Preferred Hotel Group’s 1,600-point hotel inspection is intense.
It counts how many times a phone rings before it’s answered and tracks whether an article of clothing left behind by customers get sent back to them via snail mail or overnight.
Hotels need to score at least 80% to make the grade and join the company’s growing roster of upscale independent hotels in the U.S. and around the world. Preferred now has relationships with 650 properties, ranging from boutiques to resorts, that specialize in unique experiences for travel lovers and road warriors alike.
The Business Journal estimates Preferred—with executive offices in Newport Beach, where it has about 40 workers—gets about $70 million in annual revenue by providing marketing, sales and operational support to member hotels. It doesn’t directly manage any of them and instead offers itself as an umbrella brand that helps boutiques retain and add customers. Additional support comes from the company’s largest office in Chicago, with about 65 people, along with others around the globe.
Uniqueness
Being unique is key, as Preferred—under newly appointed Chief Executive and President Lindsey Ueberroth—and the rest of the hotel industry scramble to keep up with shifts in how people want to travel.
The trend is toward customizable experiences that go well beyond sitting in tour buses and sleeping at chain hotels.
“If you just look at 10 years ago, the way that people shopped for travel was very different, with all these review sites and ways for a consumer to really look at how good is a hotel,” said Lindsey, who was named to the top spot last week. “Before, it was, ‘I’m going to stay at a chain because I know it’s going to be the same regardless. Now, there’s this wave of consumers that have a lot of confidence in the independent hotel world, and that’s what they’re craving.”
It’s akin to using Yelp to find an authentic Indian food restaurant when in London, added Lindsey’s brother and Senior Vice President of Marketing Casey Ueberroth.
“Mediums like ours allow consumers to do that in the same way an iTunes or Yelp is doing, to tell people where to stay that’s authentic and real,” he said.
Preferred’s 2013 numbers show the movement away from mainstream travel agendas gaining traction.
The company added 126 hotels to its roster last year, and its executives believe the portfolio could swell to 1,000. Eleven of the additions last year were properties converted from chain affiliations to independent status. The shifts spanned the U.S. and world—the Hyatt Regency Irvine became Hotel Irvine Jamboree Center under its owner, Newport Beach-based developer Irvine Company. The Waldorf-Astoria in Naples, Fla., converted to Edgewater Beach Hotel.
And a Crowne Plaza in Beijing went independent as the V-Continent Beijing Parkview Wuzhou Hotel.
Preferred has a hard sell to prospective members: The company said it helped drive members’ revenue up 14% in 2013 compared with the year prior, to $834 million. Bookings for member hotels grew 17% last year, while average daily rates rose 6%.
The $122.46 billion U.S. hotel industry grew 6.2% last year, according to Hendersonville, Tenn.-based industry researcher STR Global. The average daily rate in the U.S. rose 3.9% to $110.35.
Lindsey and Casey’s parents, Gail and John—brother of former baseball commissioner and one-time travel industry executive Peter Ueberroth, who’s a partner in Pebble Beach Resorts—acquired Preferred 10 years ago. It had about 350 member hotels at the time.
John recently stepped down as chief executive to make way for Lindsey, and he continues to serve as chairman. Gail is chief marketing officer and vice chair.
Lindsey joined the company in 2004 as executive vice president and was named president in 2010, succeeding her mother.
Casey got his start at the company in 2005 as area managing director for the Western United States.
All four are owners in the company.
The younger Ueberroths believe growth is in the cards if Preferred continues to focus on an aspect of the business it has been hitting particularly hard over the past couple of years: elevating its brand through more marketing plays.
iPrefer
The big one was the iPrefer loyalty points program launched about six months ago.
Travelers earn points from participating Preferred hotels—up to 465 hotels now—and can exchange them for reward certificates that can be used as currency at member properties.
There are two sides to why the program makes sense, said Lindsey, who recalled her days at Andersen Consulting—now Accenture—when she filled out every frequent flyer and hotel loyalty program application she came across.
Employers promote those programs to employees as an added benefit to offset the grind of business travel. IPrefer caters to those road warriors, Lindsey said, but it’s also attractive to the other end of the spectrum: guests interested in the VIP treatment.
The point of distinction for Preferred’s loyalty program from the chains, Lindsey said, is that its membership offers “more interesting hotels to stay at than maybe the average chain.”
China Ready, rolled out in December, is another marketing program that set guidelines for participants on how to accommodate guests from China.
There also was the rollout of Preferred Fantasy Golf Challenge, an interactive game where people play for a chance to win weekly trips to golf resorts around the world.
Preferred also added sales and marketing executives in its various offices around the world to accommodate growth in places such as China, Brazil and the Middle East.
Casey called the raft of initiatives the “perfect storm” for the company and its brand as it looks to elevate itself in the marketplace and get more people to understand Preferred and what it does.
“I think we’re only getting better and better about sharing that story,” he said. “We’ve been doing this 10 years as a family, and it’s like we’re just finding a really pure gallop right now.”
It’s a nice feeling for a hotel company
run by avid travelers, with Casey and Lind-sey having “grown up on airplanes,” he said.
That love for travel drives a companywide desire to be at the forefront when it comes to consumer travel trends.
“One thing that we continue to really pay close attention to is what’s happening in the world of technology and online,” Lindsey said. “What are the things that consumers are gravitating towards to make it easier for them to book and create that transparency and then experiences? How do you get into food and wine or the arts or these other affinities that the traveler now wants?”
Part of that includes changes to the company’s website that shift how Preferred “talks” to consumers. Industry jargon such as “destination” has been removed from the website and replaced with “hotels & resorts.” Search results are easier to view with a new tiled layout. Websites in German and Japanese recently launched. And more changes are in the works to make it faster and easier for consumers to access information.
“Travel’s about passion—we’re in the business of passion,” Casey said. “We have corporate travelers, but most people celebrate travel. And one of our commitments this year is, how do we use all of our mediums to really just inspire people to get into travel?
“Right now, there’s a lot of, ‘OK, I go to Expedia, and I click and it’s 50 bucks less;’ but that’s not travel. And I think we’re having a lot of fun making [the website] do more than that. It’s about, how do you make [travel] come to life again?”
