Delta Hotels and Resorts made headlines last month after announcing the end of its management of Canada’s largest hotel, the 1,590-room Delta Chelsea.
Delta Hotels and Resorts, Toronto, said brand consistency was the primary reason it was exiting the Toronto hotel, asserting that the property owner Great Eagle Group, Hong Kong, decided not to renovate the property to Delta’s new more upscale brand standard.
To find out more about Delta’s brand repositioning from 3-star to 4-star, HOTELS spoke with Ken Greene, Delta Hotels and Resorts’ newly-appointed president and CEO.
HOTELS: When did Delta decide to reposition its brand, and why was this decision made?
Ken Greene: We had new ownership when British Columbia Investment Management Corp., Victoria, British Columbia, bought Delta Hotels & Resorts from Fairmont Hotels and Resorts, Toronto, in 2007. The new ownership bought some hotel properties here in Canada as well and initiated the repositioning.
The whole strategy started in 2010 with an enormous amount of consumer research. Delta started looking at what Canadian consumers wanted and came up with a new vision of the guestroom the ModeRoom. In it guests can get hooked up and connected with the world, get onto their mobile devices to connect with business associates, can connect to big-screen TVs with one of the highest Internet speeds in Canada. We started this wonderful room renovation, and it’s really about adapting our rooms for the guest and not the other way around. Guests want brands to adapt to them, they want something custom-made for them.
Since then we have been renovating properties, and we have already renovated nine of 10 hotels we own-operate. By 2014 we’ll have half the portfolio renovated and in 2015 we’ll have it all renovated.
HOTELS: What is the total amount Delta will invest in upgrading its company-owned properties? What is the total amount the owners of non-company owned Delta hotels are investing?
Greene: I can’t give you specific numbers, but it is significant. It depends on the condition of each property. Every property that we have renovated, they all have been very significant investments. What’s most important is that every guestroom is redone and many public areas as well.
HOTELS: What changes are being made to public areas?
Greene: We are adding Starbucks kiosks and stores. We will be looking at our food and beverage strategy, too.
HOTELS: What are the differences, in terms of design and amenities, between the old Delta and the repositioned Delta?
Greene: We have put a lot of thought and innovation into how a guest walks into the room.
Someone can hang up his or her jacket without opening up a closet. Then there is a neat place to put their handbags and keys and wallets. Then in five steps you can be sitting down at the SmartDesk and plug in multiple devices.
The desk has been designed in a very sleek way that gives you lot of space. A lot of times in hotels you see the dining guide, you’ll see a lot of clutter. You as a guest have to adapt to that and move it all away.
Guests want to be able to sit down in an ergonomic chair put all their stuff on the desk and then plug into the big screen TV and plug into the world.
People want to be able to Skype on the big screen, people want to stream their favorite videos. The room is designed to accommodate that in a quick way.
In the bathroom, we’ve made it like a spa, in sort of the same style as the desk. We keep it clean and not too filled with amenities. We have a special shelf with shampoo and mouthwash sitting in the shelf.
HOTELS: Who is the target customer of the repositioned Delta, and how will Delta market the brand to them?
Greene: Delta’s number-one customer base is the business customer. Most business customers today are male and north of 45. But we are starting to attract, with the new rooms, a younger crowd, including more females and those aged 30 to 45.
In terms of how we brand it, we continue to renovate the portfolio, which allows us to communicate what the new Delta is.
We will introduce a new television campaign shortly. We will supplement that advertising through traditional and social media channels. We think the online and social media marketing will be cutting-edge and will help us attract some new guests we have not had in the past.
Predominantly today our customer base is Canadian. But we’re going to see an inflow of international guests over the next decade. You are probably going to see us target feeder markets like Asia and Europe. Asia is going to be a big one for us, as there is a tremendous amount of excitement with the growth in India and China.
I’m quite bullish on the opportunity and how we can position ourselves to capture those guests. Especially because even though only about 10% of our guests today come from outside Canada, over half our employees come from other countries.
So for example, we are training our employees that guests from China should never be put in a room with the number 4, just like we skip 13, they skip 4 and 14. Four has bad vibes, a bad meaning for them.
HOTELS: How is the Delta portfolio currently performing in terms of occupancy, ADR and RevPAR?
Greene: We are cautiously optimistic about 2013. We have seen upticks in all the key metrics, and we certainly want to over-index in our competitive set.
The renovations are driving increased business.
HOTELS: Who are the primary competitors for the repositioned Delta?
Greene: The Marriott and Hilton brands are obvious competitors, as well as Sheraton.
HOTELS: What is the status of Delta’s pipeline? Any plans to expand outside of Canada?
Greene: Our strategy is to expand by own-operate, third-party management deals and franchising. Our preference is own and/or manage, but franchising is a model that works for tertiary markets.
Our strategy right now is the complete our repositioning in Canada. We are in the process of developing a five-year strategic plan, and in that are various growth strategies outside of what I just mentioned, but we’re not quite there in terms of announcing those.