Hotels Roll Out the Perks to Lure Biz Travelers

NEW YORK – Free high-speed Internet access. Reduced rates. Complimentary stays. Luxurious beds and pillows. High-end bath products.

The slump in business travel has prompted the hotel industry to offer perk after perk to lure back the road warriors they've come to rely on so much.

"[Business travel] is the bread and butter for most of these hotels," said Elizabeth Caligiuri, chairwoman of the hotel committee for the National Association of Business Travel (search). "That's what drives their revenue. They're going to do anything and everything to get those beds filled."

After a boom in the year 2000 and the first part of 2001, the business and leisure travel industries both took a nose-dive post-Sept. 11. Eyeing their shrinking budgets, many companies were forced to go into "business critical travel" mode — meaning they'd only approve trips that were crucial to revenues.

Overall hotel occupancy rates dipped to 59.2 percent in 2002, their lowest levels in 30 years, according to the American Hotel & Lodging Association (search).

This year, the war in Iraq and the SARS (search) scare in Asia also affected business travel, though by May and June the industry showed weak signs of rebounding.

"It seems to be coming back a little bit," said Bruce Serlin, hotel editor of Business Travel News. "Will that be sustainable? No one knows."

So hotels have done what they can to set themselves apart from the competition, in the hopes that business travelers will choose them during the current tough times.

The newest way some hotels are trying to appeal to the professionals is by offering free high-speed Internet dial-up in the rooms. That allows their busy guests to check e-mail and do other online work while they're on the trip — and their companies don't have to worry about the cost.

Until recently, many hotels either didn't have the fast-access option or charged a nightly or per-online-minute fee for speedy Web log-ons.

But chains are now starting to offer the service for free. Wingate Inns (search) was the first to jump onboard, soon to be followed by Comfort Suites (search), which plans to install free broadband at all its hotels within the year, and Hilton Garden Inn (search), which wants to have the service by 2004. Courtyard by Marriott (search) is also thinking of adding the amenity.

"Hotels are busy implementing different kinds of high-speed Internet access to make their hotels attractive for business travel," Serlin said. He called the high-speed perk the "key value-added amenity" right now, since so many business travelers bring laptops and convert their hotel rooms into offices away from the office.

Hotels have also been slashing their rates — especially on the weekends, when many business travelers would normally opt to go home — and offering deals like three stays for the price of two.

Marriott (MAR), for instance, has weekend rates starting from $49 that are good between Thursday and Sunday. Hilton (HLN) promises 20 percent off the lowest available room rates if the reservations are made at least 21 days in advance. Westin, Sheraton and other Starwood Hotels (HOT) properties have the three-for-two-stays and additional similar deals.

But Michael Handlery, chairman of the American Hotel & Lodging Association, said past experience indicates that lowering room rates doesn't necessarily benefit hotels.

"A lot of hotels have cut their rates, but history has shown it doesn't matter," Handlery said. "You may get some business, but not enough to pay for the rooms."

Hotels are also attending to the "little things" to attract weary road warriors: providing decadently comfortable beds and pillows — like Westin with its "heavenly beds" — or upscale shampoos and lotions — like Wyndham's (WBR) Bath & Body Works products and Starwood property W hotels' Aveda items.

Some business traveler hotels that normally charge for certain amenities — like in-room local or long-distance phone service, breakfast, airport shuttles and use of the in-house spa — have started offering those features for free.

Certain hotels have gotten particularly creative. Hilton now has the option of getting a room with a treadmill in it for $15 extra per day, and for $20 more a night, Westin has specially equipped rooms that double as offices, complete with ergonomically-designed chairs, laser printer/fax/copier machines, speaker phone and free local and long-distance access.

And most chains have become more and more elaborate with their preferred customer programs — offering everything from rooms tailored to the member's needs to special packages, discounts and gift certificates.

Still, industry experts say that an economic turnaround alone is what will give business travel the lift it needs — and hotels' creative perks can only go so far in drawing corporate guests in.

"They may be able to lure a traveler away from choosing a different hotel, but at the end of the day they do not generate new travel on their own," said Caligiuri.