Special report: Limited-service hotels

6 Feb 2009 by Mark Caswell

Who’s afraid of limited service? Tom Otley looks at what the new breed of hotel will offer tomorrow’s business traveller.

With the credit crunch firmly upon us, business travellers – or their travel managers – are looking at ways of saving money, and making what money they do spend on travel go further. At one end, hotels chains such as Premier Inn have posted record results in recent months, while at the other, the big hotel brands are trying to keep our custom by introducing limited service brands.

What is limited service? In short, these are hotel brands that don’t have full food and beverage operations (so no fine-dining restaurant), often have only limited meeting facilities, and the only 24-hour service is the one you where you serve yourself. But they charge less for offering less, and business travellers are flocking to them.

Yet there’s a recognition that for these new brands to work, they need to offer something other than a depressing low-rise on the edge of town. John Wallis is Hyatt’s head of marketing and brand strategy.

“Hyatt Place is probably the most researched brand that’s ever been launched,” he says. “We spent a lot of time trying to understand what the customer really wanted. To give an example, the research said people wanted a really big TV, so Hyatt Place has a 42-inch TV. When we were doing some value engineering, there was a school of thought about whether we needed this. But we listened to the customer, and now they are using the room, they all come back and say the thing they like the most is the big TV.”

The reason it was so important for Hyatt to get it right was that it had just completed the purchase of more than 120 Amerisuites in the US (see online news August 25, 2005, and in 18 months wanted to refurbish all of them. Making mistakes would have been very expensive, and would also have harmed a potentially persuasive franchise model.

“I don’t think in the history of the hotel business we have ever seen a brand go from zero to 120 hotels, all totally renovated during an 18-month period,” Wallis says. “It has allowed Hyatt to enter the select service group and position ourselves as a leader. It’s a very good franchise model and we have a good pipeline of them coming out.”

Hyatt doesn’t have a huge amount of hotels in the UK or Europe, and if it expands here it will very likely be the Hyatt Place brand that it introduces. On a recent trip to Chicago I took the opportunity to visit a Hyatt Place, one of several on the outskirts of the city, although the Itasca property, situated on the Hamilton Partners Office Complex housing the headquarters of several Fortune-500 companies, certainly has a good location, being only 13 miles from Chicago O’Hare airport.

Judging from this Hyatt Place hotel, the brand is a successful marriage of technology and personal service. On entry you have two self-service check-in terminals, but also a gallery host (receptionist) ready to meet and chat with you. The flat management structure of the hotel means that for the 120-plus rooms there are only about a dozen gallery hosts employed – and about 30 staff in total, including housekeeping – but whoever is available makes a point of giving you a tour of the public areas, pointing out the restaurant options and ensuring you know about the different facilities on offer.

There are no phones ringing, since reservations has been moved off-site to allow staff to concentrate on explaining the complimentary wifi and continental breakfast (6.30-9.30am) and two computer terminals (“the e-room”) with a printer for printing off boarding passes and other documents. Most impressive of all, you can be in your room, check in for a flight, select the printer in the lobby, then come downstairs and key a security key into the printer, ensuring your documents aren’t being read by some other business traveller.

The public areas include the Great Room, which is a seating area with tables; the Den, with comfy leather-style chairs in a small open room with a TV, good for informal meetings; and the Bakery Café, which serves Starbucks coffee, affordable snacks ($5.50 for a sandwich and large bag of crisps) and hot items, 24 hours a day. The Starbucks coffee, including the full choice of cappuccino and lattes, is served in good-sized coffee mugs, and alcohol is available ($3.50 for a bottle of domestic beer, $4 for imported). Bottles of Hyatt Place-branded wine – Canvas, by Robert Mondavi – are also on offer ($6 for 175ml).

Hot food is well priced and served with home-style cutlery and plates. The prices for food aren’t posted, encouraging interaction – and presumably sales – between guests and staff, and staff don’t wear name badges, instead introducing themselves. For the shy, there’s also a self-service electronic terminal where you can choose your meal and pay by swiping either your room card or a credit card.

It all looks very informal, but behind the scenes everything has been designed in accordance with consumer research. There’s a signature scent to the hotel, and the lighting in public areas is controlled automatically during the day, dimming towards the evening.

Hyatt has kept the large rooms (suites) of Amerisuites, dividing them into a seating area – Cosy Corner – and the sleep area, with a 42-inch plasma screen between the two. There is a tea and coffee-making area and a good-sized desk with a electrics console, allowing for easy charging of electrical appliances and including lots of sockets for playing music and entertainment through the TV screen. The beds are the Grand Hyatt beds, which are consistent across the Hyatt chain. There is an iron and ironing board, a large fridge (no minibar), paid-for entertainment, cordless telephones, good mirrors and lighting, a clock radio and a shower and bath (new-build Hyatt Places will have only a shower).

The hotel also has a gym, a swimming pool and about 93 sqm of meeting space, something that perhaps not all properties will have, but that was retained from the original property. Each of these facilities has had money spent on it – in the gym, for instance, the exercise machines have TV screens and headphones, with towels, water and replacement covers for headphones available. The meeting rooms have been revamped and have LCD projectors and natural light. Rates start at $179 during the week and drop to $99 at the weekend, although at a Hyatt Place in a leisure destination this might reverse.

The Hyatt Place I visited was staffed by Hyatt employees. At the limited-service level, however, this isn’t always the case. The franchise model of hotels means that in some cases the management may be supplied by the name above the door, but in others by the owner of the property, or even a third-party company. That’s the case for the other property I visited, the new Aloft brand from W Hotels, under the Starwood group of hotel brands that also includes Sheraton, Le Meridien and Westin.

Although only a few miles away from the Hyatt Place, and even closer to Chicago O’Hare airport, the Aloft feels very different. The property is owned by Continental Properties and managed by Ambridge Hospitality (a helpful plaque tells you this in reception), although most guests will never worry about these operational niceties. In look, the Aloft is a strikingly different proposition than the Hyatt Place, not only because it is a new build and so more modern from the outside, but also from the feel of reception, which even on a cold Tuesday lunchtime has a lot of style.

Aloft is described as “A vision of W Hotels”, and definitely has the same copywriter: “A new destination sensation featuring loft-inspired design, accessible technology and a stylish urban attitude.” In reality, this means a W Hotel appealing to a younger demographic in non city-centre locations and for a much reduced price. The Aloft brand has been designed by Starwood with David Rockwell and the Rockwell Group, and has some distinctive touches, from the nine-foot-high ceilings, large windows and comfortable beds in the bedrooms, to large showers with Bliss spa toiletries, just as you’d expect in a W Hotel.

Aloft is radically different from Hyatt Place, something that is intentional, according to Brian McGuinness, Starwood's senior vice-president for Aloft hotels. “We had identified that there was a huge white space in the category of select service or limited service, and we looked at the Amerisuites for Starwood. But we wanted to develop the concept from the ground up and build our own,” he says.

As a result the Aloft properties have lots of colour and design, obvious from the moment you draw up outside the hotel. The staff greet you with an “Aloha” – no, I don’t know why – and are eager to help. There is free wifi in the lobby and bar.

The Aloft opened only a few months ago, at about the same time as an Intercontinental five-star hotel ( that was part of the same new development and was incredibly offering better rates than Aloft, so occupancy wasn’t high. Nevertheless, there were some fabulous-value rates ($129 for a room is a steal at this hotel). What you get for that money is outstanding. The technology in the room is the equal of the Hyatt Place, with the same-style one-stop connectivity station by the side of the workdesk, 42-inch plasma screen and Bliss toiletries in a eco-friendly dispenser.

The property has 251 rooms, large for an Aloft, though comparisons seems strange when this was only the fifth to open worldwide (at the time of writing, there are about 20 open; the first to open in Brussels in 2010 will have 150 rooms). It also doesn’t have a restaurant – the “re-Fuel by Aloft” eating area is really only snacks – but it does have a lovely swimming pool (“Splash”) and gym (“re:charge”) and an extremely trendy bar called, confusingly enough, “w xyz(SM)”. There’s a four-panel LCD TV screening wall, free wifi, or you can play on the pool table or view the art hanging on the wall (which is by local artists and is available to buy).

So who is staying here? Hotel manager Rick Ross says the age profile is 25-45, although it’s early days, particularly since there has been no worldwide advertising campaign for Aloft and brand awareness is not huge. Still, being part of the Starwood group obviously brings benefits, since more than a quarter of guests are member of the Starwood Preferred Guest programme. I have to admit that having seen the Chicago Aloft, I had doubts about whether the brand would work, so on a recent trip to Washington I booked in for a night at the Dulles North property.

The stay didn’t start well, since the website said that on the hour every hour the airport shuttle bus would swing around to transfer me to the property, but it took two phone calls and a 30-minute wait before it appeared. Thereafter, however, the staff were superb. Select service it may be, but the receptionist helped me with booking taxis, advice on how to get from the airport into Washington DC, the weather forecast and even directions for the taxi driver on my return. The pool in this property was smaller than the one in Chicago, but the gym was a decent size, the wifi was free and the guests I spoke to all seemed happy with the hotel.

To me the only negative side is the lack of a restaurant. It may be part of the “select” idea, but in my opinion Hyatt Place has found a smarter solution to the problem of providing hot food. In Aloft there are some packaged salads, soups and pot noodles. Neither of the two I visited had a nearby restaurant, so if you wanted a full meal you either had to take a taxi somewhere or rent a car. In fact, the employee who operated the airport transfer bus had spent the previous evening taking guests to a nearby Italian restaurant. When I asked Brian McGuinness about this, he said: “If you have a 200-room hotel and if there are no other facilities in the area, we will allow a restaurant to be bolted on to the hotel. But it has to stand alone on its own identity.”

Of course, this is then left up to the developer of the property, so there’s no guarantee, and in fact most seem not to have added a restaurant, probably because of cost. It’s understandable, but for this business traveller it’s a “selection” too far, and I would rather have a restaurant attached. For those for whom a snack is enough, however, Aloft is certainly a cut above the norm.

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