling out a new campaign called “You are Here.” It will showcase the values of the destinations in the portfolio and use real Marriott Reward customers in the advertising to deliver that message in a way that’s compelling and that will help customers around the globe picture themselves in those destinations. The focus is on driving our customers to our direct channels where they will get absolutely the best rate. That’s a message we’ve been talking about a lot when you book on Marriott.com or Starwood.com

MICHELLE BOZOKI, VP MARKETING RC: How will the marketing of the Marriott portfolio of brands now change? Michelle Bozoki: Now that we have an unprecedented opportunity to talk about this expanded portfolio, we essentially have product in the luxury and lifestyle space that are importantto communicate — brands such as the 22

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We are also going to be looking at how we develop key partnerships in the destinations — partnerships that are both global in nature but also localized and relevant, such as Hockey Canada or Maple Leaf Sports and Entertainment, partnerships we’re developing to spread that portfolio message. We are also working closely with key influencers around the globe who are relevant to our nextgeneration travellers so we can talk

about these experiences in a way that will be compelling. We’ll be working with loyalty bloggers as well who will help spread the word about loyalty programs. In particular, in Canada, we’ve had some great success working with some of the top bloggers who have been helping us to really talk about all the new benefits that come with these programs and the ability to link them together. We are really excited about this campaign because it’s the first time we’ve given voice to our customers by using actual Marriott Rewards members to share their stories. Some of their stories will be featured in (online travel magazine) Marriott Traveler as some future ads. The whole idea with this campaign is that we will target the emotional power of travel through the eyes and hearts of actual travellers so we can make that connection with people. So whether they are sitting at home and watching a commercial on TV, on an airplane going through a magazine, or in their social channels― wherever they are seeing this, they can really picture themselves there. RC: Is there anything else that is new in the marketing department? MB: We’ve got some real cool things we are doing on the innovations side that will be relevant to the nextgeneration traveller. You may not be aware of what’s been done in the movie-making business in recent years [where they’ve] developed some short films that focus on destinations and experiences, and showcase hotels as a backdrop to those expectations. That effort has generated millions and millions of impressions around the globe. We’ve started using captivating and eye-catching techniques in our advertising such as cinema graphics so we can start to stand out from the crowd. We’ve been successful in doing that and getting those headlines and making that connection so we have to expand that effort so our customers in Canada will start to see some of that in the market as well.  hoteliermagazine.com


the delay is that as we kept getting pushed back, the plan got sharper and broader. We came out with a strong communications platform that, from day one, let everybody know (Marriott associates, former Starwood associates) this is what’s going to happen to you on day one; here are frequently asked questions. And we did it by discipline: operations, HR, benefits.

MARISA MILTON, VP HUMAN RESOURCES RC: How has the acquisition affected the company from an HR point of view? Marisa Milton: From a hotel perspec-

tive, and that applies across the Americas, there’s no impact. We’re still running our hotels. Above property, there is some duplication. We are at the stage of the integration process now where everyone, as of legal close, had a job and was brought on — some for a temporary time, and those positions will go away for approximately five or six people. For another group of people, there are positions that will probably go away sometime in 2017 or 2018. But, as we grow, and as we create roles here in Canada and in headquarters, we’re looking at Starwood talent. It’s obviously very strong talent; that’s why we bought the company, to fill some of those roles. We’ve already, in the short wave of hiring we’ve done, extended offers to three of the folks who were in above-property roles here, which was a pretty small team to begin with. It’s around 20 people we’re talking about that are truly above property and had some sort of regional role. RC: What kinds of challenges do you foresee in bringing the two brands together, from an HR point of view? MM: When we started out, we did an

extraordinary amount of planning. Probably, the only good thing about hoteliermagazine.com

Despite some concerns, once we got into these hotels, we realized the culture was similar. From the outside, I always thought of [Starwood] as a brand company. In terms of Marriott, we’re known for putting people first and taking care of the associate and the associate takes care of the guest, and the guest will come back again and again. When we got into these hotels, they had such a strong commitment to taking care of their people. RC: Do you have a timeline in terms of the HR-integration process? MM: It varies depending on where you are in the Americas. For Canada, the first thing we already did is blend our associate discount rate because we wanted to make sure people got something good before all that nittygritty integration stuff starts. From an HR perspective, that was the first chore for HR as a combined company to make sure everybody understood what that benefit was, how to use it, what card you needed to show, what they need to know at the hotels and everybody was trained on that.

What we’re going to be doing moving forward is what I call an HRMS (HR management systems). That’s looking at things such as people’s employee I.D., making sure they can actually have access to all of the systems they need to. We hope to do that within the first six months after close. Then, within the six-tonine-month phase, we’ll be looking to merge our recruiting systems and associate-engagement tools. Then, the big piece is harmonizing our compensation and benefits.

RC: How many associates do you now have in Canada with the integrated company? MM: Of the folks who are actually our

associates, there are about 22,000. If you look at people who aren’t our associates, who fly under a flag, it’s about 35,000 — that includes the franchised hotels. RC: In terms of the integration, how long will it take? MM: It’s a multi-year plan. We want to have the core systems and everything done within 12 to 18 months. But, in previous roles I’ve had with the company, when we bought Gaylord or The Ritz Carlton, you realize there are remnants that hang out there for a long time.

We’re really proud as a company that we got the rewards programs together for our customers at day one. RC: What is the biggest challenge you face in this process? MM: The biggest challenge is the harmonization of the systems and our total rewards because that is intertwined. If you’re looking at sales and how your sellers outreach and how they’re compensated and motivated — you want to make sure that’s aligned. You want to make sure everybody is on one page. RC: I would imagine that, for years, people who worked for Starwood and Marriott saw each other as rivals. Now they’re on the same team. Does that create challenges? MM: Maybe it’s just the whimsy of

post-close, because we had delays for so long, the people in the hotels are so excited to be a part of two companies that they really respect coming together. And it’s not to toot our own horn, but we’re a great company. We have a great reputation. Starwood is a great company and had a great reputation. Maybe it would have been different if there had been another buyer for them but people are really excited. JANUARY/FEBRUARY 2017 HOTELIER

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MANLIO MARESCOTTI, AVP DEVELOPMENT, EAST & RYAN MCRAE, AVP DEVELOPMENT, WEST RC: Where will your growth and expansion come from? Manlio Marescotti: If you look at where we were in 2010 in terms of the number of properties, we’ve grown 50 per cent just with the Marriott legacy brands, over five years, from 2010 to 2015. On top of that, we’ve added Delta, which would have been an incremental 35, so giving us a combined total of 129 at the end of 2015. Now, when we add the Starwood brands and you look forward as to what we have from a growth potential [perspective], next year we’ll probably be close to two dozen openings.

We are doing some full-service openings and we’ll probably have, out of the 25, about eight that are full service, of which half are going to be Delta’s. On the Starwood side, we’ve probably got two or three openings, which are going to be Four Points, primarily. And then we have four other big, full-service hotels, a couple of Autographs, a Marriott full service and a JW. RC: In which areas of the country are you targeting growth? RM: There are only so many major metropolitan areas we can look to. There are a lot of good conversion opportunities for full-service suburban hotels right now. And in the resort markets as well, we’re seeing some 24

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good opportunities with Delta, both in Ontario and in the Western resort markets. That’s a market segment that had not traditionally benefited from branding and has now reached out to us saying ‘we see the benefits going on in the cities and in the more traditional business transient areas — how do we bring our property into that system?’

it’s not as if there’s a whole bunch of ownership groups we haven’t dealt with before — they already have a relationship with us. They may have had properties with Starwood in a smaller number and no properties with Marriott, but we have that relationship so we’ll continue that.

MM: For Delta, it has a niche within the Marriott portfolio of brands. You could say, you have 30 brands, how does that all work? Well, we have well-defined swim lanes and with the Delta brand, it’s really about that flexible, full-service brand. We will go in and look at a conversion opportunity and if they have bathtubs, for example, they can keep a bathtub. If they have PTAC (Packaged Terminal Air Conditioning) units, we can keep them as PTAC units. That would not be the case with a Marriott brand or a Renaissance. There is that ability, but as you look at it, those full-service boxes might have a food-and-beverage operation or large meeting space so they don’t really lend themselves to what we would consider a stereotypical choreography.

RC: In terms of what’s going on in Western Canada, has that curtailed expansion?

RC: How similar is the franchising model for both companies in terms of integrating the Starwood model and the Marriott model? MM: They’re fairly similar. What

we’re looking at right now is there’s no expectation in the short term to change that fee structure. It’s certainly something you would look at and ask “is there a better structure that would make it more uniform across all the brands?” But if someone has negotiated a deal with Starwood, we would obviously honour that, continue on that basis. The basic approach to franchising has always been the same between the two companies, in terms of the support we provide to the owners. We’ve always had a very transparent and open relationship with owners and that will continue. The Canadian industry is fairly small, so

RM: Definitely, although there are a

lot of groups who have been through cycles before in resource markets, whether it’s Saskatchewan or Alberta. We’ve approved new deals recently in Edmonton and Calgary, where operating performance of those markets is down relative to three years ago. But construction costs are also advantageous right now. If they’re looking to develop a hotel now that won’t be opening for another 24 months, will they be timing the cycle as such that they’re building at the lowest cost base but exiting in a solid operatingperformance market? That has impacted things and the types of products people are looking at … I don’t want to say flight-to-quality is overused, but people know they’re going to be developing a hotel, that’s part of their site and, given the challenges in the market, they want to align with the best platform. Previously, they might have had a short list of three or four groups. Now, they’re really just saying if we’re going to do a hotel, we’re only going to be doing a Marriott, because they have the best systems and the best backing to support us through these tough times. RC: Is there crossover between owners involved with both brands? MM: Yes. As an owner, now they’ve got more opportunities. If they like the Marriott system, now all of a sudden, if they want to find — or if they have — a site that is more suitable for a lifestyle [brand] hoteliermagazine.com


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because it’s more urban, more hip, then we can give them choices that maybe we were not able to [before], or that weren’t as perfect. We were able to work with them, but now we’ve really been able to give them even more options and find the right brand, the right option for them. RC: In terms of the brands you don’t currently have in Canada, are there plans to grow any of those? MM: We certainly feel there’s an

opportunity to bring in new brands as well as continue to grow some of the existing brands. We’re going to open our first AC Hotel in Montreal next year. It’s the right market, it’s the right partners, so it will be a great product. That will be a great start for us. We think there’s opportunity, if you look at the Starwood brands — with Aloft and Element — to continue to grow that. If you look at Tribute, we’ve got the one in Quebec City; we can continue to grow that.

ROZ WINEGRAD, VP FRANCHISE OPERATIONS RC: What is the total number of properties now franchised in Canada? Roz Winegrad: In Canada, we have 161 franchised hotels out of 200-plus hotels. Of those 160-plus, we have about 100 [operated by] management companies. RC: How will the acquisition change the way franchising is done? 26

JANUARY/FEBRUARY 2017 HOTELIER

RW: We’re going to be consistent

with the hotel-management companies. We share many of the same management companies [though] one-third of them will be new to us. Our approach is very similar. We go out and meet with every single management company and try to see as many of their hotels as possible. We are very much a relationship driven organization. We will sit with any new management company or franchisee and talk about our operating philosophy — we’ve done that since April and we will continue to do that until Q1 2017. From a deployment perspective, I’ve just hired a second person on my team to support the account management. We’ll divide up the number of management companies; we’ll divide and conquer and be their sole point of contact for any issues. We also hired someone to support sales-and-marketing-revenue management who came from Starwood and had a senior role in North America... We’re [also] going to be implementing market meetings. In Canada, we’ve never had that take place for our franchisees. The shift is we’re not going to be in each hotel, we’re going to be in each market frequently throughout the year, bringing tools, resources, training and conference calls. We have a whole suite of support that will address the whole. RC: Now that you have 30 brands, how do you decide which is going to be more expandable from a franchise point of view? RW: We work very closely with devel-

opment and with our owners/operators and developers on the industry side. There are certain brands that are easy to grow, build and expand. Fairfield is a simple model to build and replicate and get out of the ground quickly with lower investments. From a Starwood perspective, there’s the Element and Aloft brands that people are very excited to expand in a scaleable way.

Canada is a unique market right now because the exchange rate for U.S developers is very favourable and there are so many markets that have the opportunity to bring in these branded products. If you compare the U.S. to Canada, the distribution in secondary and tertiary markets, in the U.S branded hotels are commonplace. It’s open territory in Canada, beyond primary markets. I would envision…every time there’s a hospital [in a town] there should be one of our hotels in the market at a minimum. We have the right number of brands [to suit] various needs. There’s huge opportunities for our brands across the country. RC: What’s the biggest challenge faced by the franchising team? RW: Making sure we bring the right partners who share our core values — not that we don’t today. We look at guest satisfaction scores and we have a group of owner/operators and third-party managers that are very committed to the same values we have. As we grow, we want to make sure we grow the right people because we want an efficient model...If we’re not careful, we could end up with a situation where our brands could be at risk. We have a great system right now where we screen every new operator…they come to us with experience for the most part ….they’re allowed to manage in our system. But there could be great Tim’s franchisees who have never operated in our system…so we have an 18-month program where they have to pass this program to be approved to run the hotel. We want to make sure they understand our systems and culture…Canada is not just an extension of the U.S. We have different needs and perspectives. By bringing the groups together, we are able to understand ...the community we’re building is powerful and has the foundation to really set the course for tremendous growth and success in Canada. u hoteliermagazine.com


THE 2017 FRANCHISE REPORT

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WHAT’S IN A NAME? Brand affiliation offers tangible benefits for hotel operators BY AMY BOSTOCK

Best Westerm

F

or hotels in today’s competitive climate, understanding the power of branding has never been more important. At a time when hotel companies are buying each other up and engaging in massive global branding efforts, Canadian hotels, all of which are

hoteliermagazine.com

competing for guests, are ramping up their efforts to demonstrate the business case for joining a brandedhotel family. “From the standpoint of a franchisee, first and foremost, [brand affiliation] gives them the access to technology and things that will drive their business,” says Brian Leon,

managing director, Franchise Growth and Administration, Choice Hotels Canada, citing reservations delivery as the number-1 consideration for franchisees. “Companies like ours have pretty robust central reservation systems that will drive a large proportion of our business to our franchisees. This year, more than 40 per cent of our franchisee’s revenue will come through our central reservations system.” Beyond that, he says, having a brand on a hotel provides a level of assurance to guests that they know what they can expect. “[Guests] become loyal to certain brands,” he says. “Good brands can help make a hotel appealing and attract as many guests as possible.” According to Sandra Cordova Micek, global senior vice-president of Brands for Hyatt, “A hotel that’s part of the Hyatt portfolio benefits from the trust and reassurance that our Hyatt name provides. Each Hyatt brand is designed to meet the needs of a specific high-end traveller.” Aligning themselves with a brand gives franchisees a leg-up from independent properties, says Ron Pohl, senior vice-president of Brand Management at Best Western Hotels & Resorts, while providing the opportunity to get the customer in the door. “You want your product to motivate the guest to try your property; but it’s just the first step — if you get them in the door, you have to communicate the brand promise and experience — that’s really were the brand has to step in and establish service standards and overall experience so customers leave JANUARY/FEBRUARY 2017 HOTELIER

27


Choice Hotels Canada

12 weeks’ because the pace of change is so dramatic. The competition is significantly different and everything is happening electronically/digitally — you don’ have the pleasure of time to work through different initiatives, you have to get it done now and move on.” SETTING STANDARDS

with a positive impression.” Then, says Pohl, operators can begin to build a relationship with guests and move to potential loyalty where they become an advocate of the brand. “That’s what brand does today — gives [franchisees] the opportunity to convince the customer to try the product.” BENEFITS OF BRANDING

Leon says he’s seen an increase in the importance of loyalty programs, which he says is another reason for franchisees to choose a branded hotel. “People booking travel are very focused on being part of a loyalty program that gives points and benefits they wouldn’t get if they were patronizing a non-brand property,” he explains. For example, says Cordova Micek, Hyatt’s loyalty program, Hyatt Gold Passport (to be World of Hyatt as of March 2017) offers hotel owners marketing, distribution network, technology, and backend infrastructure support, thereby driving brand preference and increasing revenue and profitability. Technology is touching all aspects of the hotel industry, posing a challenge for independent properties that may not have the budget and support to keep up. “The business has become so complex that we find it’s next to impossible for an independent operator to be able to navigate through all of the technological issues and opportunities that they’ve got 28

JANUARY/FEBRUARY 2017 HOTELIER

facing them when operating a hotel,” says Leon. Products such as mobile booking, which Leon cites as one of the largest areas of growth in the way people book hotel rooms. “It used to be everyone talked about booking on the Internet, but that’s almost old news now,” he says. “You can get an independent hotel that might be able to create a decent website, but then you look at ‘is there really good functionality for that website from a mobile or tablet standpoint? Is it userfriendly?’ To make it user-friendly is not a simple or inexpensive thing to do and for an independent hotel it can be very challenging.” Access to industry-leading technology is one of the most important things that hotels will get from brand affiliation, he says, especially as the millennial demographic continues to drive innovation. “This is the first time in my time in hotels that we’ve seen a shift from baby boomers to millennials,” says Pohl. “It is a huge demographic shift, so we have to be cognizant of that; their expectations are different.” Probably more concerning, he says, is the pace of this change. “As a brand, you have to be able to react quickly. Before, you could look at an initiative and say ‘you know what, let’s create focus groups, let’s review this initiative and we’ll roll it out in 12 months.’ Now it’s ‘let’s roll it out in

According to Pohl, brand is all about building consumer confidence — guests need to know that they’re going to get what they expect when they use that product. Best Western has spent 70 years building a strong reputation of being a friendly brand that offers great value. But, he cautions, brand has to be fluid. “It has to evolve. You have to keep some of your core brand promise behind all of it — good value, good service — but what dictates what makes good service and brand standards is all driven by the consumer.” With 60 per cent of its business being conversion properties, Leon says Choice Hotels has to deal with different structures, different room sizes and other components. “The challenge as a brand is how you weave that together into something that provides brand consistency but also reflects the fact that we are dealing with different types of assets.” He says brands need to identify what the really important — from a guest standpoint — non-negotiable brand standards are so “when a guest walks into your hotel, how do you make sure you’ve got that consistency while also recognizing that all the assets aren’t going to be identical based on the nature of the business.” Increasingly, Leon says he is finding, people have a preference to the local experience. “They don’t want to see cookie-cutter hotels with local components. That’s something a lot of the brands are dealing with both by incorporating their standards and providing opportunities for the hotels to do things that will incorporate the local community/demand, and by creating programs such as the Ascend Hotel Collection that is all about the local experience.” The Ascend Collection, he says, was designed to all be different but still have access to the same hoteliermagazine.com


loyalty programs, revenue management and central reservation. With this increased emphasis on local experiences, Pohl says owners can still have their independence — and offer unique experiences — and be tied to a brand. “Most of the brands do it through soft branding but we do it through our core brands,” he explains. “You won’t have the same product experience at every Best Western or every Best Western Plus or Premier hotel. There’s a great way to provide a unique experience for each of our properties based on that location and we want hotels to use that as a differentiator.” That said, Pohl is adamant that hotels have to choose, as a brand, what they’re going to be known for, or good at, and then try to consistently communicate that to the guests. BRAND OVERLOAD

With all the brands available, how do hotels keep from getting lost in the shuffle? “One of the things we see

happening in the industry is there are so many brands that there’s potential for it to become confusing to guests because they can’t keep track of them all,” says Leon. “You can get to the point where lines blur between the brands.” As a result, in a market like Canada, where global hotel systems are introducing, over the span of a few years, a number of brands that all seem similar, it can become challenging to find opportunities to grow them and to get hotel developers on side with the idea of investing in new brands they aren’t familiar with. “The flipside is that it’s so important in our business to continually evolve and develop things that will be appealing to the consumer base we’re looking forward to being our patrons in the future (i.e. millennials),” says Leon. “The brands and the hotel systems are looking for ways to be able to make sure we adapt our offerings to appeal to the changing demographics.” Pohl says Canada likes new brands. “It’s a bit challenging right

now economically, so we’re seeing a bit of a slowdown in some markets but again, in key markets such as Vancouver, Toronto, Montreal and even around Calgary, we’re seeing some very strong development. Most product is new although we are seeing some repurposing.” For Hyatt, the push is on to become an even stronger brand-led organization. “We will continue to further differentiate our brands to better meet the needs of our guests and customers around the world,” says Cordova Micek. “This allows us to remain committed to purposeful and meaningful growth and each brand provides the company with a new and exciting way to grow our offerings in desirable destinations we know our guests love, beyond traditional hotel stays and in high-barrier to entry markets. Each brand gives us a new way to meet the needs of the market, a new way to grow, and a new way to deliver on the high-quality service for which we are known.” u

Congratulations to Superior Lodging Corp. on winning the 2016 Pinnacle Award for “Hotel Company of the Year.” We are proud to serve as trusted advisors, offering in-depth knowledge of, and support to, the hospitality industry across Canada and around the world.

Dentons. Now the world’s largest global elite law firm.*

The reviews are in and customers love our mattresses!

“Nice hotel. GREAT BED” Hotel is as you would expect from a big chain. Clean well maintained and friendly. Nothing bad to report, we enjoyed our stay. Bed was also super comfy.

dentons.com © 2016 Dentons. Dentons is a global legal practice providing client services worldwide through its member firms and affiliates. Please see dentons.com for Legal Notices. *Acritas Global Elite Law Firm Brand Index 2013−2016.

- Customer Review of Courtyard Toronto, Downtown - Trip Advisor, October 2016

Contact your local Serta Hospitality Representative for more information Ontario - contact Christine Pella at cpella@sertanational.com Central & Western Canada - contact Graham Hall at ghall@sertanational.com Eastern Canada - contact Yan Hurtubise at yhurtubise@serta.com


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MADE IN CANADA

BIG, BOLD, AND BOUNTIFUL A YEAR-LONG PHOTO CONTEST

TO HELP CELEBRATE CANADA’S 150TH BIRTHDAY To coincide with Canada’s 150th birthday, KML readers are invited to tap into their creative side by entering the “Made-in-Canada” photo contest. Throughout 2017, readers can snap pictures of various iconic products, ingredients, menu dishes as well as hotels and resorts that reflect a Canadian sensibility and provide a visual perspective on what this country is all about. Each month a judging panel comprised of the F&H and Hotelier editorial teams, photographers, contest sponsors, editorial board members and graphic designers will choose a total of 10 photos that reflect strong composition, exposure and focus while adhering to a Canadian theme. By the end of 2017, the magazines will have a collection of 150 images from which to choose 10 “Grand Winners,” whose submissions will be featured in the December issue of both F&H and Hotelier magazine.

Winners will be announced and fêted at 2017 December Pinnacle Awards Luncheon.

UPLOAD YOUR PHOTO:

#KMLMadeinCanada

or email jporter@kostuchmedia.com

Submit pictures in the following categories: • Food: appetizers (soups, salads); entrées, proteins,veggies, fruits, desserts • Drinks, cocktails, wines, beers • Ingredients: spices, herbs, maple syrup, et cetera • Iconic restaurants, iconic hotels and resorts, attractions • Hotel Rooms, lobby spaces, guestrooms, suites, bars • Personalities: Chefs, hoteliers, farmers/ producers/suppliers.

For Contest Rules and Regulations visit hoteliermagazine.com/ madeincanada

SPONSORS


THE 2017 FRANCHISE REPORT AC HOTELS

MARRIOTT INTERNATIONAL, INC. 2425 Matheson Blvd. E., Ste. 100 Mississauga, ON L4W 5K4 905-366-5208 marriottdevelopment.com AVP, Lodging Development, Canada: Manlio Marescotti AVP, Lodging Development, Canada: Ryan McRae History, Plans - first AC Hotel opened in 1998 - no properties in Canada; 94 outside of Canada - plans to open two units in Canada by the end of 2017 Franchise Costs - initial franchise fee US$75,000 or US$500/room, whichever is greater - royalty fee 5.5% GRR - marketing fee 2.5% GRR Services - advertising/marketing - design - management - purchasing - staff training - supplies

ALOFT HOTELS

MARRIOTT INTERNATIONAL, INC. 2425 Matheson Blvd. E., Ste. 100 Mississauga, ON L4W 5K4 905-366-5208 marriottdevelopment.com AVP, Lodging Development, Canada: Manlio Marescotti AVP, Lodging Development, Canada: Ryan McRae History, Plans - three properties in Canada; 110 outside of Canada Franchise Costs - initial franchise fee US$60,000, plus $450 per key in excess of 150 keys - SPG 5% folio (4.2% blended assessment) - license fee 5.5% GRR - program fee 4% GRR Services - advertising/marketing - design - management - purchasing - site location - site review and analysis - staff training - supplies

hoteliermagazine.com

ASCEND HOTEL COLLECTION

CHOICE HOTELS CANADA INC. 5090 Explorer Dr., Ste. 500 Mississauga, ON L4W 4T9 905-206-7316 choicehotels.ca Managing director: Brian Leon

- total investment $87,452 to $6,221,382 - marketing fee 3.5% of GRR: consists of marketing contribution of 2% of GRR and basic reservation fee of 1.5% of GRR.

Franchise Costs History, Plans - royalty fee 5% GRR - established in 2008 in Canada - 12 properties in Canada; 163 outside of Canada (all franchised) Services - advertising/marketing - design Franchise Costs - financial assistance available - initial franchise fee $30,000 - purchasing - advertising fee 1.25% - staff training - royalty fee 4% - supplies - reservation fee 1.25% Services - advertising/marketing - design - staff training - supplies

AUTOGRAPH COLLECTION

MARRIOTT INTERNATIONAL, INC. 2425 Matheson Blvd. E., Ste. 100 Mississauga, ON L4W 5K4 905-366-5208 marriottdevelopment.com AVP, Lodging Development, Canada: Manlio Marescotti AVP, Lodging Development, Canada: Ryan McRae

BEST WESTERN HOTELS & RESORTS

6557 Mississauga Rd., Unit D Meadowvale Ct. 1 Mississauga, ON L5N 1A6 905-816-4787 bestwestern.com President: David Kong VP, Owner Relations: Michael Morton

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Franchise Costs - initial franchise fee $60,000 - royalty fee 5% GRR - system distribution fee 4% GRR - advertising/marketing - design - site location - staff training - supplies

CANADAS BEST VALUE INN

RED LION HOTELS CORPORATE 201 W. North River Dr., Ste. 100 Spokane, WA 99201 877-311-2378 x 143 www.joinrlhc.com president & CEO: Greg Mount EVP, President of Global Development: Roger Bloss History, Plans - established in 1999 in Coral Springs, Fla. - 29 properties in Canada (all franchised); 900 Americas Best Value Inn properties outside Canada

Franchise Costs - initial franchise fee and appli- cation fee $11,500 for up to 50 History, Plans - established in 1946 in Long rooms; 51+ rooms: $150 per room (one-time fee) Beach, Calif. - 202 properties in Canada; 3,544 - marketing fee $16/room/month ($600 monthly minimum) outside of Canada - monthly fees: first 50 rooms $21.50/room/month; 51to 75 Franchise Costs History, Plans rooms $17.50/room/month; - first Autograph property opened - initial franchise fee $46,000 minimum, plus $200/room 76+ rooms $16.50/room/month in 2010 ($860 monthly minimum) - two properties in Canada; 103 for properties with more than 50 rooms outside of Canada - plans to open three units in - marketing fee $12.30/room/ Services - advertising month Canada by the end of 2017 - design - royalty fee $1.44/room/day - financial assistance available Franchise Costs - lease negotiation Services - available upon request - management - advertising/marketing - purchasing - design Services - site location - other - advertising/marketing - staff training - purchasing - design - supplies - site location - management - staff training - purchasing - supplies CANDLEWOOD SUITES - staff training INTERCONTINENTAL HOTELS - supplies GROUP (IHG) CAMBRIA SUITES 2 Robert Speck Parkway, Ste. 600 CHOICE HOTELS INTERNATIONAL BAYMONT Mississauga, ON L4Z 1H8 1 Choice Hotels Circle, Ste. 400 WYNDHAM HOTEL GROUP 416-675-6644 Rockville, MD 20850 22 Sylvan Way ihg.com 800-547-0007 Parsippany, NJ 07054 Regional Director, Midscale choicehotelsfranchise.com 973-753-6000 Franchise Sales & Development, President & CEO, Choice Hotels Executive vice-president and Canada: Stuart Laurie International: Stephen P. Joyce Chief Development Officer: VP, Franchise Development: Chip Ohlsson History, Plans Mark Shalala - established in 1995 History, Plans - two franchised properties in History, Plans - established in 1974 Canada; 352 outside of Canada - founded in 2007 - one property in Canada (all - plans to add two properties franchised); 424 outside of - no properties in Canada; 25 outside of Canada (all franchised) in Canada Canada - initial franchise fee $26,000 conversion or $27,500 new JANUARY/FEBRUARY 2017 HOTELIER

31


THE 2017 FRANCHISE REPORT Franchise Costs - total investment $7,846,008 to $10,678,273 - royalty fee 5% GSR - marketing fee 2.5% GSR (combined reservations and marketing fee) - application fee $500 per guest- room ($50,000 minimum)

Services - advertising/marketing - design - lease negotiation - management - purchasing - site location - staff training - supplies

Services - advertising/marketing - design - management - other - site location - staff training - supplies

COMFORT

CLARION

CHOICE HOTELS CANADA INC. 5090 Explorer Dr., Ste. 500 Mississauga, ON L4W 4T9 905-206-7316 choicehotels.ca Managing director: Brian Leon

CHOICE HOTELS CANADA INC. 5090 Explorer Dr., Ste. 500 Mississauga, ON L4W 4T9 905-206-7316 choicehotels.ca Managing director: Brian Leon

History, Plans - established in 1972 in Gold River/Tahasis, B.C. - 28 properties in Canada; 10 out- side of Canada (28 franchised) - continued expansion planned in Western Canada Franchise Costs - initial franchise fee $100 per room, $10,000 minimum - advertising fee 2% - distribution fee 1.5% - royalty fee 2% - other fees 0.75%

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COUNTRY INNS & SUITES BY CARLSON

CROWNE PLAZA HOTELS & RESORTS

History, Plans - established in 1986 in Minneapolis, Minn. - seven properties in Canada; 475 outside of Canada (468 are franchised) - plans to open a new property in Belleville, Ont.

History, Plans - established in 1983 - eight franchised properties in Canada; 393 outside of Canada - plans to add one property in Canada

CARLSON REZIDOR HOTEL GROUP 701 Carlson Parkway, MS8254 Minnetonka, MN 55305 763-212-3475 countryinns.com Senior vice-president, Operations: Jeffrey Freund Senior vice-president, Development: Fred Schwartz

History, Plans - established in 1998 in Canada - 146 properties in Canada; 1,643 outside of Canada (all franchised) Franchise Costs - initial franchise fee US$50,000 Franchise Costs - total cost US$6,526,242 to - initial franchise fee $40,000 $7,714,408 - advertising fee 1.3% - royalty fee 5% - royalty fee 5% - advertising fee 2.5% - reservation fee 1.75% - distribution fee 1.5%

History, Plans - established in 1987 in Canada - 7 properties in Canada; 308 out- Services side of Canada (all franchised) - advertising/marketing - design Franchise Costs - staff training - initial franchise fee $35,000 - supplies - advertising fee 1.25% - royalty fee 2.5% COMFORT SUITES - reservation fee 1.25% CHOICE HOTELS CANADA INC. 5090 Explorer Dr., Ste. 500 Services Mississauga, ON L4W 4T9 - advertising/marketing 905-206-7316 - design choicehotels.ca - staff training Managing director: Brian Leon - supplies History, Plans COAST HOTELS - established in 1998 in Canada APA HOTEL GROUP - 5 properties in Canada; 587 out- 1090 W. Georgia St., Ste. 900 side of Canada (all franchised) Vancouver, BC V6E 3V7 604-682-7982 Franchise Costs coasthotels.com - initial franchise fee $50,000 Senior executive director, - advertising fee 1.3% Development & Revenue - royalty fee 5% Strategy: Mark Hope - reservation fee 1.75% Services - advertising/marketing - design - staff training - supplies

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INTERCONTINENTAL HOTELS GROUP (IHG) 2 Robert Speck Parkway, Ste. 600 Mississauga, ON L4Z 1H8 416-675-6644 ihg.com Regional director, Midscale Franchise Sales & Development, Canada: Stuart Laurie

Franchise Costs - total investment $24,442,450 to $52,542,645 - royalty fee 5% GRR - marketing fee 3% GRR - application fee $500/guestroom, $75,000 minimum Services - advertising/marketing - design - management - other - site location - staff training - supplies

Services - advertising/marketing - design - management - purchasing - staff training - supplies

DAYS INNS, HOTELS, SUITES

COURTYARD BY MARRIOTT

DAYS INNS - CANADA MASTER FRANCHISOR IN CANADA REALSTAR HOTEL SERVICES CORP., DIVISION OF REALSTAR HOSPITALITY (WYNDHAM HOTEL GROUP) 77 Bloor St. W., Ste. 2000 Toronto, ON M5S 1M2 416-966-8387 daysinn.ca President and COO: Irwin Prince

History, Plans - established in 1983 - 26 properties in Canada; 1,053 outside of Canada - plans to open 7 units in Canada by the end of 2017

History, Plans - Days Hotel was established in 1998; Days Inn was established in 1992 - 110-plus franchised properties in Canada; 1,790-plus outside of Canada - plans to add eight properties in Canada

MARRIOTT INTERNATIONAL, INC. 2425 Matheson Blvd. E., Ste. 100 Mississauga, ON L4W 5K4 905-366-5208 marriottdevelopment.com AVP, Lodging Development, Canada: Manlio Marescotti AVP, Lodging Development, Canada: Ryan McRae

Franchise Costs - initial franchise fee US$75,000 or US$500/room, whichever is greater - royalty fee 6.0% GRR - marketing fee 2% GRR Services - advertising/marketing - design - management - purchasing - staff training - supplies

Franchise Costs - initial franchise fee $350 per room, minimum $35,000 - royalty fee 6.5% - reservations fee 2.3%

JANUARY/FEBRUARY 2017 HOTELIER

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THE 2017 FRANCHISE REPORT

Services - advertising/marketing - design - global reservations - national sales network - operational support - purchasing - site review and analysis - staff training - tradeshow representation

DELTA HOTELS AND RESORTS

MARRIOTT INTERNATIONAL, INC. 2425 Matheson Blvd., Ste. 100 Mississauga, ON L4W 5K4 905-366-5208 marriottdevelopment.com AVP, Lodging Development, Canada: Manlio Marescotti AVP, Lodging Development, Canada: Ryan McRae History, Plans - acquired Delta Hotels and Resorts in 2015 - 35 properties in Canada; two outside of Canada - plans to open four units in Canada by the end of 2017 Franchise Costs - available upon request Services - advertising/marketing - design - management - purchasing - staff training - supplies

DOUBLETREE BY HILTON

HILTON WORLDWIDE INC. 7930 Jones Branch Dr. McLean, VA 22102 703-883-1000 hiltonworldwide.com/development President & CEO: Christopher Nassetta Senior director, Development, Canada: Jeff Cury History, Plans - established in 1989 - nine properties in Canada (all franchised); 466 outside of Canada Franchise Costs - initial franchise fee $75,000 (USD) for the first 250 rooms, plus $400 per additional room - royalty fee 5% monthly GRR

34

Services - advertising/marketing - design - Hilton HHonors guest-reward program - management - purchasing - site location - staff training - supplies

EMBASSY SUITES BY HILTON

FAIRFIELD INN & SUITES

ECONO LODGE

History, Plans - established in 1983 - two properties in Canada (fran- chised); 230 outside of Canada

History, Plans - established 1987 - 21 properties in Canada; 791 outside of Canada - plans to open five units in Canada by the end of 2017

CHOICE HOTELS CANADA INC. 5090 Explorer Dr., Ste. 500 Mississauga, ON L4W 4T9 905-206-7316 choicehotels.ca Managing director: Brian Leon

HILTON WORLDWIDE INC. 7930 Jones Branch Dr. McLean, VA 22102 703-883-1000 hiltonworldwide.com/development President & CEO: Christopher Nassetta Senior director, Development, Canada: Jeff Cury

MARRIOTT INTERNATIONAL, INC. 2425 Matheson Blvd. E., Ste. 100 Mississauga, ON L4W 5K4 905-366-5208 marriottdevelopment.com AVP, Lodging Development, Canada: Manlio Marescotti AVP, Lodging Development, Canada: Ryan McRae

Franchise Costs - initial franchise fee $75,000 (USD) for the first 250 rooms, Franchise Costs History, Plans plus $400 per additional room - initial franchise fee US$50,000 - established in 1993 in Canada - royalty fee 3.5% year one; 4.5% or US$400 per room, whichever - 51 properties in Canada; 926 year two; 5.5% year three and is greater* outside of Canada (all franchised) thereafter (monthly GRR) - royalty fee 5.5% GRR - marketing fee 2.5% GRR Franchise Costs Services *Subject to Canadian - initial franchise fee $25,000 - advertising/marketing Development Incentive Program - advertising fee 1.3% - design - distribution fee 4% - Hilton HHonors guest-reward Services - reservation fee 1.75% program - advertising/marketing - management - design Services - purchasing - management - advertising/marketing - site location - purchasing - design - staff training - staff training - staff training - supplies - supplies - supplies

ELEMENT HOTELS

MARRIOTT INTERNATIONAL, INC. 2425 Matheson Blvd., Ste. 100 Mississauga, ON L4W 5K4 905-366-5208 marriottdevelopment.com AVP, Lodging Development, Canada: Manlio Marescotti AVP, Lodging Development, Canada: Ryan McRae History, Plans - two properties in Canada, 20 outside of Canada - plans to open three units in Canada by the end of 2017 Franchise Costs - initial franchise fee US$60,000, plus $450 per key in excess of 150 keys - SPG 5% folio (4.2% blended assessment) - license fee 5.5% GRR - program fee 4% GRR Services - advertising/marketing - design - management - purchasing - staff training - supplies

JANUARY/FEBRUARY 2017 HOTELIER

EXECUTIVE HOTELS & RESORTS FOUR POINTS BY SHERATON 1080 Howe St., 8th Floor Vancouver, BC V6Z 2T1 604-642-5250 executivehotels.net President: Salim Sayani

History, Plans - established in 1986 in Vancouver - 13 properties in Canada; three outside of Canada Franchise Costs - available upon request Services - advertising/marketing - design - lease negotiation - management - purchasing - site location - staff training - supplies

MARRIOTT INTERNATIONAL, INC. 2425 Matheson Blvd. E., Ste. 100 Mississauga, ON L4W 5K4 905-366-5208 marriottdevelopment.com AVP, Lodging Development, Canada: Manlio Marescotti AVP, Lodging Development, Canada: Ryan McRae History, Plans - 31 properties in Canada; 193 outside of Canada - plans to open five units in Canada by end of 2017 Franchise Costs - initial franchise fee US$60,000 plus $450 per key in excess of 150 keys - SPG 5% folio (4.2% blended assessment) - licence fee 5.5% GRR - program fee 4% GRR Services - advertising/marketing - design - management - purchasing - staff training - supplies

hoteliermagazine.com


THE 2017 FRANCHISE REPORT HAMPTON BY HILTON

HILTON WORLDWIDE INC. 7930 Jones Branch Dr. McLean, VA 22102 703-883-1000 hiltonworldwide.com/development President & CEO: Christopher Nassetta Senior director, Development, Canada: Jeff Cury

HILTON HOTELS & RESORTS

HILTON WORLDWIDE INC. 7930 Jones Branch Dr. McLean, VA 22102 703-883-1000 hiltonworldwide.com/development president & CEO: Christopher Nassetta Senior director, Development, Canada: Jeff Cury

History, Plans - established in 1983 - 54 properties in Canada (52 franchised); 2,134 outside of Canada

History, Plans - established in 1919 in Texas - 13 properties in Canada (nine franchised); 557 outside of Canada

Franchise Costs - initial franchise fee $75,000 (USD) for the first 150 rooms, plus $400 per additional room - royalty fee 6% monthly GRR

Franchise Costs - initial franchise fee: $75,000 (USD) for the first 250 rooms, plus $400 per additional room - royalty fee 5% monthly GRR

Services - advertising/marketing - design - Hilton HHonors guest-reward program - management - purchasing - site location - staff training - supplies

Services - advertising/marketing - design - Hilton HHonors guest-reward program - management - purchasing - site location - staff training - supplies

HILTON GARDEN INN

HOLIDAY INN EXPRESS

HILTON WORLDWIDE INC. 7930 Jones Branch Dr. McLean, VA 22102 703-883-1000 hiltonworldwide.com/development President & CEO: Christopher Nassetta Senior director, Development, Canada: Jeff Cury History, Plans - established in 1996 - 20 properties in Canada (all franchised); 686 outside of Canada Franchise Costs - initial franchise fee: $75,000 (USD) for the first 150 rooms, plus $400 per additional room - royalty fee 5.5% monthly GRR Services - advertising/marketing - design - Hilton HHonors guest-reward program - management - purchasing - site location - staff training - supplies

hoteliermagazine.com

INTERCONTINENTAL HOTELS GROUP (IHG) 2 Robert Speck Parkway, Ste. 600 Mississauga, ON L4Z 1H8 416-675-6644 ihg.com Regional Director, Midscale Franchise Sales & Development, Canada: Stuart Laurie

HOLIDAY INN HOTELS & RESORTS

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HOMEWOOD SUITES BY HILTON

INTERCONTINENTAL HOTELS GROUP (IHG) 2 Robert Speck Parkway, Ste. 600 Mississauga, ON L4Z 1H8 416-675-6644 ihg.com Regional Director, Midscale Franchise Sales & Development, Canada: Stuart Laurie History, Plans - established in 1952 - 61 franchised properties in Canada; 1,138 outside of Canada - plans to add five units in Canada

HILTON WORLDWIDE INC. 7930 Jones Branch Dr. McLean, VA 22102 703-883-1000 hiltonworldwide.com/development President & CEO: Christopher Nassetta Senior director, Development, Canada: Jeff Cury History, Plans - established in 1988 - 16 properties in Canada (15 franchised); 398 outside of Canada

Franchise Costs - initial franchise fee $75,000 (USD) for the first 150 rooms, Franchise Costs - total investment $13,368,538 to plus $400 per additional room - royalty fee 3.5% year one; 4.5% $24,873,125 year two; 5.5% year three and - royalty fee 5% GRR thereafter monthly GRR - marketing fee 3% GRR - application fee $500 per guest Services room, $50,000 minimum - advertising/marketing - design Services - Hilton HHonors guest-reward - advertising/marketing program - design - management - management - purchasing - other - site location - site location - staff training - staff training - supplies - supplies

HOME2 SUITES BY HILTON

HILTON WORLDWIDE INC. 7930 Jones Branch Dr. McLean, VA 22102 703-883-1000 hiltonworldwide.com/development President & CEO: Christopher Nassetta Senior director, Development, Canada: Jeff Cury

History, Plans - established in 1991 - 93 franchised properties in History, Plans Canada; 2,376 outside of Canada - established in 2009 - plans to add 19 units in Canada - three franchised properties in Canada (all franchised); 113 Franchise Costs outside of Canada - total investment $7,530,521 to $10,553,775 Franchise Costs - royalty fee 6% GRR - $75,000 (USD) flat franchise fee - marketing fee 3% GRR - royalty fee 5% monthly GRR - application fee $500 per guest room, $50,000 minimum Services - advertising/marketing Services - design - advertising/marketing - Hilton HHonors guest-reward - design program - management - management - other - purchasing - site location - site location - staff training - staff training - supplies - supplies

HOTEL INDIGO

INTERCONTINENTAL HOTELS GROUP (IHG) 2 Robert Speck Parkway, Ste. 600 Mississauga, ON L4Z 1H8 416-675-6644 ihg.com Regional Director, Midscale Franchise Sales & Development, Canada: Stuart Laurie History, Plans - established in 2004 - one franchised property in Canada; 71 outside of Canada - no plans for growth in Canada at this time Franchise Costs - total investment $15,960,408 to $35,703,040 - royalty fee 5% GRR - marketing fee 3.5% GRR - application fee $500/guestroom, $60,000 minimum Services - advertising/marketing - design - management - other - site location - staff training - supplies

JANUARY/FEBRUARY 2017 HOTELIER

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THE 2017 FRANCHISE REPORT

HOWARD JOHNSON

HYATT HOUSE

HYATT REGENCY

KNIGHTS INN

History, Plans - established in 1954 - 41 properties in Canada (all franchised); 335 outside of Canada

History, Plans - established in 2012 - no properties in Canada; 75 outside of Canada (franchised and managed)

History, Plans - established in 1967 - four properties in Canada, 162 outside of Canada (franchised and managed)

History, Plans - established in 1972 - 32 properties in Canada (all franchised); 343 outside of Canada

Franchise Costs - initial franchise fee $35,000 or $350/room - total investment $94,903 to $8,614,320 - marketing fee 4% GRR (includes marketing and room sales charge) - royalty fee 4.5% GRR

Franchise Costs - initial franchise fee: $60,000 (USD) - royalty fee 5% GRR - marketing and reservation fee 3.5% of GRR - brand management services (optional) 2% of total revenue

Franchise Costs - initial franchise fee $100,000 (USD) - royalty fees 6% of GRR + 3% F&B Rev Services - centralized services chain allocation

Services - advertising/marketing - design - financial assistance available - purchasing - staff training - supplies

Services - advertising/marketing - design - management - purchasing - site location - staff training - supplies Hyatt Place

Services - advertising/marketing - design - management - purchasing - site location - staff training - supplies

HYATT CENTRIC

HYATT PLACE

INTERCONTINENTAL HOTELS & RESORTS

WYNDHAM HOTEL GROUP 22 Sylvan Way Parsippany, NJ 07054 973-753-6000 hojo.com Executive vice-president and Chief Development Officer: Chip Ohlsson

HYATT HOTELS CORPORATION 71 South Wacker St. Chicago, IL 60606 312-750-1234 hyatt.com Vice-president, Real Estate and Development (Canada): Scott Richer History, Plans - established in 2015 - no properties in Canada; 11 outside of Canada (franchised and managed) Franchise Costs - initial franchise fee $100,000 (USD) - royalty fee 5% GRR - centralized services chain allocation Services - advertising/marketing - design - management - purchasing - site location - staff training - supplies

36

HYATT HOTELS CORPORATION 71 South Wacker St. Chicago, IL 60606 312-750-1234 hyatt.com Vice-president, Real Estate and Development (Canada): Scott Richer

HYATT HOTELS CORPORATION 71 South Wacker St. Chicago, IL 60606 312-750-1234 hyatt.com Vice-president, Real Estate and Development (Canada): Scott Richer

HYATT HOTELS CORPORATION 71 South Wacker St. Chicago, IL 60606 312-750-1234 hyatt.com Vice-president, Real Estate and Development (Canada): Scott Richer

INTERCONTINENTAL HOTELS GROUP (IHG) 2 Robert Speck Parkway, Ste. 600 Mississauga, ON L4Z 1H8 416-675-6644 ihg.com Regional director, Midscale Franchise Sales & Development, Canada: Stuart Laurie

History, Plans - Established in 2006 History, Plans - Upscale Select Service - two franchised properties in - established in 1946 Canada, 266 outside of Canada - three properties in Canada (all managed); 183 outside (franchised and managed) of Canada - no plans for growth in Canada Franchise Costs - initial franchise fee $60,000 at this time (USD) - royalty fee 5% of GRR - marketing and reservation Fee 3.5% GRR - brand management services (optional) 2% of total revenue Services - advertising/marketing - design - management - purchasing - site location - staff training - supplies

JANUARY/FEBRUARY 2017 HOTELIER

WYNDHAM HOTEL GROUP 22 Sylvan Way Parsippany, NJ 07054 973-753-6000 knightsinn.com Executive vice-president and Chief Development Officer: Chip Ohlsson

Franchise Costs - initial franchise fee $7,000 - total investment $44,907 to $5,717,723 - reservation fee $4 per room booked through the central reservation system. Includes the chain and its loyalty program’s toll-free telephone numbers and websites - royalty fee up to 50 guestrooms, $25 per guestroom per month (flat rate); more than 50 guest- rooms: flat rate or 5% of GRR (percentage rate) as you select when you enter into your fran- chise agreement Services - advertising/marketing - design - financial assistance available - purchasing - staff training - supplies

LA QUINTA INNS & SUITES

LA QUINTA FRANCHISING LLC 909 Hidden Ridge, Ste. 600 Irving, TX 75038 214-492-6600 laquintafranchise.com SVP, Franchise Development: David Wilner

History, Plans - established in 1968 in San Franchise Costs Antonio, Texas - total investment $67,250,240 to - two franchised properties in $98,487,600 Canada; 891 outside of Canada - royalty fee 5% GRR (567 franchised) - marketing fee 3% GRR - plans to expand in the - application fee $500/guestroom, U.S., Canada, Mexico and Latin $75,000 minimum America Services - advertising/marketing - design - management - other - site location - staff training - supplies

Franchise Costs - initial franchise fee US$55,000 - advertising fee 2.5% - royalty fee 4.5%

hoteliermagazine.com


THE 2017 FRANCHISE REPORT Services - advertising/marketing - design - purchasing - staff training - supplies

LE MÉRIDIEN HOTELS

MARRIOTT INTERNATIONAL, INC. 2425 Matheson Blvd. E., Ste. 100 Mississauga, ON L4W 5K4 905-366-5208 marriottdevelopment.com AVP, Lodging Development, Canada: Manlio Marescotti AVP, Lodging Development, Canada: Ryan McRae History, Plans - one property in Canada; 104 outside of Canada Franchise Costs - available upon request Services - advertising/marketing - design - management - purchasing - staff training - supplies

LEXINGTON

RED LION HOTELS CORPORATE 201 W. North River Dr. Suite 100 Spokane, WA 99201 877-311-2378 x 143 www.joinrlhc.com President & CEO: Greg Mount EVP, president of Global Development: Roger Bloss History, Plans - established in 2007 in Coral Springs, Fla. - two properties in Canada (fran- chised); 26 outside of Canada

LUXURY COLLECTION

MARRIOTT INTERNATIONAL, INC. 2425 Matheson Blvd. E., Ste. 100 Mississauga, ON L4W 5K4 905-366-5208 marriottdevelopment.com AVP, Lodging Development, Canada: Manlio Marescotti AVP, Lodging Development, Canada: Ryan McRae History, Plans - no properties in Canada; 99 outside of Canada Franchise Costs - available upon request Services - advertising/marketing - design - management - purchasing - staff training - supplies

MAINSTAY SUITES

CHOICE HOTELS INTERNATIONAL 1 Choice Hotels Circle, Ste. 400 Rockville, MD 20850 800-547-0007 choicehotelsfranchise.com President & CEO, Choice Hotels International: Stephen P. Joyce Managing director: Brian Leon

Franchise Costs - initial franchise fee $30,000 - royalty fee 5% GRR - system distribution fee 2.5% GRR Services - advertising/marketing - design - site location - staff training - supplies

Franchise Costs - initial franchise fee $30,000 for up to 80 rooms; $200/each additional room (one-time fee) - marketing fee $22/room/month MARRIOTT HOTELS & RESORTS - monthly fees $35/room/month or (INCLUDING JW MARRIOTT) 4% GRR MARRIOTT INTERNATIONAL, INC. 2425 Matheson Blvd. E., Ste. 100 Services Mississauga, ON L4W 5K4 - advertising/marketing 905-366-5208 - design marriottdevelopment.com - financial assistance available AVP, Lodging Development, - lease negotiation Canada: Manlio Marescotti - management AVP, Lodging Development, - purchasing Canada: Ryan McRae - site location - staff training - supplies

hoteliermagazine.com

Franchise Costs - initial franchise fee $40,000 - advertising fee 2% - royalty fee 6%

History, Plans - established in 1957 - 17 properties in Canada; 599 outside of Canada - plans to open two units in Canada by the end of 2016

Services - advertising/marketing - design - lease negotiation - management - purchasing - site location - staff training - supplies

Franchise Costs - available upon request Services - advertising/marketing - design - management - purchasing - staff training - supplies

MONTE CARLO INNS

MONTE CARLO HOTEL MOTEL INNTERNATIONAL 7045 Edwards Blvd. Mississauga, ON L5T 2H8 888-564-6194 montecarloinns.com VP of Operations: Justin Meffe VP, Franchise Development: Danny Pedone

MICROTEL

WYNDHAM HOTEL GROUP 22 Sylvan Way Parsippany, NJ 07054 973-753-6000 Executive vice-president and Chief Development Officer: Chip Ohlsson History, Plans - established in 1986 - 14 properties in Canada (all franchised); 323 outside of Canada - initial franchise fee is the greater of $40,000 or $400/room - total investment $4,271,833 to $6,627,649 - advertising fee 2% GRR.

History, Plans - founded in 1996 Franchise Costs - two properties in Canada; 56 outside of Canada (all franchised) - royalty fee 6% GRR

Services - advertising/marketing - design - financial assistance available - purchasing - staff training - supplies

MICROTEL INN & SUITES BY WYNDHAM

MASTERBUILT HOTELS LTD., A DIVISION OF SUPERIOR LODGING CORP., MASTER TERRITORIAL DEVELOPER IN CANADA (WYNDHAM HOTEL GROUP) 1060 7th St. S.W., Ste. 200 Calgary, AB T2R 0C4 403-543-8800 masterbuilthotels.com Chairman: Marc Staniloff COO: Eric Watson

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History, Plans - established in 1984 - eight properties in Canada (all franchised) - looking to expand in southern Ontario Franchise Costs - initial franchise fee $30,000 or $400/room - advertising fee 2% - royalty fee 5% Services - advertising/marketing - design - lease negotiation - management - purchasing - site location - staff training - supplies

MOTEL 6

MASTER FRANCHISOR IN CANADA REALSTAR HOSPITALITY CORP., DIVISION OF REALSTAR HOSPITALITY (G6 HOSPITALITY LLC) 77 Bloor St. W., Ste. 2000 Toronto, ON M5S 1M2 416-923-8387 motel6.com President and COO: Irwin Prince

History, Plans - established in 1962, franchising in Canada began in 2003 - 24 franchised properties in History, Plans - 14 properties in Canada (four Canada; 1,270-plus outside of Canada franchised) - properties under construction in - plans to add six properties Fort McMurray, Alta. and in Canada Sudbury, Ont. More than 20 in development planning stages

JANUARY/FEBRUARY 2017 HOTELIER

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THE 2017 FRANCHISE REPORT

Franchise Costs - initial franchise fee $40,000 - advertising and marketing fee 1.5% - royalty fee 5% - reservations fee 2% Services - advertising/marketing - design - global reservations - operational support - purchasing - site review and analysis - staff training

NOVOTEL CANADA INC.

ACCOR CANADA INC. 3670 Hurontario St. Mississauga, ON L5B 1P3 212-457-2411 accor.com EVP North & Central America and Caribbean: Dominique Colliat History, Plans - established in 1985 in Mississauga, Ont. - seven properties in Canada; 408 worldwide Franchise Costs - initial franchise fee $500/room, $50,000 min. - advertising fee 2% - distribution fee 2% - royalty fee 4% Services - advertising/marketing - design - lease negotiation - management - purchasing - site location - staff training - supplies

PARK INN BY RADISSON

CARLSON REZIDOR HOTEL GROUP 701 Carlson Parkway, MS8254 Minnetonka, MN 55305 763-212-3475 parkinn.com COO, Americas and EVP Managed Hotels: Javier Rosenberg Executive vice-president, Development: Philip Silberstein History, Plans - established in 1986 in Minneapolis, Minn. - three properties in Canada; 140 outside of Canada (64 franchised) - plans to open a new property at Calgary International Airport in 2018

38

Franchise Costs - initial franchise fee US$35,000 - total cost US$1,682,240 to $4,753,320 - royalty fee 4.5% - advertising fee 2% - distribution fee 1.25%

Services - advertising/marketing - design - management - purchasing - staff training - supplies

Services - advertising/marketing - design - financial assistance available - purchasing - staff training - supplies

Services - advertising/marketing - design - management - purchasing - staff training - supplies

RADISSON BLU

RED ROOF INN

QUALITY

CHOICE HOTELS CANADA INC. 5090 Explorer Dr., Ste. 500 Mississauga, Ont. L4W 4T9 905-206-7316 choicehotels.ca Managing director: Brian Leon

CARLSON REZIDOR HOTEL GROUP 701 Carlson Parkway, MS8254 Minnetonka, MN 55305 763-212-3475 radissonblu.com COO, Americas and EVP Managed Hotels: Javier Rosenberg Executive vice-president, Development: Philip Silberstein

History, Plans - established in 1994 in Minneapolis, Minn. - no properties in Canada; 303 outside of Canada (94 History, Plans franchised) - established in 1955 in Canada - no expansion in Canada - 89 properties in Canada; 1,735 planned at this time outside of Canada (all franchised) Franchise Costs - initial franchise fee US$85,000 Franchise Costs - total cost US$11,002,000 to - initial franchise fee $35,000 $15,964,000 - advertising fee 1.3% - advertising fee 2% - royalty fee 4% - distribution fee 2% - reservation fee 1.75% - royalty fee 5% Services Services - advertising/marketing - design - advertising/marketing - staff training - design - supplies - management - purchasing - staff training RADISSON CARLSON REZIDOR HOTEL GROUP - supplies 701 Carlson Parkway, MS8254 Minnetonka, MN 55305 RAMADA 763-212-3475 WYNDHAM HOTEL GROUP radisson.com 22 Sylvan Way COO, Americas and EVP Parsippany, NJ 07054 Managed Hotels: Javier Rosenberg 973-753-6000 Executive vice-president, ramada.com Development: Philip Silberstein Executive vice-president, and Chief Development Officer: Chip History, Plans Ohlsson - established in 1962 in Minneapolis, Minn. History, Plans - 15 properties in Canada; 144 - established in 1954 outside of Canada (144 - 77 properties in Canada franchised) (all franchised); 773 outside of - no expansion in Canada Canada planned at this time Franchise Costs Franchise Costs - initial franchise fee $35,000 or - initial franchise fee US$75,000 $350/room - total cost US$3,181,100 to - total investment $90,103 to $9,873,100 $8,008,586 - advertising fee 2% - advertising fee 4% GRR (4% of - distribution fee 2% GRR consists of marketing con - royalty fee 5% tribution of 2% of GRR and basic reservation fee of 2% of GRR) - royalty fee 4.5% GRR

JANUARY/FEBRUARY 2017 HOTELIER

RED ROOF FRANCHISING, LLC The Red Roof Building 605 South Front St. Columbus, OH 43215 614-744-2600 redrooffranchising.com President: Andrew C. Alexander Chief Development Officer: Phil Hugh History, Plans - established in 1973 in Columbus, Ohio - no properties in Canada; 481 outside of Canada (305 franchised) - slated to enter Canada in 2017 with four units in the Eastern and Atlantic regions, includ- ing Grand Falls, N.L., Bay Roberts, N.L., Wolfville, N.S. and Antigonish, N.S. Franchise Costs - initial franchise fee $30,000 - royalty fee 4.5% - distribution fee combined with advertising and marketing at 4% GRR Services - advertising/marketing - design - staff training

RENAISSANCE HOTELS

MARRIOTT INTERNATIONAL, INC. 2425 Matheson Blvd., Ste. 100 Mississauga, ON L4W 5K4 905-366-5208 marriottdevelopment.com AVP, Lodging Development, Canada: Manlio Marescotti AVP, Lodging Development, Canada: Ryan McRae History, Plans - acquired Renaissance Hotels in 1997 - three properties in Canada; 155 outside of Canada - plans to open one units in Canada by end of 2017 Franchise Costs - available upon request

hoteliermagazine.com


THE 2017 FRANCHISE REPORT Services - advertising/marketing - design - management - purchasing - staff training - supplies

RESIDENCE INN BY MARRIOTT

MARRIOTT INTERNATIONAL, INC. 2425 Matheson Blvd. E., Ste. 100 Mississauga, ON L4W 5K4 905-366-5208 marriottdevelopment.com AVP, Lodging Development, Canada: Manlio Marescotti AVP, Lodging Development, Canada: Ryan McRae History, Plans - acquired Residence Inn in 1987 - 22 properties in Canada; 697 outside of Canada - plans to open three units in Canada by end of 2016

Franchise Costs - initial franchise fee US$75,000 or US$500 per suite, whichever is greater - royalty fee 6% GRR - marketing fee 2.5% GRR

Franchise Costs - initial franchise fee $15,000 - advertising fee $10/room/month - royalty fee $30/room/month, minimum $20,000 - reservation fee $10/room/month

Services - advertising/marketing - design - management - purchasing - staff training - supplies

Services - advertising/marketing - design - staff training - supplies

RODEWAY INN

CHOICE HOTELS CANADA INC. 5090 Explorer Dr., Ste. 500 Mississauga, Ont. L4W 4T9 905-206-7316 choicehotels.ca Managing director: Brian Leon

SHERATON HOTELS & RESORTS

MARRIOTT INTERNATIONAL, INC. 2425 Matheson Blvd. E., Ste. 100 Mississauga, ON L4W 5K4 905-366-5208 marriottdevelopment.com AVP, Lodging Development, Canada: Manlio Marescotti AVP, Lodging Development, Canada: Ryan McRae

History, Plans - established in 1996 in Canada History, Plans - four properties in Canada; 532 - 18 properties in Canada (15 outside of Canada (all franchised) franchised); 428 outside of Canada

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Services - advertising/marketing - design - management - purchasing - staff training - supplies

SLEEP INN

CHOICE HOTELS CANADA INC. 5090 Explorer Dr., Ste. 500 Mississauga, ON L4W 4T9 905-206-7316 choicehotels.ca Managing director: Brian Leon History, Plans - established in 1989 in Canada - three properties in Canada; 394 outside of Canada (all franchised) Franchise Costs - initial franchise fee $35,000 - advertising fee 1.3% - royalty fee 4% - reservation fee 1.75%

Franchise Costs - available upon request

Hockley Valley Resort Hockley Valley, Mono, ON

Photography: Elaine Kilburn

YOUR HOSPITALITY BUILDING PARTNER 416.755.2505 x22 bltconstruction.com Toronto - Vancouver


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THE 2017 FRANCHISE REPORT

Services - advertising/marketing - design - staff training - supplies

SPRINGHILL SUITES BY MARRIOTT

MARRIOTT INTERNATIONAL, INC. 2425 Matheson Blvd. E., Ste. 100 Mississauga, ON L4W 5K4 905-366-5208 marriottdevelopment.com AVP, Lodging Development, Canada: Manlio Marescotti AVP, Lodging Development, Canada: Ryan McRae

STAYBRIDGE SUITES

INTERCONTINENTAL HOTELS GROUP (IHG) 2 Robert Speck Parkway, Ste. 600 Mississauga, ON L4Z 1H8 416-675-6644 ihg.com Regional Director, Midscale Franchise Sales & Development, Canada: Stuart Laurie

History, Plans - established in 1999 - two franchised properties in Canada; 100-plus outside  of Canada - plans to add two properties in Canada Franchise Costs - initial franchise fee $40,000 - advertising and marketing fee 1.5% - royalty fee 5% - reservations fee 2%

History, Plans - established in 1998 - eight properties in Canada (seven franchised); 223 outside Services of Canada - plans to add three properties in - advertising/marketing - design Canada - global reservations History, Plans - operational support - established 1998 Franchise Costs - two properties in Canada; 353 - total investment $9,285,538 to - purchasing - site review and analysis outside of Canada $12,658,600 - staff training - royalty fee 5% GSR Franchise Costs - marketing fee 2.5% GSR (com - - initial franchise fee US$50,000 bined training and marketing fee) SUBURBAN EXTENDED or US$400 per room, whichever - application fee $500 per guest STAY HOTEL is greater* CHOICE HOTELS INTERNATIONAL room, $50,000 minimum - royalty fee 5.5% GRR 1 Choice Hotels Circle, Ste. 400 - marketing fee 2.5% GRR Rockville, MD 20850 Services *Subject to Canadian - advertising/marketing 800-547-0007 Development Incentive Program - design choicehotelsfranchise.com President & CEO, Choice Hotels - management Services International: Stephen P. Joyce - other - advertising/marketing Managing director: Brian Leon - site selection - design - staff training - management History, Plans - supplies - purchasing - founded in 2005 - staff training - 3 properties in Canada; 60 out- STUDIO 6 - supplies MASTER FRANCHISOR IN CANADA side of Canada (all franchised) REALSTAR HOSPITALITY CORP., Franchise Costs DIVISION OF REALSTAR HOSPITALITY (G6 HOSPITALITY LLC) - initial franchise fee $30,000 - royalty fee 5% GRR 77 Bloor St. W., Ste. 2000 - system distribution fee 2.5% GRR Toronto, ON M5S 1M2 416-923-8387 Services staystudio6.com - advertising/marketing President and COO: Irwin Prince - design - site location - staff training Hotelier_8.125x3_Final.pdf 1 2016-07-28 7:44 AM - supplies

SUPER 8 HOTELS

SUPERIOR LODGING DEVELOPMENT S8 CORP., MASTER TERRITORIAL DEVELOPER IN CANADA (WYNDHAM HOTEL GROUP) 1060 7th St. S.W., Ste. 200 Calgary, AB T2R 0C4 403-543-8800 superiorlodgingcorp.com President & CEO: Marc Staniloff VP Franchising & Development: Nigel Lucas History, Plans - established in 1975 - 129 properties in Canada - plans to add four to six locations in 2017 Franchise Costs - initial franchise fee $21,000 - royalty fee 5% - advertising fee 3% Services - advertising/marketing - design - lease negotiation - management - purchasing - site location - staff training - supplies

THRIFTLODGE

SUPERIOR LODGING DEVELOPMENT TL CORPORATION, MASTER FRANCHISOR IN CANADA 609 14th Street N.W., Ste. 201 Calgary, Alta. T2N 2A1 800-646-2435 travelodge.ca President: Marc Staniloff VP, Operations: Trevor Hagel VP Franchising & Development: Nigel Lucas


THE 2017 FRANCHISE REPORT History, Plans - established in 1945 in the U.S.; Canadian operations estab- lished in 1992 in Alberta - 10 franchised properties in Canada - plans to increase the brand portfolio by more than 30 per-cent net growth, with a concentration on secondary and tertiary markets Franchise Costs - initial franchise fee $20,000 to $25,000 - advertising fee 2% - royalty fee 4% Services - advertising/marketing - annual conference - loyalty program - opening and training support - purchasing - quality assurance - staff training

TOWNEPLACE SUITES BY MARRIOTT

MARRIOTT INTERNATIONAL, INC. 2425 Matheson Blvd. E., Ste. 100 Mississauga, ON L4W 5K4 905-366-5208 marriottdevelopment.com AVP, Lodging Development, Canada: Manlio Marescotti AVP, Lodging Development, Canada: Ryan McRae History, Plans - established in 1997 - 10 properties in Canada; 293 outside of Canada - plans to open seven units in Canada by the end of 2016

Franchise Costs Services - initial franchise fee US$50,000 - advertising/marketing or US$400 per room, whichever - annual conference is greater - loyalty program - royalty fee 5% GRR - opening and training support - marketing fee 2% GRR - partnership synergies - purchasing Services - quality assurance - advertising/marketing - staff training - design - management TRIBUTE HOTELS - purchasing MARRIOTT INTERNATIONAL, INC. - staff training 2425 Matheson Blvd. E., Ste. 100 - supplies Mississauga, ON L4W 5K4 905-366-5208 TRAVELODGE marriottdevelopment.com SUPERIOR LODGING DEVELOPMENT AVP, Lodging Development, TL CORPORATION, MASTER Canada: Manlio Marescotti FRANCHISOR IN CANADA AVP, Lodging Development, 609 14th Street N.W., Ste. 201 Canada: Ryan McRae Calgary, AB T2N 2A1 800-646-2435 History, Plans travelodge.ca - no properties in Canada; nine President: Marc Staniloff outside of Canada VP, Operations: Trevor Hagel VP Franchising & Development: Franchise Costs Nigel Lucas - initial franchise fee $50,000, plus $200 per key in excess of History, Plans 250 rooms - established in 1945 in the U.S.; - SPG 5% folio (4.2% blended Canadian operations estab assessment) lished in 1992 in Alberta - licence fee 5% GRR - 85 franchised properties - program fee 3.5% GRR in Canada - plans to increase brand portfo- Services lio by more than 15 per cent net - advertising/marketing growth, with a concentration on - design secondary and tertiary markets - management - purchasing Franchise Costs - staff training - initial franchise fee $20,000 to - supplies $35,000 - royalty fee 5% - advertising fee 3.5%

●●●

(THE) UNBOUND COLLECTION BY HYATT

HYATT HOTELS CORPORATION 71 South Wacker S. Chicago, IL 60606 312-750-1234 hyatt.com Vice-president, Real Estate and Development (Canada): Scott Richer History, Plans - established in 2016 - no properties in Canada; six out- side of Canada (franchised and managed) Franchise Costs - initial franchise fee $100,000 (USD) - royalty fee 5% GRR - program fee 1.5% GRR Services - advertising/marketing - design - management - purchasing - site location - staff training - supplies

WESTIN HOTELS & RESORTS

MARRIOTT INTERNATIONAL, INC. 2425 Matheson Blvd. E., Ste. 100 Mississauga, ON L4W 5K4 905-366-5208 marriottdevelopment.com AVP, Lodging Development, Canada: Manlio Marescotti AVP, Lodging Development, Canada: Ryan McRae


●●●

THE 2017 FRANCHISE REPORT

History, Plans - 15 properties in Canada; 200 outside of Canada Franchise Costs - available upon request Services - advertising/marketing - design - management - purchasing - staff training - supplies

Franchise Costs - initial franchise fee $36,000 or $360/room - total investment $178,375 to $10,096,830 - advertising fee 4% GRR - royalty fee 4.5% GRR Services - advertising/marketing - design - financial assistance available - purchasing - staff training - supplies

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Franchise Costs Services - initial franchise fee $300/room - advertising/marketing - design with minimum of $35,000 - total investment $11,774,289 to - financial assistance available - purchasing $17,717,261 - advertising fee 3% includes - staff training - supplies global sales fee - royalty fee 5% GRR

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WYNDHAM HOTEL GROUP 22 Sylvan Way Parsippany, NJ 07054 973-753-6000 wingate.com Executive vice-president and Chief Development Officer: Chip Ohlsson History, Plans - established in 1996 - six properties in Canada (all franchised); 143 outside of Canada

WYNDHAM HOTEL GROUP 22 Sylvan Way Parsippany, NJ 07054 973-753-6000 wyndham.com Executive vice-president and Chief Development Officer: Chip Ohlsson History, Plans - first Wyndham Garden opened in 2012 (Wyn Garden Niagara Falls Fallsview) - two properties in Canada; 100 outside of Canada

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OH CANADA

A Trip throu British Columbia’s hotel scene has deep roots in Canada that reflect the country’s rich history BY AMY BOSTOCK

T

he Klondike Gold Rush, Prohibition and the Canadian Pacific Railway — these are just a few of the historical milestones intricately woven into the fabric of British Columbia’s hotel landscape. According to Will Woods, founder and chief storyteller at Forbidden Vancouver Walking Tours (FVWT), there are a number of hotels in B.C. that are significant from a local-history perspective. Hotelier looks at five iconic properties that have helped shape the hotel industry in Western Canada and shines the spotlight on hotel pioneers who have left their mark.

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Go West, Young Man Built in 1898 at the start of the Klondike Gold Rush, the 47-room Victorian Hotel on Homer St. is the oldest and longest-running hotel in Vancouver. “The Klondike is a long way from here, but goldminers (or ‘sourdoughs’ as they were known), poured through Vancouver on their way north,” says Woods. “They’d hop steam ships from here up the coast to Alaska and then hike or canoe to Dawson City. The RCMP had a rule that if you were going to go to the Klondike, you had to bring a ton of equipment and provisions — it was a very descripted list of what you needed — because they got

sick of rescuing poorly equipped gold miners from the harsh conditions.” Prospectors from across North America and abroad came to Vancouver to buy these provisions from the outfitters that popped up along Cordova St. “The outfitters carried everything [the prospectors] needed so this was a massive boom for the city,” says Woods. “Not only were people staying here, they were spending a ton of money on equipment and in the salons.” The Victorian, which was built specifically to meet the demand of the gold rush, featured grand rooms on the ground floor and much more modest hoteliermagazine.com


ugh Time rooms on the upper levels. “There were no elevators at that time, so if you were a more affluent guest, you could afford to stay on the ground floor and avoid the stairs,” Woods explains. Described as the city’s greatest relic from that era, The Victorian still boasts much of its original decor and moldings, as well as the original brick courtyard behind the hotel. “For a step back into the past, they always recommend The Victorian,” says Woods. Crown Jewel Built in 1908, The Fairmont Empress holds court over Victoria’s inner harbour. “Architecturally, it’s stunning, the way it sits on the harbour,” says Indu Brar, GM of the majestic hotel that takes up an entire city block. “There’s a real sense of awe when you see it and as you come in the doors, you can feel the history in this building.” hoteliermagazine.com

Boasting 464 guestrooms, the property has been a key figure in the city’s fabric and history —playing host to its share of royalty and Hollywood celebrities from Rita Hayworth and John Wayne to Harrison Ford. “This hotel has had such a grand sense of place since the beginning of time,” says Brar. “When you think of Victorians and the milestones they’ve had in their lives, so many of them have been celebrated here at the hotel and that adds to the grandeur.” Like many Western Canadian hotels, the Empress was built in a château-style that resembled a mix of Scottish and French castles. But, says Brar, the property — which recently underwent a massive restoration project — also benefitted from the influences of its Canadian home. “The hotel is a nod to Queen Victoria and gives you a taste of that era,” she says. “But the cuisine and colour palettes

HOUSING THE TROOPS The second Hotel Vancouver sat empty for several years after its closure and, following the Second World War, was overtaken by returning army veterans who had been left homeless by the city’s high rents and expensive real estate. In 1946, Bob McEwan marched a group of homeless army vets into the empty hotel and took up residence. Following the storming of the hotel, the province converted the property into an army barracks for returning vets, a purpose it served until 1948.

celebrate the Pacific Northwest — the tranquility of the harbour and the influences of our geography.” The hotel’s cuisine is also influenced by the local environment with its focus on the Pacific Northwest, while its world-famous afternoon tea — a nod to its English ties — is a bucketlist item for many people. While The Empress has drawn heavily from B.C.’s culture, so too has the jewel in Fairmont’s crown had an influence on the community it calls home. The hotel lies at the centre of the city, so it’s surrounded by unique shops and restaurants — all of which benefit from the hotel’s presence. JANUARY/FEBRUARY 2017 HOTELIER

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Just outside the library, beside the grandfather clock, was the “lieu of residence” of one of The Fairmont Empress’ most famous visitors, John Rowland. He visited The Empress every night for 30 years, sitting in the same chair from 6 to 10 p.m. He became a hotel fixture and letters and postcards from around the world were sent to him — simply addressed: John Rowland, By the Grandfather Clock, Empress Hotel.

GLIMPSE OF THE PAST The Fairmont Empress has always been an iconic part of Victoria’s skyline

“[The Empress] has a huge impact on local economy in terms of staff and suppliers,” says Brar. “Our community is very important and we buy local and support the economy of Victoria. Many of the decisions we make benefit Vancouver Island.” She says there is a real passion for The Empress and “it’s in the hearts and minds of so many. Being in Victoria is a big part of our success. This little island and this little nook we have is stunning and the hotel was designed to fit here. Architecturally, could the hotel be picked up and put in another city? Yes. Would it have the same soul? Probably not.” Raise a Glass While Prohibition in B.C. was shortlived and ended in 1921, post-prohibition licensing laws in Vancouver meant bootlegging and speakeasies carried on well into the 1950s. “There were very strict liquor laws here for many years and basically the only place you could drink publically was in a beer parlour,” says FVWT’s Woods, who points out that bans on dancing, cards and women made for a very sterile environment. “Eventually, the city loosened up and allowed cocktails to be sold in 46

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more fancy lounges.” Our next hotel holds the distinction of being one of the first to receive a license to sell cocktails. The Sylvia Hotel, built in 1912, was originally designed as an apartment building by Seattle architect, W.P. White and named after the daughter of the owner — Mr. Goldstein. When the Great Depression hit, the Sylvia Court Apartments fell on hard times and in 1936 the building became an apartment hotel. During World War II, many of the suites were converted to rooms, in order to provide accommodation for the merchant-marine crews. By the ’60s, the Sylvia had become a completely transient, full-service hotel. The landmark property, designated in 1975 as a heritage building, is easily identified by the Virginia creeper that completely covers the Gilford Street side of the hotel. “It’s in the west end, one of the most historic parts of town — the well-to-do area when the city

was first established — and where all the wealthy businessmen built their homes,” explains Woods. He says the Sylvia has a real home in Vancouver folklore. “Many people have been charmed by it over the years — both local and tourists. It’s part of the city’s identity, the essence of Vancouver. It’s been there as part of the city’s story for more than 100 years.” Third Time’s the Charm To understand the history of our next hotel, you must go back to 1886 and the founding of Canadian Pacific Hotels. Sir William Cornelius Van Horne, the first general manager of the Canadian Pacific Railway (CPR), envisioned a string of grand-looking hotels across Canada that would draw visitors from abroad to his railway. In 1887, ground was broken for the first Hotel Vancouver, which opened on May 16, 1888. The four-storey, hoteliermagazine.com


60-room brick structure on the corner of Georgia and Granville Streets, closed in 1916. In 1916, the second Hotel Vancouver, also a Canadian Pacific Hotel, was built on the same site as the first. The 14-storey property — built in a grand Italianate-revival style — was considered one of the great hotels of the British Empire and quickly became the meeting place for Vancouver society. Unfortunately, the building soon began to deteriorate and was torn down in 1949. Ground was broken for the third and current iteration of Hotel Vancouver on December 4, 1928. Built by E.J. Ryan Construction Company, the project was started by Canadian National Railway and was eventually completed in joint partnership with Canadian Pacific Railway in 1939 at a final cost of $12 million. King George VI and Queen Elizabeth opened the hotel during their visit that year. According to Woods, the Châteaustyle building was designed to have a mystical, fairyland feel. “[The rail company] wanted grand hotels in natural settings, not functional looking hotels, to entice guests to explore the country,” he says. “At the time the hotel was built, Vancouver wasn’t an architecturally significant destination,” says Michael Pye, GM of the Fairmont Hotel Vancouver. “But with the rail line coming through, in essence, the grand style was brought here — [CPR] was the pioneer of picturesque castle-like designs in the area. You can’t build hotels like this anymore: the size of the guestrooms, height of the ceilings and grandeur of the meeting space.” CPR, now Fairmont, has three hotels in Vancouver within a short walk of one another but Pye says Hotel Vancouver stands apart due to its history and significance within the During Prohibition, the permanent residents at The Fairmont Empress in Victoria would come up with countless ways to hide their liquor. Winston Churchill received his favourite contraband brandy in a china tea pot.

hoteliermagazine.com

market. “This is Vancouver’s hotel — I happen to be the custodian that’s allowed to be the general manager of the building. It’s a huge honour to be in such a capacity,” he adds. Natural Beauty Opened in 1996 as a 46-room property in Tofino, B.C., The Wickaninnish Inn is perhaps the best example of a hotel property completely embracing its sense of place. “Having grown up in Tofino, my concept of the Inn from the beginning was to have guests wake up in the morning from their first night’s stay and know they could be nowhere else than on the west coast of Vancouver Island,” says Charles McDiarmid, managing director at Wickaninnish Inn and recipient of Hotelier’s Hotelier of the Year Award in the late ’90s. The building boasts cedar-wood batten siding, grey exterior siding to match the bleached natural driftwood on the beach and adzed post-and-beam work to match traditional First Nations’ wood-carving techniques. Inside, the design incorporates wood, stone and glass as the primary elements to bring the outside in. “Overall, we are trying to provide an experience that resonates with the subconscious, as well as conscious experience using local and regional products and materials — as much as possible made by hand or featuring some elements of hand work,” the GM explains. Since its opening, the Wickanin-

INDUSTRY ICONS Bill Pattison is best-known for founding Delta Hotels Ltd. in 1962 and serving as president until 1988, when the chain was sold. During his time with Delta, the brand grew from one hotel in Richmond, B.C., to a chain of hotels in seven provinces and Florida. Pattison passed away in 2015 at the age of 83. Sinclair and Frederique Philip are the owners of Sooke Harbour House Hotel on Vancouver Island. Over the last 31 years, through their unrelenting crusade to promote seasonal, regional, Canadian cuisine, they have showed the industry it was possible to offer a high-end hotel and culinary experience on Vancouver Island and be successful. Reverend Ian Powell, the GM at the Laurel Point Inn, is one of B.C.’s most respected hoteliers. In 1978, he joined the Canadian Pacific Hotel chain and has since been general manager of some of Canada’s most iconic hotels, including The Fairmont Palliser in Calgary, the Fairmont Hotel Vancouver, Victoria’s Fairmont Empress, the Fairmont Princess in Bermuda and, most recently, the Inn at Laurel Point. “He is the strongest and most consistent operator I can think of,” says Charles McDiarmid, managing director at Tofino, B.C.’s Wickaninnish Inn.

nish Inn “has been a constantly evolving love affair which has seen many changes driven, in large part, by guest feedback combined with our own ideas of what modern hospitality should look like,” says McDiarmid. In

Q at the Fairmont Empress

JANUARY/FEBRUARY 2017 HOTELIER

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In 1960, while Hotel Vancouver underwent extensive modernization, housekeeper Ethel Ferguson began hiding the original Chippendale and mahogany furniture in nooks and crannies throughout the hotel. Then, 15 years later, when plans were in place to restore the hotel back to its original style, Ferguson revealed her secret and produced enough furniture to decorate 35 rooms.

1998, the Ancient Cedars Spa was opened and in 2003, the Beach Building was added — adding 30 guestrooms, including 12 suites. The Inn employs 150 staff in winter and 160 in the summer, which, in a town of 2,000 people, is not insignificant. The hotel’s food-and-beverage program remains true to the area’s food culture, serving authentic Canadian cuisine featuring as much local and innovative products as possible (often foraged from the land around the hotel or caught in local waters). “Keep in mind we have been doing this since 1996, which was long before this concept was popular,” adds McDiarmid. Being so tied to its geography, the Wickaninnish Inn benefits from a generation of travellers looking to experience destinations outside of major city centres, says McDiarmid. “Our mountains, our forests and our coast lines go a long way towards

HONOURABLE MENTION “Four Seasons Hotels coming to Vancouver elevated the standard of service and showed us what great service really could be in Canada, which [not only] elevated service standards for the hospitality sector but for any service business in general,” Charles McDiarmid, managing director at Tofino, B.C.’s Wickaninnish Inn.

defining who we are as a people and the experiences we have to offer our visitors,” he says. “We look out on the largest ocean on the planet with an ancient temperate forest as a backdrop, [the area has] an indigenous culture that goes back 5,000 years and we live in a UNESCO Biosphere reserve with a National Park and thousands of hectares of provincial park at our door step — if this does not ensure one appreciates and respects our natural bounty, what would?” u

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SEGMENT REPORT

SOMETHING FOR EVERYONE Hotelier shines the spotlight on the limited-service, mid-scale and extendedstay segments of Canada’s hotel industry

C

anada’s hotel industry offers something for everyone — whether it’s a mid-management business traveller looking for an inexpensive, clean room with a reliable internet connection, or a vacationer seeking a grand luxury property complete with a highend spa and gourmet restaurants. At the moment in Canada, “The greatest growth in terms of RevPAR is in the luxury segment and resorts,” says Monique Rosszell, managing director of the Toronto office of HVS. She notes that, according to STR data, year-to-date RevPAR nationwide is up overall by just over four per cent, whereas the luxury segment specifically is up approximately 12 per cent. “And the reason for that is the Canadian dollar, which has induced a lot of domestic leisure demand — people didn’t travel [to other countries] this summer because our dollar was so low — and it also induced international demand because it was good value for money.

hoteliermagazine.com

That is where we’re BY CAROL NESHEVICH seeing the greatest growth in 2016.” That said, for operators in Hotels hotel segments such as limitedCanada. service, mid-scale and extended-stay, “Mid-scale and the positives of operating in those limited-service has evolved so much segments — as opposed to the currentover the last number of years, so it does ly thriving luxury segment — remain tend to be a bit of a moving target.” undeniable. “The luxury segment has Indeed, while limited-service started to perform really well over the hotels used to be strictly “no frills,” last year, but that’s also quite volatile,” many have evolved to offer a few says Eric Watson, COO of Calgaryextras here and there, such as small based MasterBuilt Hotels. “There’s meeting facilities, free Wi-Fi and generally less risk and better cash flow complimentary breakfast. “We generfrom your hotel operations in limited ally include a complimentary hot or focused service.” breakfast, Internet...all the basic Hotelier spoke with industry opera- services, so it’s one price for the room tors and experts to find out what and the stay,” says Watson, whose these three segments have to offer company has the master territorial guests and operators alike. development rights to the Microtel Inn & Suites by Wyndham brand in Canada. He describes Microtel as LIMITED-SERVICE “Limited-service is easy to define — it’s fitting into the “mid-scale range of limited-service. Our value propositypically hotels that don’t have foodtion is providing that nice, consisand-beverage operations,” says Brian tent, contemporary experience across Leon, managing director at Choice JANUARY/FEBRUARY 2017 HOTELIER

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CORNERING THE MARKET The limited-service Microtel brand currently has 40 properties in the development pipeline

the country with the best value. We’re able to run an upper-economy development price but really deliver a mid-scale experience for the guest.” Watson says the primary demographic reflects a really broad range of travellers: “a lot of sports teams, families looking for good value, mid-management business travellers — we provide a decent room at a decent price.” That said, its main markets in terms of geography tend to be the secondary or tertiary markets and suburbs of larger cities. In fact, for most limited-service chains, it tends to be too expensive to develop in the big cities considering its rates aren’t high enough to justify the development. “We have targets in Aurora, Oshawa, Orillia, Port Elgin and a variety of other places like that in Ontario. We just opened in Sudbury, Ont. in July,” he says, noting there are currently more than 40 Microtel hotels in the development pipeline. “Our focus right now is on Ontario and Quebec, with some select opportunities in Atlantic provinces and some spotted opportunities in Western Canada.” Watson adds, “We think the opportunity is in those secondary/ tertiary markets where people want a nice new hotel product but you just can’t afford to build those upscale 50

JANUARY/FEBRUARY 2017 HOTELIER

brands. So we’re fitting within this gap in the market, bringing in this brand-new, consistent product that competes well against the mid-scale segment.” MID-SCALE

As Choice Hotels’ Leon explained, the definition of mid-scale is indeed a bit of a spectrum these days, with properties ranging from what some would call “focused service” all the way to upper-mid-scale. Choice’s Comfort and Clarion brands would fall into the mid-scale to upper-midscale range, he explains. Meanwhile, Steve Gupta, president and CEO of Markham, Ont.-based Easton’s Group of Hotels, describes mid-scale as “providing almost full service without being full-service hotels,” and points to Hilton Garden Inns and Courtyard by Marriott as examples. Rajiv Trivedi, Chief Development Officer at La Quinta Hotels, says La Quinta would certainly fall into that mid-scale or even “focused-service” definition, “but it’s pretty fluid. The definitions vary so much from individual to individual. In our case, all of our hotels offer large spacious rooms with a king bed or two queen beds...We also offer meeting room facilities, extended workout facilities, free breakfast for all our guests, free high-speed Internet access to all our

guests and business centre facilities.” Trivedi says his demographic is split 50/50 in terms of business versus leisure travellers. And in terms of development, the mid-scale segment isn’t completely shying away from urban centres. “Our predominant growth comes in four key markets: downtown, business district, airport areas and surrounding suburbs of any key area where growth is robust,” he explains. “We have a new construction on the books for Calgary; however, with the oil situation, that construction has slowed down. But we’re targeting markets in Ontario, B.C. and Saskatchewan.” Similarly, Leon says Choice’s brands are targeting a wide variety of markets — essentially anywhere they don’t already have a presence — but one thing they’re especially keen on doing is “trying to identify smaller markets where there may be no branded hotels at all, let alone a Choice property, and asking, ‘how are the unbranded hotels doing here?’” For example, “we announced [a Comfort Inn and Suites] a little while ago in Goderich, Ont. So we’ll be the first branded hotel there. Markets like that can offer great opportunities,” says Leon. “They’re small markets and they’ve never had a branded hotel, so it’s a really big deal getting a big brand. We can go into some of these smaller tertiary markets and pay a fraction of what it would cost us in land costs, as opposed to going into the larger markets, and do just as well.” While mid-scale RevPAR growth hasn’t been strong this year, Trivedi still sees it as, over time, a smart

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LAP OF LUXURY The greatest growth in RevPAR in Canada is in the luxury segment

segment to be in. “Historically, mid-scale performs very consistently in downturn or upturn,” he says. “The cost of operations is relatively low; you’re offering a good value proposition for the guests and your rates are very good in comparison to economy or other segments. For both hoteliers and for guests, it is a darling segment.” EXTENDED-STAY

Extended-stay properties “provide everything guests need to be comfortable and productive on longer stays, such as spacious rooms with kitchens and separate spaces to work, sleep, eat and relax,” says Jeanette

Costa, vice-president of Sales and Revenue Strategy at Toronto-based Crescent Hotels & Resorts Canada, which has a diverse portfolio of properties including the Staybridge Suites West Edmonton extended-stay property. “Hotel amenities would also include services such as laundry, storage lockers and social spaces to meet in small groups.” Leon notes the operating model for extended-stay is obviously somewhat different from the rest of the hotel industry. “Operationally, they can be hotels where the housekeeping services may not be done daily and that sort of thing — so they’re run a little bit differently,” he says, adding Choice Hotels extended-stay brands (Suburban Extended Stay and Mainstay Suites) tend to be located in more secondary and tertiary markets. “It tends to be more corporate, people that are going to be working in one place for extended periods of time,” he says. Costa adds that the demographics of extended-stay customers does vary according to the market. “They could be business professionals on project-based business, construction crews or even families that have been temporarily displaced from their homes,” she explains. Athough Easton’s Group of Hotels does have extended-stay properties in secondary/tertiary and suburban markets, including a TownePlace Suites in Sudbury, Ont. and another

in Thunder Bay, Ont. — as well as two recently acquired Staybridge Suites properties in London and Guelph, Ont. — extended-stay isn’t all about the tertiary markets for Gupta, who has a Residence Inn property that is thriving in the heart of downtown Toronto. As far as challenges in this segment go, “extended-stay is threatened by Airbnb quite a bit,” admits Gupta. But he is trying to spread the word to potential guests about the security issues that could be involved in staying at an Airbnb, compared to the safety you get from a trusted branded property. Still, according to Rosszell, extended-stay properties have some built-in upsides. “The performance of an extended-stay hotel, in general, has higher occupancy than its counterparts in any market because the soft night is traditionally the Sunday night; for most hotels that is their biggest challenge,” she explains. “But the extended-stay has demand seven days a week because people are basically living there. The average rates tend to be a little bit lower if there are a lot of 30-day plus [guests], because they discount the rate — but in terms of performance, operating costs are much less because they don’t go in and change the rooms every day and you’re not checking-in all these people all the time, so it is a very healthy operating model.” u

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DECOR & DESIGN

MILLENNIAL DESIGN

by

As the largest living demographic, millennial tastes are top-of-mind for hotel designers BY ERIC ALISTER

T

he millennial generation’s impact on the world is growing and its needs, values and spending habits are impacting every aspect of the hospitality industry, causing it to reinvent itself to more effectively accommodate the 21st-century guest. Despite the media’s sometimes ambiguous classification, demographers generally point to those born between 1980 and the early 2000s as the millennial generation. This cohort now accounts for more than one-third of the world’s hotel guests and is expected to become the majority by 2020. Common millennial characteristics relevant to the hotel industry include a strong penchant for modern design and contemporary living spaces; a high demand for the latest smart technologies, with an emphasis on social media; and an insatiable appetite for information. Given these characteristics, today’s designers and hotel JANUARY/FEBRUARY 2017 HOTELIER

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operators are focused on providing guests with personalized modern spaces, the latest digital amenities and around-theclock connectivity to social media. “The impact of millennial travellers on hotel design is profound,” says Lionel Ohayon, founder and CEO of New York-based Icrave design studio. “Previously, hotel design was focused on creating dreamscapes that promote escapism, placing the traveller in an environment that often required him or her to fit into the designer’s vision.” This approach to hotel design failed to provide millennials with personalized experiences, Ohayon explains. “Hotels are now designed to serve as public houses where people are encouraged to spend entire days, become citizens of the brand and make it their own. We are designing spaces that can easily change to become reading rooms, nightclubs or lecture halls without losing their sense of place.” When Montreal-based Camdi Design Firm was commissioned to redesign the Residence Inn by Marriott at Mont-Tremblant, it set its sights on the millennial traveller — creating a space that would blend the cohort’s interests with the ambiance of Mont-Tremblant. Using the resort itself as inspiration and the starting point for the design, the firm incorporated contemporary elements with the rustic feel of the ski resort. The approach ensured the property would remain relevant to its current and future clientele without sacrificing the integrity of its geographically unique identity. STAYING CONNECTED

Social-media integration is absolutely integral to luring millennial guests. As The New York Times reported in April, when it comes to leisure travel, millennials take photos of everything — including their hotel’s lobby, the view from the room, all elements of the room itself and bathrooms and fixtures. This content is then shared with friends, family and co-workers and the impact is exponential. “I post almost everything on social media,” says Sherelle Banks, a communications analyst for Fidelity Investments who recently stayed at a Marriott International hotel in Costa Rica. “People who saw pictures of my trip to Costa Rica on Facebook said they want to go with me next time.” Kellie Sirna, principal and co-founder of Studio 11 Design, utilizes social media in the hotels her firm designs to create buzz among millennials. “My team places a huge emphasis

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on creating social-media moments in the hotels and this is clearly reflected in the social-media accounts of guests who post about and tag the hotels,” Sirna explains. “After every project, we monitor social-media posts created by guests to see what design elements are most photographed — we even use these images in proposals to new clients since they clearly show the value art and carefully designed details can bring to a space.” At the Sheraton Austin Hotel, for example, Studio 11 Design created a custom book installation in a small nook below the lobby staircase, adjacent to the bar, which Sirna’s team discovered has become one of its most photographed design elements on social media. “We’re [currently] finalizing more ‘social-media moment’ elements,” Sirna says. “And we’re excited to see how guests react to these as well.” With the undeniably important role social media plays in millennials’ lives, the technology required for accessing it becomes even more important. Therefore, design in hotels is as much function as form; it’s not just how a space looks and feels but what technological conveniences it can provide, so designers are looking at how millennials travel in order to anticipate their specific digital needs. “Millennials often travel with a group of friends and share rooms, so they expect a large amount of outlets integrated within each room so everyone’s devices can easily be charged,” says Lesley Hughes Wyman, principal and cofounder of MatchLine Design Group, based in Texas. “We seamlessly integrate outlets in just about every piece to ensure flexibility for any traveller, including the public-area pieces,” she explains. “Everyone works and plays differently and we must over-plan for these locations early-on. Despite the constant evolution of technology, millennials still expect the latest-and-greatest in each room, so we’ve also been adding USB ports along with the outlets. We’ve recently been looking at wireless charging stations to hopefully mitigate the [challenges caused by] port types and ever-changing technology.” In other areas of hotel design, technology plays a role in combining both form and function; the use of smart technology to control interior lighting — popularized by Philips Hue products — has blown up in the consumer market and, more recently, in hotels. Lighting is key to setting the mood and ambiance of a space, making it increasingly important for hotels to offer customization options. For example, using

hoteliermagazine.com


coming soon

MOOD LIGHTING Lighting is key to creating the right ambiance in all hotel public spaces

smart lightbulbs with accompanying apps, guests can adjust a lightbulb to shine in any hue, as well as control its brightness level. LumiFi — a recent contender in wireless lighting-control software, designed by German-trained architect and lighting designer Beatrice Witzgall — seeks to automate and personalize hotels’ interior lighting on a large scale. LumiFi is the first software of its kind, boasting the ability to control and unify LED bulbs from a variety of manufacturers; saving hoteliers the added cost of having to purchase specific lightbulbs that work with only one manufacturer’s software. GENERATION NEXT

With millennials recently surpassing Baby Boomers as North America’s largest generation, it’s impossible to deny the significance of this group’s impact on the hospitality industry; the many ways in which designers are transforming hotel properties and accompanying amenities stands as stark proof. Some designers, however, are looking even further into the future and designing with Generation Z (also known as iGen) in mind. “We are looking past the millennials to the next generation — deemed iGen,” says David Shove Brown, principal and cofounder of Washington, D.C.-based design firm, //3877. “This generation, under 19 years old and born after 9/11, accounts for approximately 25 per cent of the U.S. population. Because they were mostly seven to 11 years old during the recession, they place high value on the dollar as well as on hard work. They want to follow their dreams, and are greatly concerned about humanity and the planet. Thus, their social-media sharing is going to be more substantive,” he notes. “Instead of simply Snapchatting a photo of a lobby, they will be more likely to share a picture of a sustainable shower that is tiled with recycled glass in a room that they got a great deal on while travelling with their family. This group is more loyal to doing good in the world than loyal to specific brands. For hotels to appeal to this demographic, they need to shift the focus from USB outlets and WiFi to ways they can change the world through sustainable design.” u hoteliermagazine.com

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Finding Bal Hoteliers are taking a strategic approach to building relationships with OTAs

I

n the past, if you wanted to travel, you called a travel agent. Today, many consumers book their own trips by visiting online-travel agencies (OTAs) such as Expedia or Booking.com. OTAs provide convenience and choice and help travellers discover, book and experience travel in a different way. The first mainstream OTAs, such as Expedia, Booking.com, Lonely Planet, Travelocity, Priceline and Travel Zoo, were founded in the 1990s. The early 2000s saw the debut of Hotwire, TripAdvisor and Travelport. Expedia. ca was established in Canada in 2000

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and in 2003, the company merged with Hotwire. In 2004, Expedia acquired TripAdvisor and since then, numerous other OTAs have entered the market. Today, the Expedia family is the largest online-travel company in the world and Expedia.ca is Canada’s largest online-travel provider. Booking. com stands as the world leader for booking accommodations online. According to a study published in the International Journal of Trade, Economics and Finance, equal proportions of men and women use the Internet to book online and they do it more frequently as they get older. Interestingly, the higher their income or education level, the less likely people are to book online.

AN EVOLVING RELATIONSHIP

At first, hoteliers viewed OTAs with some skepticism, but now, “They are part of the travel landscape. There are mutual benefits in working together,” says Sarah MajorBourgeois, director of Distribution at Groupe Germain Hotels. According to Don Cleary, president of Marriott Hotels of Canada, “[Marriott takes] a strategic and holistic approach to our distribution channels, which include both direct channels such as Mariott.com and indirect channels such as OTAs and travel agencies.” OTAs, on the other hand, have always had a positive outlook on their impact in the travel and accommodations industry. “In my seven years hoteliermagazine.com


OPERATIONS

ance BY SHERENE CHEN-SEE

working at Booking.com, I’ve always described these relationships as immeasurably valuable,” says Sherlee Taylor, regional manager for Canada at Booking.com. “From small independent hotels to global chains, the feedback we receive from our partners [shows] we are trusted, valued and collaborative partners with the mutual goal to optimize their business strategies.” Likewise, Expedia Group Area manager – Canada, David Debeule says “We are constantly evolving our business and transforming the way we work with our partners. We are about helping our partners reach incremental customers through our technology advancements and marketing reach. We offer diversity, breadth of travellers and the resources to optimize revenue.” IMPACT OF OTAs IN CANADA

In terms of the Canadian hotel landscape, specifically, Debeule say hoteliermagazine.com

OTAs have offered the opportunity for consumers to find a wide variety of lodging accommodations and expand their holiday’s horizon. “OTAs provide incremental marketing and are a key piece in driving exposure to destinations,” he says. “From the exclusive Ice Hotel in Quebec City to grande lodges in the Canadian Rockies, all the way to fivestar boutique hotels in core cities, there is something for every occasion, every budget and every consumer to discover. By partnering with local destinationmarketing organizations, we are able to help customers find new and exciting destinations they may never have thought of before,” he explains. The proliferation of OTAs has also resulted in stronger visibility for Canadian hotels in hard-to-reach markets such as Asia, adds Major-Bourgeois. OPPORTUNITY KNOCKS

OTAs see challenges as opportunities and the focus, as might be expected, is often on the technology. “One of the most relevant [challenges/opportunities] in the industry at the moment is the fast move towards mobile and the fact consumers are preferring and insisting on making more of their purchases using their devices. Staying upto-date and ahead of all the changes can be challenging and costly for our accommodation partners,” says Taylor. “Mobile technology continues to grow,” adds DeBeule. “It is a fast-paced environment and we need to be where the consumer is — online. While being more transparent, the onlinedistribution landscape is still complex to navigate. With so many options now available to the consumer, for a hotel, standing out in the crowd has never been more important and challenging at the same time. “Additionally, with advancements in technology, there is an increased need for hoteliers to stay ahead of the trends and tools. With the amount of data and tools available to hoteliers, there is increasing revenue-management complexity. It is increasingly

challenging and important to stay competitive,” says DeBeule. To help meet those challenges, Expedia offers its extranet platform, Expedia Partner Central (EPC), which gives hotels access to immediate, relevant, actionable data, 24/7. “EPC enables hoteliers to have real-time insights into the marketplace [and helps them to] evolve and make the right decisions to drive incremental revenue — this is information that helps hotels make informed business decisions.” Taylor cites a few examples of how Booking.com is meeting the technology challenges: “Our Booking.com app allows searches for accommodations ‘around me,’ enabling guests to find accommodations close to them and book instantly,” says Taylor. “We launched a new analytics report for our partners, giving them additional info on mobile booking trends. We also offer a great new product in our Booking-Suite family called Rate Intelligence, a rate-shopping tool that gives partners powerful, live, ondemand data — enabling them to stay ahead of what’s happening within their competitive set.” “The relationships we have in the industry, especially with hotels, [are] hugely important,” adds DeBeule. “Our market managers work directly with hotels to help them maximize occupancies and revenues. We use a combination of local knowledge, real-time data and analytics to help hotels with local strategies to reach target customers at the right time, with the right rate. Our most successful partners are the ones meeting regularly with their market manager [at Expedia].” OWNING THE RELATIONSHIP

Although hoteliers acknowledge the challenges associated with mobile technology and the continued growth of online tools and platforms, they are also concerned with maintaining customer relationships. It’s fair to say this evolving relationship is the main challenge hoteliers face with regard JANUARY/FEBRUARY 2017 HOTELIER

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as earning Marriott Reward loyalty points and free Wi-Fi, among others.” Nevertheless, Cleary adds: “We have strong partnerships with OTAs, and they play an important role in the industry as they have a large reach into a customer base of infrequent travellers that may not have a lot of experience with our brands.” WORKING TOGETHER

to OTAs. According to Major-Bourgeois, “It is important [for hoteliers] to be conscious of our distribution channels. OTAs can be leveraged and are innovative with technology, but hotels need to keep ownership of the relationship with the customer.” A few years ago, she says, customers would begin their relationship with the hotel when they were in the shopping phase. “Now the relationship often begins when they set foot on the property. The relationship between hotel and customer is ‘shorter’, so hotels need to be attentive to the small

details. A hotel needs to stay transparent, relevant and share its value with the customer. OTAs are a great onestop shop, however, when the customer books with a hotel, there is more service, more attention to detail.” Likewise, while he appreciates the benefits OTAs bring to the hotel industry, Cleary believes there is great value in booking directly with the hotel. “We are always looking to increase customer knowledge of the fact that when you book directly with us, through channels such as Marriott. com, you not only get the best rates guaranteed, but additional perks such

As they collaborate and innovate to find solutions to the challenges faced by OTAs and hoteliers, the one thing both groups have in common is the desire to please the customer. The relationship between OTAs and hoteliers needs to continue to thrive and grow in order to foster the ultimate customer experience. DeBeule sums it up by saying, “We are constantly looking for ways to innovatively work with and assist our partners. As we roll out new initiatives, our partner relationships are continuously evolving so that we can provide them with more value.” u

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EQUIPMENT

A PLACE FOR

Everything

These case studies demonstrate that kitchen design is all about getting the biggest bang for your square footage BY DENISE DEVEAU

T

he front-of-house is a vital aspect of restaurant planning, whether it’s a buffet-style breakfast room, or a three-meal-a-day, upscale restaurant. While kitchen design may not have the artistic license of the front-of-house of a restaurant, it is an equally important consideration behind the scenes. The kitchen is the heart and soul of foodservice operations. It’s the hub for food preparation and cooking, receiving, storage and dishwashing. As such, it has to be efficient, comfortable and safe to work in — and most importantly, artfully laid out to maximize floor space. There are several conflicting forces at work when it comes to kitchen design, says Ian Jameson, senior associate with CiniLittle Foodservice Design Consultants in Toronto. “There’s the person bankrolling the budget, the chef who has to use it and the facilities guy who has to maintain it. The person responsible for capital costs may have a different idea of what goes into the kitchen than the one who has to use it.” The issues they will all agree on is the need for space and efficiency. “It used to be kitchens were the size of football fields,” Jameson says. “You don’t have that luxury anymore; you have to be efficient from a spatial and labour point of view.” Space is a concern across the spectrum, from the smallest of breakfast pantries to large-format kitchens servicing hundreds of guests at any given sitting. Here’s a look at how some operators make the most of what they have.

AN ERA OF EFFICIENCY With space at a premium, hotel kitchens in every segment of the industry are being designed with efficiency in mind

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GO WITH THE FLOW The well-thought-out design of the buffet area at Choice Hotels Mississauga alleviates traffic by allowing diners to move efficiently between different stations

GOOD DESIGN IN SMALL PACKAGES

“Every square foot that goes into food preparation and storage eats at a property’s revenue-per-square-foot, so the biggest driver in terms of design is maximizing space,” says Brendan Gibney, senior director of Franchise Services, for Choice Hotels in Mississauga. Having come from a larger hotel environment, he says design needs at a limited-service are much less demanding, given that kitchens are more akin to pantries. “Unlike a large hotel that has loading docks and different areas for storage, a pantry is the place where everything is stored and prepared,” he explains. A Choice Hotel pantry is typically approximately 250 sq. ft. — most of which is taken up by the freezer/refrigeration system and cabinetry. Other must-haves for the space include a convection oven and hand-wash sink. If the property prefers using china and silverware over disposable items, then the space must include a dishwasher or three compartment-sink. Last, but not least, is a commercial coffee-brewing set-up. Technology has helped operations squeeze more into less, Gibney says. “We can execute cooking in a much smaller space than 15 years ago. That being said, a significant portion of space is around storage versus actual cooking. Much of that is under the counter.” The buffet area itself must be equally efficient to ensure consumers get through the lines efficiently, he adds. “Things like the coffee and pancake/waffle machines should be separate.” Gibney says budget for a typical pantry space renovation averages $10,000 to $15,000 for equipment. In a new build, costs can be as much as $30,000, which includes cabinetry, plumbing and electrical.

Full-service kitchens are a “very different story,” he adds. “A kitchen producing food is not a revenue-generating centre like the front of the house. That’s why it is important to maximize space.” On the mid-size front, the days of separate banquet and event kitchens are gone, Hood explains. “All production — from the restaurant to catering — is now being completed in one central area, so efficiency is key.” His first rule of thumb is buying the best quality commercial product available to ensure a lengthy life. Another is investing in multi-purpose equipment. “In the old days you would buy a convection oven and steamer. Now that technology is integrated into one unit to produce a smaller footprint.” Another useful technology is self-venting oven systems. “The most complicated and expensive thing to work out is the extraction systems,” Hood says. “That cost alone puts a dent in any major development project. Selfventing makes it easier to scope out plumbing because the unit can be moved.” Also gone are the days of large basement storage rooms (with the exception of large catering and event properties). The solution is to increase deliveries to three days a week compared to one to reduce storage needs. Where an open kitchen or a live-cook service is preferred, equipment needs to be both functional and sleek, Hood says. “For live cooking, equipment needs to almost disappear when not in immediate view — such as thermal cooktops that match counters. Some look like pieces of furniture that can be moved and placed against the wall like a side table once they’re turned off.” He estimates that a small banquet event kitchen could cost $20,000 for basic heat, refrigeration, dishwashing

THE MIDDLE OF THE ROAD

Rob Hood is the corporate Food and Beverage manager for Atlific Hotels in Toronto. The company operates more than 60 hotels across the country. “To a certain extent, there are design guidelines,” he says. “For instance, a select-service brand is based on a ‘jigsaw puzzle’ – a schematic diagram that indicates certain components that need to be there.” 60

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hoteliermagazine.com


and equipment storage. “For larger projects — such as the Westin Montreal’s kitchens — equipment alone can cost up to $1 million.” A LARGER PERSPECTIVE

The Fairmont Empress in Victoria launched its new Q Restaurant and Bar in June 2016, which was part of a major restoration project for the property. Executive chef Morgan Wilson says while the footprint didn’t change as they were working inside a heritage property, “other than the floor, everything is new.” The basic layout was preserved with the exception of the cold area, where they decided to improve efficiency from a service standpoint. “We made the line more efficient for cooks to work on and get dishes up quicker, while limiting the need to move around,” Wilson says. One investment for achieving that was the refrigerated drawer and roll-top units for keeping prep items cold at the stations. “We also put two stacking Rational ovens on the line,” he says. All equipment on the line — including the fridges — is on wheels to allow for easy removal and cleaning. There’s also a flight-deck pizza oven and a new CinelliAspera pastry oven in the bakery kitchen. The biggest investment was a new Capture Jet hood ventilation system, which Wilson estimates accounted for approximately half of the $1.5-million kitchen renovation budget.

“A KITCHEN PRODUCING

FOOD IS NOT A REVENUEGENERATING CENTRE LIKE THE FRONT OF THE HOUSE. THAT’S WHY IT IS IMPORTANT TO MAXIMIZE SPACE ” One of the biggest design changes involved doubling the size of the pass space, as well as improving lighting, he adds. “The pass was one of the biggest changes — the old space slowed down the process.” He also worked with a fire-suppression company to put flexible hoses on the nozzles attached to the salamanders, allowing staff to quickly and easily disconnect and reconnect gas hoses when moving them for cleaning. Wall coverings are FRP (fibre-reinforced plastic) panels that are cut to size. “They’re washable and really easy to maintain,” Wilson says. “The walls are very white, which helps reflect the light. When combined with the improved ventilation, the overall work environment has improved dramatically. We’ve even been able to put in an air conditioner, which is a big luxury in a kitchen.” u

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ICONS & INNOVATORS

BREAKFAST SPEAKER SERIES MARCH 23, 2017

SHERATON CENTRE TORONTO HOTEL

FEATURED SPEAKERS

IN CONVERSATION WITH ARNE SORENSON When Marriott International acquired Starwood Hotels & Resorts earlier this year, the Bethesda-based hotel company became the biggest hotel company in the world. The deal, which took more than a year to finalize made headlines around the world. Now, the hard work begins. How will Marriott International integrate the new acquisition? What kind of impact will this juggernaut have on the hotel landscape? How will employees of the two companies co-exist and what are the plans for further expansion? Kostuch Media Ltd., is proud to present Arne Sorenson, the president and CEO of Marriott International, as 2017’s first instalment of Icons & Innovators. Meet the man at the helm of the world’s largest hotel chain. Find out all the details about the transaction, the integration and the expansion planned for future growth from the hotel executive leading the company.

ROSANNA CAIRA ARNE SORENSEN Editor & Publisher Kostuch Media Ltd.

TO REGISTER & FOR MORE INFORMATION visit www.kostuchmedia.com/shop 416-447-0888

President Marriott International


HOTELIER

LEADING BY EXAMPLE

As the new GM of San Francisco’s Westin St. Francis, Canadian-born Randy Zupanski is dedicated to equipping associates with the tools to succeed BY ROSANNA CAIRA

E

ven as a child, Randy Zupanski knew he wanted to work in the hotel industry, but little did he know that one day he’d be running the iconic Westin St. Francis in San Francisco. Appointed to the post last October, the 50-something hotelier is no stranger to running renowned properties. Among the list of hotels he has helmed in six countries are the Fairmont Pacific Rim in Vancouver, the Shangri-La Rasa Ria Resort in Malaysia and the Fairmont Makati in Manilla, Philippines — ­ heady stuff for a kid from London, Ont., who was introduced to the hotel industry through a dishwashing job while he was in high school. “The job was a great introduction to the indusQUICK QUIPS: try and provided me with an Personal status: Married for understanding of the hard work 28 years and father to twin that takes place in the heart of daughters the house to support our associHobbies: Exercise every day ates in delivering a high level of and golf and fishing when time service,” says Zupanski. It’s an permits Reasons for success: Hard ethos he continues to espouse work, perseverance, willingness in his new role overseeing the to take risks, flexibility (and a 1,195-room property. supportive wife and family who The graduate of London’s have been flexible to move anyFanshawe College is already where and often) feeling at home in his new hotel, now under the Marriott umbrella. “With the recent acquisition of Starwood by Marriott, this opens the door for change and innovative opportunities at all levels of the business,” states Zupanski. Of course, the hotel’s rich 112-year history was also a drawing card. “The Westin St. Francis is an iconic hotel with tremendous history and architecture. The property is comprised of two buildings, the Landmark Building, which was originally built in 1904 and consists of 614 guestrooms, and the Tower Building that opened in 1972 64

JANUARY/FEBRUARY 2017 HOTELIER

and has 581 guestrooms. I love having the combination of these two structures, as it offers both a historic and modern feel that can appeal to all guests.” Running such a mammoth property requires the commitment of his entire team of 1,025 associates. “Our team actively supports one another to ensure our guests’ needs and expectations are not only met but exceeded.” Operating in an increasingly competitive market means Zupanski’s biggest challenge is “to improve financial returns while retaining balance with an equal focus on our associates, guests, and the brand.” He prides himself on being “hands-on with a balanced approach, while being fully engaged in all areas of the business.” Zupanski arrived at the hotel on the heels of a $6-million renovation to its meeting spaces and more updates being planned. “We are constantly investing in improvements at the hotel, as it’s important to keep things fresh. We are currently in the process of reinventing our food-and-beverage offerings. We also have a renovation of the Landmark Building guestrooms scheduled to start in late 2017.” Though renovations may keep the hotel current, “At the end of the day, the number-1 point of difference will always be the associates and how they value the guests,” says the gregarious hotelier. “It’s what sets the hotel apart.” u hoteliermagazine.com


CANADA’S LARGEST FOODSERVICE EVENT.

THE HOSPITALITY EVENT OF THE YEAR

Unleash your senses at the RC Show 2017! Improve your business operations, make new connections or let your taste buds guide you. Look for cutting-edge products, trending food and drink, unique networking opportunities and culinary experiences. Join experts and taste makers as we celebrate one of the hottest culinary scenes in the world.

canada unleashed FEB 26-28, 2017 |

ENERCARE CENTRE TORONTO

| RCSHOW.COM

Celebrating 150 years Leadership • Innovation • Culinary Excellence #rcshow17

FLOOR HIGHLIGHTS Enhanced food and drink experiences. 8 dedicated pavilions featuring key categories

INNOVATION

OFFSITE EVENTS

LEADERSHIP CONFERENCE

Cutting edge products and services to boost your bottom line

Culinary networking events as part of Hospitality Week

Half day business builder series packed with valuable insights for independent and multi unit operators

connect + grow your business register today @ rcshow.com


IT’S NOT JUST A NEW HOTEL BRAND.

IT’S A GAME CHANGER.

An innovative midscale hotel brand, Tru by Hilton, is storming the market. Development momentum is strong and enthusiasm contagious as our first properties get ready to open this March.

Be a part of the momentum. Become a partner at trubyhilton.com

Thanks to owner and customer input and insights, every detail is crafted for operational simplicity. Rooms, lobby and amenities allow guests to connect in never-before-seen ways.

Colleen O’Shea, Sr Manager U.S. East + Canada 773-263-4681 Colleen.OShea@Hilton.com

TRU IS ALREADY A WINNER: •

Boutique Design 2016 Gold Key Awards, Winner, Judges’ “So Cool” Award

Fast Company’s 2016 Innovation by Design, Finalist, Branded Environment

The Stevie Awards 2016, Bronze, Best New Product or Service of the Year, Consumer Services

Matt Clark, Sr Manager U.S. West 901-374-5317 Matthew.Clark@Hilton.com

Hotelier January/February Digital Issue  
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