Loews plans to stick to core goals
 
Loews plans to stick to core goals
14 FEBRUARY 2017 9:28 AM

Loews Hotels is eliminating its OE Collection soft brand and will better define what makes its core strategies work, according to Chief Commercial Officer Oliver Bonke.

LOS ANGELES—Loews Hotels’ niche as an owner-operator of its own brand of 26 properties has allowed the company to zero in on specific goals—a process which its executives said is paying off.

2016 was a “record year,” said Oliver Bonke, chief commercial officer for the company, during an interview at the Americas Lodging Investment Summit.

“We outpaced the industry in (revenue per available room) growth,” he said. “And we had a record year in terms of our overall system revenue.”

Having that specific focus also means the company can choose to deprioritize certain growth tactics. For Loews, that means eliminating the OE Collection soft brand it launched in 2015, which was originally designed to include smaller properties, in favor of better defining its core strengths.

“In times like this, we focus on what we do well, and we deploy resources against priorities,” Bonke said. “It’s OK to also not do certain things. Sometimes not doing things is a good decision.”

Growing the core Loews brand over the past year to different-sized properties helped the company realize—as Bonke put it—“the Loews core brand works.”

He cited a few recent projects as examples: The company’s early 2016 acquisition of the 120-room Hotel 1000 in Seattle; Universal's Aventura Hotel* under development in Orlando, Florida; and the Loews Sapphire Falls Resort, which opened in July in Orlando.

“Sapphire Falls is 1,000 rooms and Aventura is 650 rooms, so these are evidence of the success of these two unique growth models we have,” Bonke said. “We learned in the last year that our core Loews brand spans a beautiful spectrum in upper upscale and luxury. It lends itself to a hotel the scale of (790-room Loews Miami Beach Hotel), or as unique boutique as the Loews Hôtel Vogue in Montreal (with 142 rooms).

“This gives us more confidence that in a more narrow price point, and with several carefully selected hotel types, the Loews core brand works.”

Orlando continues to be a big part of the company’s growth strategy, thanks to its partnership with Comcast NBC Universal, parent company of Universal Orlando Resort. The Aventura property, which is scheduled to open in 2018, will be Loews’ sixth project developing on-site hotels with Universal.

“We’re not in the business of scale and distribution; we’re in the business of highly profitable, specific hotels,” Bonke said. “We look at upper upscale and luxury hotels with a good group and transient mix in high-RevPAR markets, and that’s our formula. We feel energized about that, and we feel confident putting our capital to work.”

Portfolio growth
With that guiding philosophy, Bonke said, Loews tries to keep its growth strategy simple.

“We’re very purposeful about white space and identifying where our core business model will be successful,” he said.

He cited Denver as just one of the markets in which Loews could adapt what he called “the Orlando model.”

“Could (that) work somewhere else?” he asked. “We’re thinking about that. There’s a unique value-driver in Orlando, and that’s Universal Studios, but where else could we use this opportunity to do what we do well, which is operate highly themed, immersive resorts, either under our own brands or under other options? That’s how we’re thinking.”

Customer-centric operations
Bonke said that as Loews continues its strategy to grow small and carefully, data management has become a big investment for the company.

All hotel companies “used to compete for stays, then we started competing for bookings, and now we’re competing for data,” he said. “We’ll never have the negotiation power of a Marriott, so instead for us it is more important to harvest, structure and operationally react to guests’ needs through better data.

“I want control; I want to capture relevant data that travelers are willing to share with us, and make it operationally available in a way it feels relevant and sticky with guests.”

To that end, the company completed a big CRM analysis project to refine its marketing strategies. Phase two of the company’s investment into data will focus on capturing data that relates to the guest service experience, Bonke said.

“We’ll take things the guest shares with us, structure it and serve it up to our operations teams to say, ‘Here is rich, deep data about a customer, and here’s your opportunity to excel,’” he said. “It’s about focusing on what makes the stay special, personal and relevant.”

* Correction, 14 February 2017: An earlier version of this story included an incorrect name for the Aventura Hotel. 

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