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 Up Front With Martin B. Deutsch

martin THE U.K. BECKONS AS ‘SCARE’ WANES

BY MARTIN B. DEUTSCH

June 18, 2001 -- With the most overblown travel crisis in my memory beginning to recede, or at least stabilize, there’s a modicum of hope that the U.K. in particular and Europe in general will recoup some of the U.S. bookings lost because of hoof-and-mouth disease. (Of the European countries, only Italy seems to be on the way to a sold-out summer season.)

The feeling lingers that travelers confuse hoof-and-mouth — which does not affect people, just animals — with mad-cow disease, a fatal affliction that is carried in beef. To the best of my knowledge, the brief outbreak last year seems to have been contained, and no U.S tourists were ever afflicted. There’s a strong consensus on both sides of the Atlantic that industry efforts to differentiate the two diseases have been less than effective.

Spurred by curiosity, I accepted a recent invitation by Millennium Hotels to see for myself. I flew over on Virgin Atlantic, and spent five days in London and a weekend in Paris, commuting between the two capitals on the Eurostar train, my first exposure to the Chunnel. In London I met with Tony Potter, Millennium-Copthorne’s COO, who said, “The state of the U.S. economy is potentially more dangerous [to tourism] than hoof-and-mouth.” He identified the media coverage as a “major problem” in exaggregating the role of the disease.

Referring to the five major Millennium Hotels in London (the Tara remains a Copthorne), Potter said Americans have been a “bit cautious” and that the company’s city properties have been less affected than those in the countryside. From a record occupancy in recent years of 91 percent, the London group is currently running in the mid-80s. Commented Potter: “We’re spoiled.”

This decline was echoed in a later interview with Diana Banks, Millennium’s director of sales for Europe, who said that the decline in occupancy should be considered a “blip” that is rapidly becoming a nonissue. Beyond the disease scare, she also cited the U.S. “mini-recession” and drop-off in e-commerce. Banks also found that hoof-and-mouth had affected leisure rather than business travel.

Back to Potter, who stressed that practically all the U.S. bookings at Millennium’s London cluster came from travel agents in “one way or another.” In addition, such tour operators as Tauck use one or more of the properties. Right now the Millennium Mayfair, formerly the Britannia, receives as much as 29 percent of its volume from the U.S., the Knightsbridge 25 to 30 percent, Bailey’s 28 percent, Gloucester 18 to 19 percent and Tara 8 to 12 percent. (When I asked a corporate sales manager what percentage of her property’s business originates in the U.S., she replied, “Not enough right now.”)

Potter, who joined Millennium in September, 1999, believes agents will survive. “People still want to talk to someone,” he said. “They want personalized service from specialists, particularly for the more complex itineraries.”

He recalled that 25 years ago there were visions of a fully automated hotel. “There still isn’t one, and the human element is ever more important today,” he said. “It’s the same with agents.” Millennium plans to implement a Web site to encourage clients to book directly, but at full agent commission. Said Potter: “We don’t sell prime space on the Internet. We look to sell rooms that are not going to sell — we use the Web for last-minute bookings.”

Believing in Agents. A self-described “great believer in agents,” Potter speaks with decades of authority. Before Millennium he spent three years as CEO of Choice Hotels Europe, following 19 years with Hilton International in such posts as senior vice president for Europe and for North America, managing director of Hilton U.K. and general manager of the London Hilton. He estimated that in the next five years, the chain — which has 88 hotels worldwide — will add 40 to 50 properties. “Our strategy is growth,” he said, “but not at any price at any locale.” In the U.S. the company would like to add such cities as San Francisco and Atlanta (and maybe Las Vegas); U.K. targets are Edinburgh, Leeds, Bristol and a five-star property in London’s West End. Following the recent acquisition of Regal Hotels, Millennium now has an eye on Canadian Pacific and Fairmont.

Millennium’s diverse properties are generally rated four-star deluxe. (These stars are given by the government. The word deluxe is used by Millennium as a marketing tool.) In view of the diversity, Millennium is seen as a chain with a branding problem. Said Potter: “We could fix this overnight if we’d just throw $100 million at it, but that’s not in the cards.” He predicted that in the next few years, there’ll be a “great spurt in Millennium recognition, because we upgrade whatever we take over. The image will develop.”

In Paris, I spoke with Louis Vanheusden, general manager of the Millennium Opera, formerly Commodore, who spent a decade at Millennium and Copthorne. Barely affected by hoof-and-mouth, the centrally located Opera is running at 82 percent occupancy. About a third of its business hails from the U.S., with virtually all of it through agents. Vanheusden said the downsizing of e-commerce companies has shrunk, but not eliminated, the group business from such giants as IBM, Compaq and Yahoo! He also suggested that U.S. leisure clients who are uneasy about the U.K. choose such alternate destinations as France and Italy.

And that may be the case, even though there is no reason to overfly England, Ireland and Scotland. None! The U.K. and the rest of Europe are open for business. This opens the door to provide your clientele with highly attractive peak-season deals, all at a time when crowds may be less daunting than unusual. So what’s the beef?

This column originally appeared in Travel Agent magazine.

Copyright © 1991-2007 by Martin B. Deutsch. All rights reserved.