Executive Travel : High-Performing Hardage Finds Suite Success

Samuel Hardage, founder of the Hardage Group of Cos. and president of the Republican Party in San Diego, travels a lot on business.

He’s had his own share of complaints about being on the road. But whereas most people might have complained to management about the establishments where they were staying, Hardage decided to build his own hotel chain instead.

Today, Hardage directs Hardage Suite Hotels, a fast-growing group of all-suite hotels. At such inns, every room has both a bedroom and sitting-living room. His properties, which include nine franchised Residence Inns as well as Chase Suites and Woodfin Suites, have consistently outperformed hotel industry standards. Hardage expects to open seven more properties by the end of June.

According to Smith Travel Research, an industry market research firm, the company’s Woodfin properties posted a 78.8% occupancy rate in 1994, compared to an overall industry average of 65.2%.

About 82% of Hardage’s business comes from Fortune 500 company travelers. His secret? Hardage, who has an MBA from the Harvard Graduate School of Business Administration and was the 1982 Republican nominee for governor of Kansas, likes to think he remembers what didn’t work for him.

“I was in Tokyo once and needed to send a fax and make copies at 7:30 a.m.,” he said. “But the business center where I was staying wasn’t open. I don’t need a business center open 9 a.m. to 5 p.m. I need one open 5 p.m to 9 a.m.”

As a result, Hardage’s Woodfin Suites have 24-hour business centers with fax machines, copiers, personal computers and printers.

“Also, I didn’t want to be nickel-and-dimed for things,” said Hardage, who once had to pay $46 for an incoming fax.

Hardage offers his guests complimentary fax, copier and computer services.

But he didn’t just listen to his own voice. His company spent 2 1/2 years on market research to develop Woodfin Suites, which he calls the first second-generation product in the all-suite market. The first Woodfin Suite Hotel opened in Newark, Calif. in 1987.

To conduct the research, Hardage built a prototype suite with flexible walls. After each focus group, he moved the walls and furniture around, trying to find an optimum size and layout.

In some focus groups, female business travelers said they liked the openness of a studio layout but not the idea of having a bed in the work space.

“We fixed that by putting double doors between the sitting area and the bedroom,” he said. Other amenities, such as complimentary grocery shopping service and full hot breakfasts, also grew out of listening to what business travelers said they wanted.

Hardage has been a believer in the all-suite concept from its earliest years, when he held the first Residence Inn franchises in Texas and Florida in 1984.

Many people were skeptical of all-suites in the beginning, he said. “All the experts said it would never account for even 1% of the [room] supply.”

In fact, all-suite hotels now account for between 4% and 5% of all hotel properties and 20% of the upscale market, according to Randy Smith, president of Smith Travel Research. The number of rooms in all-suite hotels has been increasing at a rate of 6% a year annually for the past five years, which is about triple the rate of increase for the hotel industry as a whole. There are about 1,240 all-suite hotels in the country, and their occupancy rates are about 21% higher than the national average for all hotels.

Part of what has driven the growth is the change in business travel habits over the past few years, Hardage said. “Travel is a large expense for most companies, and every company is interested in keeping expenses down.”

At the same time, however, the people who travel demand a certain level of service., he said. “Companies for the last six or seven years have really been focusing on making their travel dollars go further. We see that in corporate travel departments being much tougher in negotiations today.”

All-suites are not budget hotels. Their rates are comparable to a Marriott, Hyatt or Hilton, Hardage said. But they are stealing market share away from other business-class hotels by offering a different kind of environment.

What don’t you get at an all-suite hotel?

“You don’t get this,” said Hardage, sweeping his hand around the elegant dining room at the Regent Beverly Wilshire Hotel. But you do get refrigerators and groceries, silverware, separate work and sleeping spaces, 24-hour access to business services and a social hour during which guests can mingle.

That’s what business travelers are saying they want, Hardage said. “And we’re getting more than our fair share of them.”

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