Luxury Hotels Are Thriving in Sluggish Market : Hospitality: Occupancy is up 6% at pricey inns. The new Ritz-Carlton is counting on its service to keep it competitive at the upper end.
When Marcus Gan first turned up in August to interview for a job at the new Ritz-Carlton Hotel in Marina del Rey, he was told that he would have to have his hair trimmed--it was below his collar--if he were hired.
Gan, a Los Angeles native who starts work as a cafe server when the luxury hotel opens for business Monday, got the haircut.
The hotel’s strict dress code and conservative style--its employees are trained to greet guests with a “Good Morning,” never a “Hi”--exemplifies the 16-hotel chain’s philosophy of service. It’s a philosophy that the Marina Del Rey hotel must get its staff to practice scrupulously if it hopes to thrive at a time when occupancy rates are slipping in Los Angeles County.
The good news for the $75-million hotel is that the strongest segment of the local hospitality market is the luxury category, in which Ritz-Carlton competes through such measures as maintaining a staff-to-guest ratio of 1.8 to 1, almost twice the industry average.
“What we’re seeing in Los Angeles is occupancy has decreased this year primarily as result of supply outpacing demand except in the luxury market, which has increased occupancy and rates,” said Wendy Kheel, a manager in the Los Angeles office of Laventhol & Horwath, an accounting firm.
Kheel estimated that the average occupancy rate this year for Los Angeles County hotels will be about 66%, down from 72% in 1989. Daily room rates are expected to average $78, up from $75.55 last year.
In the luxury hotel market, by contrast, six hotels in the Beverly Hills area are enjoying increases in both occupancy and rates. Occupancy rates this year should average 75%, compared to 72% last year; rates should increase to $273 on average from $257, Kheel said.
With suite rates as high as $310 per night, that’s the pricey realm the new Ritz-Carlton, owned by W. B. Johnson Properties of Atlanta, hopes to occupy.
As Marcus Gan and 1,600 other job applicants discovered, Ritz-Carlton goes out of its way to select the right employees, using a recruitment process it has perfected during the past five years.
“We’re the only hotel company that uses it,” said Margaret Deane, director of human resources at the Marina del Rey hotel. “We look at the person’s attitude, motivation and communication skills, how they look at their work and at their past behavior to help predict their future behavior.”
Added John Dravinski, the hotel’s general manager: “Our employees are treated with as much respect as guests. We say ‘good morning’ to our clerks and guests.”
During their intensive one-week training prior to opening, employees are told the philosophy of the company and trained to anticipate guests’ needs. “They give you standards and tell you why,” said Jennifer Diette, who has joined the hotel as a front-office receptionist.
“They want to project a certain image,” Diette explained.
