Hotels seek out next big thing in the lobby

By Peter Henderson - Reuters Summit

LOS ANGELES (Reuters) - Hotel guests really shouldn't miss the next big thing in lodging: the lobby.

Having added softer beds, baths with two shower heads and loads of marble to rooms, hoteliers now see their oft-neglected biggest room as the new draw.

The level of luxury in the average guest room has risen in recent years as hotels compete for guests willing to pay top dollar for a good night's rest in a sweet suite.

With the industry now recovered and growing well, hotel executives say the search is on for new ways to stand out, from urban-style loft accommodations to self-service kiosks that let guests zip past lines and straight up to their rooms.

At least two major chains want customers to spend more time in their lobbies, turning low-income, unfriendly caverns into money-producing advertisements for their brands.

Starwood Hotels & Resorts Worldwide Inc. (HOT.N: Quote, Profile, Research, Stock Buzz) already refers to the lobby at its W hotels as the living room and urges guests to stay awhile.

"Why should they be leaving the hotel and hanging out at the nearby Starbucks?" Starwood Chief Financial Officer Vasant Prabhu said at the Reuters Hotels and Casinos 2007 Summit in Los Angeles this week.

Next, Starwood wants to make technology a feature at Sheratons with an Internet lobby lounge concept -- "Link @ Sheraton."

Rival Marriott International Inc. (MAR.N: Quote, Profile, Research, Stock Buzz) is thinking along the same lines.

"Those lobbies have been too quiet," Chief Financial Officer Arne Sorenson told the summit. The hotel chain is considering open-plan lobbies with restaurants, for instance.

Like Hilton Hotels Corp. HLT.N, Marriott is considering self-service check-in booths.

But Sorenson argued that service would still be the top criterion, and that even a quick response to a plugged toilet could build loyalty, if the customer felt taken care of. "The first point here is, it is all about service," he said.

ASPIRATIONS

One area of debate is technology. "We don't think technology of itself can make money, because it is expected," said Laurence Geller, chief executive of luxury hotel owner Strategic Hotels & Resorts Inc. BEE.N.

Geller said younger "Generation X" guests and Baby Boomers viewed shopping as a major leisure activity. "You are trained to spend," he told a group of relatively youthful reporters.  Continued...