Howard Johnson Argentina: the local connection

by Lyda Durango

In 1999, Howard Johnson opened his first hotel in the city of Buenos Aires. History would change for the country's hotel industry when two years later the chain was a pioneer in opening the first branded hotel outside the capital, in Rosario, province of Santa Fe, because until that moment no hotel chain had set its eyes,  nor its money, outside Buenos Aires. Almost ten years later, the chain proudly has 20 hotels throughout the country, of which only five are located in Buenos Aires. 21 more are being built.

Beyond the province

The arrival of Howard Jonson in Argentina also marked the beginning of a success story and that initial hotel was the first stone of a hotel development that has been based on exploiting the potential offered by the interior of the Argentine Republic. "What surprises many is that we do not open hotels in the most profitable places but we open hotels throughout the country,"  explains Alberto Albamonte, president of the Howard Johnson chain in this country. Contrary to the strategy drawn up by many chains that have concentrated in large cities, HJ Argentina has been the architect of a hotel and tourism development that does not exist in many medium and small cities in the Argentine territory.

San Pedro and Paraná, to mention just a few, are part of the portfolio of destinations in which Howard Johnson has established himself and that currently add 18 different cities to make this the hotel chain with the most hotels in the country. "Our strength is that we know the Argentine market very well and we understand it", comments Mr. Albamonte. This understanding has made this the most popular brand among corporate travelers in the domestic market.

"In the segment of four-star international hotel chains we have a share of approximately 20% of the market and with a growing trend," adds Alberto. However, he clarifies that even the market share figure is not so important considering the impact that their hotels have generated in the corresponding destinations. "We believe that we are also contributing to the growth of tourism to Argentina in general because when we bring tourists we not only benefit ourselves but also our colleagues," he explains.
{mospagebreak}
When the river sounds

The chain currently has 16 hotels under construction. Among the existing ones, four are located on the banks of the Paraná River and among the new constructions, five are located along this vital artery of the country, a fact that offers another sample of the way the chain has approached the local culture. "El Río is part of argentina," says Daniel Reigl, the chain's operations manager in Argentina. It does not seem free then that part of the new developments are directly connected to this aspect of nature. The best example of this proposal is offered by the project of the new Howard Johnson Tigre that will be inaugurated in December 2009.

"This was an anthological hotel, not only from Tigre but from Argentina," explains Juan Pablo Lafosse, general secretary of Hostelling Internacional Argentina, a hotel accommodation company and who together with the architect Alejandro Hug is in charge of the development of the new project. The historic Tigre Hotel closed its doors in 1940 and Howard Johnson Argentina seeks to bring it back to life. "With 130 rooms we want to return to Tigre that anthological hotel that was so important for the city," says Juan Pablo.

The Tigre River is a tributary of the Paraná River that, together with the Uruguay River and numerous tributaries, make up the Plata Basin of whose route of 3,100,000 km2, 919,000 correspond to Argentina. The city of Tigre that hosts the famous Delta del Tigre is part of the province of Buenos Aires and its charm is based on the lifestyle that the river has generated. Despite this, the city has fewer than 60 places of accommodation and of them only five are of superior category.

The new Howard Johnson Tigre will be the first chain hotel to be established in the city considered the second destination in influx of visitors from the country, after Buenos Aires. With a total investment of US$ 13 million, the new hotel will seek to change the history of this destination that sees visitors arrive in the morning and sees them leave in the evening.

Hotels with personality

As a brand for the middle market, Howard Johnson Argentina offers more than the brand promises in other countries thanks to its successful approach to the needs of the local market. "We have defined the brand as a product that focuses on the mid-price market with a value positioning," says Daniel Del Olmo, international vice president of strategy and marketing at Wyndham Hotel Group. "What makes HJ stand out within Latin America is that it is an international brand but that it adapts to the local market," he explains.

Thanks to their chameleon-like nature, Howard Jonson Argentina hotels each offer their own identity. An example of this is the San Pedro Marinas hotel, a resort-type hotel that even offers an area for camping and accommodation in cabins. Located on the coast of the Paraná River, this hotel offers 16 hectares of park, gardens and wide beaches. It also has a spa, gym, tennis courts, beach volleyball, paddle court and marinas with moorings.

But perhaps the best part of the story is the one that Alberto Albamonte, president of the chain, remembers. "Our hotels have even improved the aesthetic quality of the properties. For example, in San Pedro, as visitors went out with the cameras, the neighbors felt embarrassed for having the garden untidy. What they did was plant rose bushes and paint their houses."
{mospagebreak}
Health, sport and work

By improving the basic services of a mid-market hotel, HJ Argentina's strategy has been successful. Casinos, spas, golf courses and convention centers are part of this proposal that seeks to balance the corporate market with the holiday market. "In each of our hotels we seek to optimize and make the business profitable to have a high occupancy in the week and the weekend," explains Daniel Reigl, director of operations of the chain in Argentina. "In some cases I have to invent an offer to look for demand and that is what has happened in San Pedro," he clarifies.

For the days of the week the hotel already has an important corporate audience that is being attracted by services and activities that complement their interests such as health tourism. "Artificial medicinal waters are being developed to work in a curative way, we are working with programs to stop smoking, anti-stress and weight reduction with medical controls. Different alternatives are being invented to achieve demand," explains Mr. Reigl.

The spa of the San Pedro Marinas has an activity of 6,000 to 7,000 treatments per month. In total, of the 20 existing hotels, 10 have a spa. But this is not the only difference that the brand offers for this market. Convention centers, golf courses and casinos are complementing the offer and currently the chain has seven hotels with casinos and in the future they will have seven more. And although the legislation of the casinos is an issue that prevents sustained growth, the efforts that the chain has made so far to open casinos in its hotels have had an unbeatable response. "So far we have won all the contests and that's why we can have hotels with a casino," he explains.

Unprecedented growth

The rise of golf courses in the hotel market is not alien to the Argentine market, therefore, the chain is already attentive to this demand. "Golf is the sport that in the last five years has grown the most in Argentina," explains Alberto Albamonte, president of the chain for Argentina. Accordingly, it is planned to build the largest golf course in the country in Almafuerte, province of Córdoba, one of the new hotels that is scheduled for the month of September 2009. Another golf course will take place in Ezeiza, very close to the airport, where there will be a hotel with a convention center next to the country club.

But the good news doesn't end there. Months after opening the HJ Mayorazgo, the largest HJ resort in the country and the most recent opening of the chain in Argentina, in the city of Paraná, overlooking the river of the same name, the chain is already advancing an unparalleled project. "We plan to buy the island that is located in front of the hotel to build a golf course," says Alberto. When this is a reality, the chain would already be counting 17 more hotels in its portfolio, for a total of 37 hotels. The projection of its president is more promising: "We want to have a hotel in each city with more than 25,000 inhabitants," he says. "In addition, we want to have a hotel in every tourist point in the country and that gives more than 250 hotels, that is our goal"

In total, the chain has four hotels with a golf course and six more under construction. Currently, 90% of the hotels in the chain are new constructions and "the services provided by the chain in Argentina accompany the entire process from research to construction," explains Mr. Albamonte. From that first stage, the success of the brand is guaranteed, which means an incentive for the future of the sector in a country where 99% of the hotels are independent.

Such success seems guaranteed not only by the constant support that the figure of master franchisor can bring to the development but because in reality it is a brand that has made a correct and very faithful reading of the needs of the local market. Its current and upcoming development confirms this.