LRAWORLDWIDE NEWS - Vol. 3 - Issue 1 - First Quarter 2001 The Leader in Brand Performance & Quality Assurance Consulting Consultants to the Hospitality, Travel and Senior Living Industries

Spotlight on Sol Meliá			Gabriel Escarrer		Agustin Serrano
Spain's Largest Hotel Company Becomes Global Leader
Clear focus on brand identity, customer loyalty and quality drives company performance

The August 2000 acquisition by Sol Meliá of the Madrid-based TRYP S.A. Hotel Group not only consolidated Sol Meliá's position as the leading Spanish hotel company, with 201 hotels in Spain, but also vaulted the company into the ranks of the largest hoteliers worldwide. Following the TRYP acquisition, Sol Meliá ranks as the 10th largest global hotel chain, with approximately 410 hotels in 32 countries, comprising over 102,000 hotel rooms. The company is the largest resort hotel company in the world and the undisputed leader in Spain's business and resort markets. As Spain is the world's second most-popular tourism destination, this is a significant accomplishment. In addition, Sol Meliá has further secured its position as the number one hotel company in Latin America and the Caribbean, the second largest in Europe and the seventh biggest hotel company in the world as measured by market capitalization.

Like the other leading multi-brand global giants, such as Accor, Bass, Hilton, Marriott and Starwood, Sol Meliá has created a number of different brands over the years to meet their customers' needs. The Meliá family of brands includes Gran Meliá (a 5-star deluxe brand), Meliá Hotels (a first-class, flagship brand) and Meliá Confort (a mid-price, city-based brand). The Sol brand family includes Sol Hotels (a deluxe, resort-based brand), Sol Elite and Sol Club (first-class, resort-focused brands) and Sol Inn (an economy brand). The brand family also includes Paradisus Resorts, an economy resort offering. Recently, the company introduced a new, exclusive hotel concept called Meliá Boutique. Sol Meliá expects to soon have over 25 of these luxury hotels, all to be located in the historical center of major European cities, responding to the needs of discerning travelers seeking a smaller, more elegant and modern hotel. This brand concept was first rolled out in Paris during 1999.

The company is not as well known in North America as it is in the European, Asian, Latin American and Caribbean regions. Led by the company's Chairman, Gabriel Escarrer, Sol Meliá is highly regarded worldwide for operational excellence, product and service quality, solid financial performance, diversity among and consistency within the company's various hotel brands, innovative design and architecture, aggressive application of e-business and technology, an innovative central reservations system, and strong quality programs. Perhaps more importantly, Sol Meliá's senior management has fostered an environment that supports a positive corporate spirit and culture that drives loyalty. Meliá focuses on the sustainable satisfaction and loyalty of Sol Meliá's guests, the company's 31,000 employees, as well as its shareholders, partners and hotel owners.

Melia Colbert Boutique Hotel, Paris
Meliá Cancún Beach & Spa Resort, Cancún, Mexico

Sol Meliá's slogan "Todo es Posible" (Everything is Possible) and the use of the old hotel front desk bell symbol, capture the company's spirit and service culture as well as their commitment to exceeding their guests' expectations and creating memorable hospitality experiences. Recognizing Sol Meliá's important position and contribution to the industry, the industry has bestowed upon the company and its chairman and founder, Gabriel Escarrer, several prestigious awards, including "Corporate Hotelier of the Year" by Hotels Magazine and the "Lifetime Achievement Award" bestowed by the International Hotel Investment Forum.

Sol Meliá has long been admired for its superior quality and personalized service. This results from the company's keen focus on servicing what it considers its five customers...guests, shareholders, hotel owners, partners and employees. Sol Meliá was the first company in Europe to obtain ISO 9002 Quality Certification for hotel management services and quality guarantees.

Sol Meliá's well-designed quality program ensures the consistent delivery of hotel service and product worldwide. Agustin Serrano, Sol Meliá's Managing Director for Quality and Technology, is responsible for the company's quality initiatives. Mr. Serrano has instituted comprehensive and innovative programs and systems for measuring and enhancing operational excellence, guest satisfaction and loyalty. At the core of these processes is a focus on ensuring that guests consistently receive "value for money", and that guest problems are proactively resolved by the hotel staff. In the company's view, it is each staff person's job to take personal ownership of and resolve each guest's problem.

Components of the system include audits, guest surveys, customer research, specialized trainers, hotel-based employee quality teams, environmental managers and a Quality System following the guidelines of the Spanish Hotel Quality Institute. Over ten company hotels have already obtained their "Q" certificate, and others are in the implementation stage. In addition, Sol Meliá recognizes the importance to the guest of delivering consistency within a brand portfolio, and towards this end rigidly enforces product and brand standards. A dedicated program of ongoing hotel modernizations and renovations backs this up. Product, service standards and virtual training programs are all available via the Internet. A risk analysis and "Critical Point Control" system ensures hygiene and sanitation management at the hotels.

And, Sol Meliá is committed to protecting the environment and infrastructure where they operate hotels. The company was the first Spanish hotel group to develop a formalized Environmental Protection Plan and manual. This environmental policy has led to the company receiving a number of international awards and environmental citations. For example, the Meliá Bali in Indonesia obtained the annual "Green Globe Commendation 2000" from the World Travel and Tourism Council, and a large number of Sol Meliá hotels have been awarded or obtained ISO 14001 and EMAS certification. Gabriel Escarrer, Chairman, expressed Sol Meliá's commitment to the environment..."The future of tourism must be based on the production of products integrated with their natural environment. Nature and all of its resources provide tremendous added value. It must therefore be respected and taken into account in the design and operations of all new hotel projects."

Sol Meliá's clear vision and commitment to their customers, employees, shareholders, owners, and partners, combined with the organization's unique culture, ensure that the company will continue to distinguish itself on the global stage, enjoy the respect and recognition of their worldwide competitors and generate a loyal following for the company's diverse family of brands.

Red Lion Brand Flourishes Under Hilton Ownership Their differences prove to be a strength The scenario: A small start-up - some might say upstart - hotel chain with a 40-year history and its own way of doing things is supported by a large, internationally recognized, preeminent hospitality company. Commitments are pledged. What's the likelihood of success? Actually, the outlook is bright. The participants - Red Lion Hotels & Inns and Hilton Hotels Corporation - although superficially different, are really fundamentally quite the same. Both have strong name recognition, strong brand awareness among guests and aggressive growth strategies. Both firmly believe in creating value for their guests, owners, shareholders, team members, strategic partners and the communities where each hotel is located. They just go about it differently. Red Lion Hotels & Inns began over 40 years ago in the Pacific Northwest. When Hilton Hotels Corporation bought Red Lion through its acquisition of Promus Hotel Corporation, Hilton was able to establish an immediate presence in the mid-market full service hotel segment. By the end of this year, Red Lion will have 40 properties, and by the end of 2001, Red Lion expects to total 75 full and limited-service facilities.       (Left to Right) Red Lion Hotel Kelso/Longview, Washington; Red Lion Inn & Suites San Diego-South Bay, California; Red Lion Hotel at the Quay, Vancouver, Washington; San Diego Red Lion Hanalei Hotel, San Diego, California What makes this relationship so successful? In large part it can be directly attributed to the encouragement and support of Hilton Hotels Corporation to allow Red Lion to participate in areas where it makes sense for the brand and to operate separately where it doesn't. Red Lion participates in Hilton's extensive sales network, central reservations network, and vast procurement system. This support, combined with a unique frequency program partnership, and the reputation of the Hilton name, allows Red Lion to compete on an even playing field with national mid-market brands much larger in units than the current Red Lion. And for the first time in its history, Red Lion is expanding its presence through franchising. Brand standards have been established and quality evaluation and guest survey programs are in use at each property. Unlike other Hilton properties, Red Lion has its own fre.quency program, the Red Lion ClubTM, that rewards guests and has executed its own airline partner programs. These and some other brand specific differences like Red Lion's own marketing and development infrastructures, allow Red Lion to operate expediently and at a lower cost in order to meet the needs of mid-scale hotel owners searching for an alternative to their current brand or independent status. Future plans for Red Lion include continued expansion in the West followed by moves into New Mexico, Kansas, Missouri, Indiana and Minnesota before moving further eastward. By recognizing their differences, Hilton Hotels Corporation and Red Lion Hotels & Inns have put together a winning combination that will no doubt benefit travelers and hotel owners for years to come.

LRA CEO Speaks on Branding to Executive Office Suites Industry Convention

Rob Rush

Rob Rush, President and CEO of LRAWorldwide, made the key-note luncheon presentation to the Alliance Business Centers Network's Owners' Forum, held recently at the Hilton in the Walt Disney World Resort in Orlando, Florida. The event was sponsored in conjunction with the Executive Suites Association (ESA) Annual Convention. ESA is the international trade association representing the executive office suites industry, with over 900 office locations worldwide. The Alliance Business Centers Network is the largest association of independent executive office suite operators. The organization is comprised of 75 member companies offering over 200 locations throughout North America and Europe.

The executive office suites industry, also referred to as instant offices, office business centers, shared office solutions and executive office suites, offers a one-stop global office and real estate solution to corporations and individuals. These are shared office facilities that are fully equipped, staffed and furnished. The industry provides cost-effective and efficient office environments consisting of office space, secretarial services, receptionists, telecommunications, conference facilities, video-conferencing, mail handling, Internet access and more. Executive office suites present an alternative to setting up and managing a conventional office...which encompasses finding the right location, negotiating the lease, designing and building-out the space, selecting vendors, selecting and installing furniture and systems, hiring and training administrative staff and other day-to-day details that must be addressed.

Office business centers arose spontaneously in a number of places in the 1960's and early 1970's. The industry expanded in the early 1980's and then flattened during the real estate recession extending from 1988 through 1992. During this period, the industry was made up of mostly local and regional firms. Over the past decade, several major global concerns have recognized an opportunity to create global offerings and branded products. As a result, billions of dollars have been invested for acquisitions and ground-up development, and the industry has undergone a significant rollup and consolidation. Today there are over 4,000 of these facilities in North America and 5,500 facilities worldwide.

The industry's consolidation, coupled with the office user's requirement and desire to lease a consistent and reliable office suite product anyplace in the world, has forced the industry to think seriously about traditional branding issues and the many benefits to be realized in operating like a brand...as opposed to simply operating as a collection of independent real estate assets. Mr. Rush's presentation, entitled "The Power of Brands and Loyalty" addressed many of these branding and customer loyalty issues. LRAWorldwide, the leading brand performance consultants, provide their global clients with the processes, systems and tools to better identify, distinguish, execute, protect and enhance their brands.

Airports Focus on Customer-Passenger Satisfaction JFK, LaGuardia and Newark International Airports driven to enhance passenger satisfaction and airport quality

Through a combination of skill, practice and perseverance - driven by a total commitment to their customers and their communities - The Port Authority of New York and New Jersey has seen traffic, investment, service levels and economic activity continue to soar at their three major airports in the New York-New Jersey region. The Port Authority of New York and New Jersey, the governing body of JFK, LaGuardia and Newark International Airports, is clearly committed to operating airports that are second-to-none. Dazzling new terminals, vastly improved airport access, enhanced airside improvements, unparalleled service, and appearance and courtesy are all part of the creativity and intelligent foresight that are bringing about radical transformations and setting new industry standards for America's major aviation facilities.

In 1998, JFK, LaGuardia and Newark Airports launched an unprecedented, aggressive and ongoing service improvement campaign to ensure that staff see the airports through the customers' eyes and deliver service levels they would be delighted with themselves. Passengers (customers) have indicated that they expect personal courtesy, facility cleanliness, clear signs, effective and unobtrusive security, convenient parking, and an ample variety of high-quality food, beverage and retail services. Through a series of surveys for departing and arriving passengers, airport managers are able to focus on areas where improvements will most significantly contribute to increased overall satisfaction for their customers.

It has been widely reported that airports with a variety of concessions, friendly service, clean gate areas and terminal facilities that make it easy for passengers to navigate through the airport scored higher in the J.D. Power and Associates 2000 Domestic Airport Passenger Satisfaction Study. Airport industry research reveals that satisfaction with airport facilities and airport staff are primary drivers in their overall satisfaction and desire to return. Airport cleanliness, maintenance, signs, functionality, and friendly and consistent service in connection with gate areas, restrooms, concession areas, food courts, baggage areas and parking fields all play a part.

However, achieving consistent, zero-defect execution of these critical hospitality deliverables is extremely challenging, and that's where LRAWorldwide's Airport QualityTrac^TM System helps drive success. This program consists of brand standards, operating procedures, inspections, assessments, interactions, training and measures of key performance metrics. The Airport QualityTrac^TM System is a tool to help ensure that the airports' brand promise of delivering a customer experience second-to-none is consistently executed, and customers' expectations are exceeded. Customers of JFK, LaGuardia and Newark International Airports are giving them high marks for the transformation in product and service that has already occurred.

LRAWorldwide Product Updates

Project Management & Property Improvement Services LRA's experienced Project Management Consultants can help you manage, coordinate, monitor and inspect construction, renovation, conversion or design changes at your properties and facilities. We can supplement the activities of your internal team, or provide these services on an outsource basis. We will save your company time, money, and travel costs as well as minimize the problems inherent in recruiting, training and managing an internal group. Services Offered:       Project Management Property Improvement Plans ("PIPs") Design Evaluations Monitoring Renovations and Design Cycles  Our global coverage means we can respond quickly to your on-site needs. We are an excellent resource for your company's design, architecture, development, construction, PIP, and project management departments. Airport QualityTracTM System International airport industry research clearly indicates that the cleanliness, maintenance and condition of airport facilities, as well as the quality of airport services and customer service are key drivers of passenger satisfaction and loyalty. Leading international airports look to LRAWorldwide and LRA's Airport QualityTracTM System to distinguish their facility and help ensure the consistent, zero-defect delivery of these critical hospitality expectations. Our program focuses on the cleanliness, maintenance, condition, security and functionality of airport facilities including gate areas, ticketing, restrooms, food courts, concession areas, baggage claim and parking fields. In addition, we concentrate on the friendliness, competency and overall service levels of airport employees and their ability to successfully resolve passenger problems. For Further information regarding LRA's Project Management Services or Airport QualityTracTM System, please contact Ms. Randi Allen, Marketing Director at +1.215.957.1999 Ext. 22 or via email at rallen@lraworldwide.com

LRAWorldwide is the leading provider of specialized brand performance and quality assurance consulting services to the global hospitality, travel and senior living industries. With offices in the US, Europe, and Asia Pacific regions, the company services clients throughout the world. Targeted industries include lodging, gaming, timeshare, senior housing, assisted living, corporate housing, transportation, travel services, food and facilities management, real estate, business and recreational facilities, CVBs, corporate travel and tourism.

LRAWorldwide News is a periodic newsletter designed to update clients and contacts on activities and news at the company, as well as the industries the company services. This publication is provided for information only. Permission to reprint these articles is granted, provided that LRAWorldwide is referenced and notified prior to use. If you have any questions regarding LRAWorldwide News or need additional information regarding the company, please contact Suzanne Troxel at +1.215.957.1999 Ext. 14 at the U.S. Headquarters or via email at stroxel@lraworldwide.com

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