French hotelier bringing no-frills lodgings to US
The natural way for a French hotel chain to break into the depressed and jam-packed American hostelry market would be to package ''joie de vivre'' and ''nouvelle cuisine.'' Right?Skip to next paragraph
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Not if you are Ibis, the fastest-growing French hotel chain. Ibis is crossing the Atlantic this year, opening hotels in Houston and Dallas, with more to come soon afterward. It aims to beat the Americans at their own game - providing clean and comfortable rooms at about the cheapest price around.
''We think Holiday Inn and Ramada have become too fancy, too expensive,'' says Patrick Sanville, director of Ibis's American operations. ''We think there is a gap in the market below them, but above cheap hotels which offer no amenities at all.''
Using this philosophy, Ibis has become a roaring success in Europe. Only nine years after it opened its first hotel in Bordeaux, there are now 75 Ibises, most in France, but some also in Holland, Germany, Austria, and the Ivory Coast.
Sales were up 30 percent last year to 365 million francs ($55 million), and profits increased 50 percent, to 20 million francs. To be sure, Ibis remains a pipsqueak compared with Holiday Inn, with its 1,800 or so hotels. All the same, Holiday Inn is watching its French cousin closely.
''Ibis is very well managed,'' says Jacques Yves Toulemonde at Holiday Inn. ''It's a good product for what it is.''
What it is, is a clean and comfortable, but Spartan and small, bedroom. Each room has a phone, bed, chair, and table, nothing else. The rooms are 10 by 13 feet, compared with Holiday Inn's 12 by 18 feet.
There is no lobby in an Ibis hotel to speak of, and only a very simple restaurant. The building itself is usually no more than a modern, white, architecturally antiseptic, midsize tower.
This is certainly not the expected French charm and style. But by being economical on fuel and employees, the concept has one simple advantage: prices of $35 to $40 a room, 20 to 30 percent below the cost of a Holiday Inn room in a similar location.
''We're not trying to sell a fancy French product,'' Mr. Sanville said. ''We're a budget hotel.''
Before Ibis, there was no such thing as a ''budget'' hotel here in France. Travelers stayed either in luxurious chateaulike lodgings or in the mom-and-pop corner hostel. The American-style chain motel-hotel was unknown.
The French hotel group, Novetel, saw this gap in the market. Novetel had already opened up a chain of Sofitel hotels, Hilton-quality lodgings which have played on the theme of the ''tradition of French hospitality.''
''We found that there were many travelers coming to us who didn't care about the big, luxurious lobby,'' Mr. Sanville said. ''But they wanted to be sure of minimum standards.''
So Ibis was founded. And so successful is the concept that it has now saturated the French market, establishing itself along the highways and in the center of all the major towns. Looking for new markets, the company naturally focused its attention on the United States.
''It's the biggest market in the world,'' Mr. Sanville said. ''It also is the most competitive.''
But Ibis thinks it has spotted the same gap that existed in Europe: between the luxury hotel and the corner dive. The contention is that Holiday Inn, Ramada Inn, and other formerly moderately priced outfits have upscaled too much.
''We are taking the American idea back to the States in its pure form,'' Mr. Sanville said. ''The commercial traveler and the traveling family need a cheaper alternative.''
As a result, Ibis has big plans for the States. The Houston and Dallas hotels are nearing completion and at least 12 others, spanning the entire country, are planned to be finished over the next two years. Ibis will manage most of the hotels itself, although some will be franchise operations.
Ibis is going ahead with this ambitious program despite the fact that the already crowded American hostelry market is depressed.
''Yes, it is a difficult moment in many ways,'' Mr. Sanville said. ''Occupancy rates are way down, but there are some advantages. Land prices have come down and financing is becoming more and more attractive.''
Ibis also figures that the recession makes its economy lodging the attractive solution to shrinking travel budgets. ''This is what we have found in Europe at least,'' Mr. Sanville said. ''Our occupancy rates have been going up even as the economy worsens.''
The question now is whether this Ibis potion can work the same magic in America.