By Joe Brancatelli
June 22, 2011 -- Survey after survey reveals that business travelers like hotels and pretty much despise airlines. Their decisions usually come down to one word: choice.

Airlines don't give you any, but hotel chains are all about choice. Just need a good bed, free WiFi, and a fast breakfast? There's Hampton Inn from Hilton or Holiday Inn Express from InterContinental. Looking for a business traveler's pit stop with all you need to work on the road? That's the forte of Courtyard by Marriott or Hyatt Place. Need suite accommodations at the right price? Hilton's Embassy Suites at your service. Want apartment-like living for longer stays? Say hello to Homewood (Hilton), Residence Inn (Marriott), or Candlewood (InterContinental). Boutique flash? Try W Hotels from Starwood or Hotel Indigo from InterContinental. Deluxe digs with hot-and-cold running luxury? Waldorf-Astoria from Hilton, Park Hyatt, Ritz-Carlton from Marriott, or St. Regis from Starwood will do nicely.

But all that "segmentation"—lodging industry jargon for creating specific hotel brands for targeted markets at a variety of price points—has come at a high cost. The middle ground of the hotel business has turned murky, and some big hotel chains are struggling to redefine their once-iconic full-service lodging brands.

Some of the lodging industry's greatest names—Hilton, Sheraton, Holiday Inn—are searching for new niches and images. After all, if business travelers can have exactly what they want at exactly the price they want to pay, why bother checking in at the old-line brands whose claim to fame has been offering a little bit of everything to everybody?

The level to which full-service hotels have fallen is starkly illustrated by the most recent Business Journals survey of the nation's leading brands for small-to-midsize businesses. Only two hotel chains cracked the Top 20 to lodge in a pantheon that includes Apple, Staples, and UPS. At No. 19 was Courtyard, the business-travel-specific division of Marriott International. At No. 4 was Holiday Inn Express, the "focused-service" spinoff of Holiday Inn, one of seven lodging brands in the portfolio of London-based InterContinental Hotels Group.

The success of Holiday Inn Express, which has opened more than 2,000 properties worldwide since 1991, is in contrast to the floundering fortunes of Holiday Inn itself. Founded in 1952 and named after the 1942 Crosby-Astaire movie that also introduced "White Christmas" to America, Holiday Inn was intertwined with the development of the nation's Interstate highways. Holiday Inn once fancied itself "the nation's innkeeper," but faltered as the brand passed from owner to owner and travelers started demanding more from their roadside lodgings.

"Holiday Inn customers were asking 'What are you? What do you stand for?'" admits Gina LaBarre, vice president Americas brand management at InterContinental. "We heard that loud and clear. We were so inconsistent that we had to fix it."

A billion-dollar overhaul completed last year hopes to reestablish Holiday Inn's business-travel bona fides. More than 1,200 franchisees were purged from the system during the last five years, and the remaining properties spent an average of $250,000 on improvements to bathrooms, bedding, and staff procedures. Even the iconic star-topped, neon-arrowed Holiday Inn sign has been scrapped. And later this year, the chain's "social hub" will begin replacing much of the existing public space at Holiday Inn hotels. The company claims the concept—an integrated lobby, bar, casual restaurant, and business center—will attract the "everyday business hero" that the chain hopes to woo.

"The middle still has a very compelling story and a lot to offer to travelers looking for value from their stays," LaBarre insists.

You'll also hear that from John Greenleaf, vice president of global brand marketing for DoubleTree, one of the full-service chains owned by Hilton Worldwide. In the lodging business, DoubleTree has been considered a "conversion brand," which means most of its hotels were once part of other chains. If business travelers thought of DoubleTree at all, it's because of the warm chocolate-chip cookies they ritualistically receive at check-in.

But five years into a $3 billion overhaul and expansion, Greenleaf says the chain's "cookie culture" also has been augmented by a "care culture" that focuses on finding ways to give better service. Although 70 hotels were dumped from the chain, it has grown to 250 properties in 17 countries. And the fact that DoubleTrees aren't similar from location to location—properties range from the stylish, 256-room Wit Hotel in Chicago to a 1,000-room behemoth in Orlando—is being used to stress the chain's quirky nature.

"Our discussion has to be about the guest experience," Greenleaf says. "We're not amenity-driven like the focused-service brands. We don't have a standard guest room. [Customers] look to us because our hotels are unique. Our research shows that's what they like best about us," he claims.

But unique has its limits in a business where business travelers have been taught to value the familiar and predictable. Much of DoubleTree's $3 billion investment has gone into making sure each property offers a "consistent sleep experience"—that's industry lingo for a branded bed, in this case the Sweet Dreams custom mattress, linens, and pillows—consistent in-house fitness facilities, and food and beverage outlets that reflect local dining preferences.

DoubleTree is even adding the phrase "by Hilton" to its name in an attempt to broaden its appeal as it expands globally. But the Hilton brand has its own problem. Its focused-service concept, Hilton Garden Inn, is growing much faster, and Hilton chains such as Hampton, Embassy, and Homewood Suites are far more consistent in product, amenities, and service delivery.

With a history that dates to 1909, Hilton has spent years trying to redefine its tired, fuzzy, full-service model. Although the chain's managers avoid terms like "repositioning," it is clear that major changes are coming. A new lobby design was unveiled in April—it, too, relies on a Starbucks-like common space where travelers can work, socialize, and purchase food and drinks around the clock—and Hilton bosses admit the chain needs an update.

"Three years down the road, you're going to see a brand transformed," promises Dave Horton, a longtime Hilton Worldwide executive who now oversees the Hilton Hotels franchise.

Yet Hilton's woes paled in comparison to the problems at Sheraton, whose lodging roots date to 1937. Although it was one of the two brands that real-estate whiz Barry Sternlicht used to create the Starwood Hotels chain in 1998, Sheraton has long been a bewildering mash-up of upscale resorts, down-at-the-heels hotels, and iconic center-city landmarks that had long ago ceded their market primacy.

Last year, for example Starwood pulled the name off the shabby Sheraton Manhattan hotel on Broadway in New York because it reflected so badly on the Sheraton brand. Hotel "deflaggings" aren't unusual, of course, but this one was: Starwood itself owned the block-long Sheraton Manhattan.

The 665-room hotel now trades as the Manhattan at Times Square while Starwood figures out how to revive the troubled property. Meanwhile, about $6 billion has been thrown at other Sheratons around the world. About 70,000 guestrooms have been renovated, 100,000 new beds (Sheraton's are called "Sweet Sleepers") have been installed, hundreds of hotels have received new lobbies and club lounges, and high-tech business centers co-branded with Microsoft have been opened.

But to show you how little $6 billion buys in the "brand-wide revitalization" game these days, only about half of the more than 200 Sheratons in the United States have been fully renovated. Many others are tired reminders of the mushy middle ground of full-service lodging. That's no small problem for Starwood, since the company's growth in developing markets such as China and India has been tied to the Sheraton brand. Starwood says $5 billion more will be spent to open 50 additional Sheraton hotels by the end of 2013. That would bring the Sheraton line to about 500 hotels in more than 70 countries.

Whether any of these rebirths can salvage full-service hotelkeeping is an open question, of course. Business travelers have learned the lesson of segmentation well. But there is a template for success. For all its issues with Sheraton, the other founding brand of Starwood, Westin Hotels, has been a rip-roaring success.

It was the first hotel chain to market a specialty "sleep system"—the so-called Heavenly Bed—and then followed it up with the Heavenly Bath, an upgraded package of bathroom fixtures and amenities. Westin lobbies usually feature a "destination bar"—a place where locals drink even when they aren't hotel guests—and the chain cultivated an edgy image with advertising that coyly asked, "Who are you sleeping with?" Westin's successful positioning has helped Starwood create the even edgier W Hotel chain, W's sub-brand called Aloft ("a vision of W"), and the "green" Element Hotels by Westin.

"Just having a famous name doesn't cut it for guests or for us as a business proposition," one hotel executive told me last week. "Unless our full-service brands can hit definable market niches and be compelling alternatives to other segments, they won't survive over the long term."

The Fine Print…
Lest you think classic hotel names can't go the way of Pam Am, TWA, Pontiac, or Plymouth, consider the obvious: Seen a Statler Hotel lately? It was the first great full-service brand. Stayed at an Adam's Mark or Stouffer's lately? The Adam's Mark chain has disappeared and its properties were reflagged with other brand names. Stouffer's was sold several times and is now part of Marriott's Renaissance brand. Other names that once moved hotel markets—Jack Tar, Harley, Amfac, Pick—are gone too.
ABOUT JOE BRANCATELLI Joe Brancatelli is a publication consultant, which means that he helps media companies start, fix and reposition newspapers, magazines and Web sites. He's also the former executive editor of Frequent Flyer and has been a consultant to or columnist for more business-travel and leisure-travel publishing operations than he can remember. He started his career as a business journalist and created JoeSentMe in the dark days after 9/11 while he was stranded in a hotel room in San Francisco. He lives on the Hudson River in the tourist town of Cold Spring.

THE FINE PRINT This column is Copyright © 2011 American City Business Journals. All rights reserved. Reprinted with permission. JoeSentMe.com is Copyright © 2011 by Joe Brancatelli. All rights reserved.