For some hotels, localism a matter of simple economics


Hyatt Regency MinneapolisMike Suomi is willing to match his tree-hugging credentials against anyone's, but even he would admit that his environmentally friendlier approach to renovating the Hyatt Regency Minneapolis was borne out of economics and timing.

Looking to capitalize on the travel-spending rebound as quickly as possible, the hotel's co-owners, Hyatt and Barry Sternlicht's Starwood Capital Group, gave Suomi and his New York-based architecture firm, Stonehill & Taylor, just 12 months to complete the renovation of the 533-room property.

That time frame immediately erased the option of procuring furnishings and fixtures from China and other parts of the world where labor is cheaper, so Stonehill & Taylor turned to companies such as Minnesota's Cold Spring Granite and Red Wing Stoneware and to Quebec's Granicor for many of the materials used in the $25 million renovation.

In all, about 80% of the hotel's furniture, fixtures and equipment was produced in the U.S. and Canada, and the renovation was completed in January.

Local Pickup"This incredibly tight schedule precluded the normal approach," Suomi said. "It's not like you can ship things by boat to Minneapolis."

But time factors are just one of myriad factors driving today's hotel developers to do their shopping closer to home.

From guestroom furniture to bathroom fixtures to wall and floor coverings and even to the hotel restaurant's main courses, the effort by hotel operators to source more of their goods domestically, and in some cases locally, appears to be on the rise.

Some independent boutique hoteliers in cities such as San Francisco and New York have long pushed for interior design components created by local artists or for their restaurants to feature locally grown foods. Now, the trend appears to be broadening to smaller travel markets and even to chain hotels.

Some of this effort has been spurred by hospitality industry players with an eye on the environment and concern over the natural resources required to ship products from across the country or around the globe. But while those environmental benefits are very real and carry wide appeal, the real motivator for pushing this trend further into the mainstream is simple economics.

Hyatt Regency MinneapolisRising fuel prices and increasing wages in source countries such as China are boosting the price of shipping furniture from overseas. At the same time, cuisine-focused media outlets like the Food Network and cooking-oriented syndicated programs like Rachael Ray's talk show have left travelers more informed about, and appreciative of, both regional U.S. cuisines and the culinary benefits of fresh local produce.

Additionally, hotel owners are pushing for the fastest possible renovations, knowing that reducing the time they have to close rooms or entire hotels for construction enables them to take advantage of the tourism upswing. As a result, they are forcing many contractors to look harder for local suppliers.

"We're at a tipping point," said Rob Gatzke, principal at Los Angeles-based architecture and design giant Gensler. "All the goodwill in the world can only do so much. Everyone's in a business, so until it becomes financially feasible, it's not going to take. But it's only a matter of years where we're going to see more product sourced locally."

Granted, said Cliff Tuttle, San Francisco-based vice president at interior design firm Forrest Perkins, sourcing for locally produced furniture, wall coverings and other interior components has generally been easier for hotels in larger metro areas.

Radisson Plaza Hotel MinneapolisTuttle pointed to his firm's recent lobby renovation at Los Angeles' Ritz-Carlton, Marina del Rey and upgrades to the Palmer House in Chicago as recent examples of projects for which most components were sourced nearby. For the latter property, Forrest Perkins tapped furniture builder CG America, based in the Chicago suburb of Oak Park, Ill. That decision shaved a month off of the typical 12- to 14-week delivery time for furniture made overseas.

But Tuttle said that more resources have also become available in smaller cities, as long as an interior designer is willing to seek them out. A case in point is his firm's 2005 work on the Nines hotel in Portland, Ore., and more recent upgrades to the Portland Marriott Downtown Waterfront.

"Unfortunately, there wasn't a lot of available [local] resources for interiors to look at other than paint and concrete," Tuttle said of the Nines. With the Marriott, though, the firm was able to source items such as tabletops locally and hired Paul Vexler, an artist based in Washington state, to build a wood sculpture for the main lobby that references the nearby Hawthorne Bridge.

"We've made great strides," Tuttle said.

To some, the move by interior designers to go more local represents a full-circle development that dates to the days when U.S.-made furniture was the rule rather than the exception.

"We don't have the infrastructure to produce the iPhone in this country," said Gensler's Gatzke, whose company gets about 10% of its business through the hospitality industry. "But our infrastructure for textiles and case goods [has] existed for a really long time in the southern and southeastern part of the U.S., and those factories are still there."

Local flavor

On the culinary side of things, the effort for hotel restaurants to source as much product as possible locally has been ongoing for at least a couple of decades in natural-resource-rich culinary centers such as the San Francisco Bay Area and Seattle.

In recent years, that trend has moved inland and to other parts of the U.S., and localism efforts for food products are under way in a number of guises.

Last year, New York's Waldorf Astoria began harvesting honey for its massive food and beverage operation by way of a half-dozen hives set up on its midtown Manhattan rooftop.

Rooftop Gardens KimptonMeanwhile, Santa Barbara, Calif.'s El Encanto, the near-century-old property that Orient-Express is upgrading and reopening in March, will not only serve its own locally brewed beer but will also feature El Encanto-branded cheese produced by its own dedicated cow on a nearby farm.

Kimpton Hotels & Restaurants, an early practitioner of local food sourcing for its food and beverage programs, has moved its local food-sourcing emphasis beyond the company's San Francisco area roots. In the Washington area, where Kimpton has eight hotels, its chefs collaborate on sourcing locally for products such as meat from Virginia farms and oysters from the Chesapeake Bay.

John Inserra, Kimpton's executive vice president of restaurant operations, said the collaboration has given the chefs more purchasing power and food of more consistent quality.

Additionally, a farm about 45 miles outside of Denver has for the better part of a decade set aside cattle portions and other livestock specifically for Panzano, the Italian restaurant inside Kimpton's Hotel Monaco.

The trend isn't limited to boutique hotel companies doing most of their business on the coasts.

Carlson Rezidor Group's Radisson brand is pushing its restaurants to provide more local flavor, represented by dishes such as walleye at the Radisson Plaza Hotel Minneapolis' FireLake Grill House or wild salmon at the Radisson Hotel Seattle Airport's RBG Bar & Grill.

Radisson Hotel Seattle Airport"Everybody knows the vegetables don't grow in Minnesota in winter, so, obviously, you have to compromise a bit," said Christer Larsson, vice president of food and beverage at Carlson Rezidor. "But when you go out to Seattle and find that you can buy wild salmon for $10 a pound, why not have that on the menu?"

Kimpton has taken localism a step further in the past five years or so by working with its chefs to build rooftop gardens atop many of its urban properties. About a third of its nearly 60 hotels, including properties in Boston, Washington, Chicago, Denver and San Diego, have on-site gardens that supply vegetables for dinner plates as well as herbs for cocktails.

And while forward-thinking hotels have long upped the local vibe by stocking their bars with local microbrews, that trend is moving into the gift shop, as well. For example, the Hyatt Regency Minneapolis' on-site market highlights Minnesota-made food and beverage products ranging from St. Croix chocolates to Caves of Faribault cheeses to Minneapolis' own Joia Natural sodas.

"It has nothing to do with differentiation," said Kimpton's Inserra. "It's really about doing what's right."

Taking the lead

Doing what's right is what spurred Suomi and other hotel and design industry leaders to conduct the first-ever Futuregreen Hospitality Forum in New York last June. The group, whose leadership also includes Gatzke and Forrest Perkins' Stephen Perkins, counts executives with Wyndham Worldwide and Affinia Hotels among its delegates. The group, which specifically stressed the environmental benefits of sourcing hotels' interior design components within a 500-mile radius of the property, meets again this May.

Crosby Street HotelWith both fuel prices and hotel construction on the rise, green advocates will have a growing opportunity to further their cause. While prices for shipping fuel, or bunker fuel, have fallen about 10% in the past year, they've still about doubled since early 2009. Combine that with rising wages in China, and buying furniture from overseas has become all the more expensive.

Clearly, there will be more rooms to furnish. While U.S. hotel-room supply was virtually unchanged in 2011 and edged up about a half percent last year, it's expected to increase about 1% this year and 1.5% in 2014 as financiers respond to rising occupancy and room rates, according to Smith Travel Research.

Overall construction rates will rise even faster on a combination of more aggressive reflagging efforts by the largest hotel brands and owners looking to catch up on refurbishments after deferring maintenance and upgrades to conserve cash during the economic downturn.

While total nonresidential construction is expected to rise 5% this year and 7.2% in 2014, the American Institute of Architects estimates that hotel construction, which totaled about $10 billion last year, will jump 16% and 13% for 2013 and 2014, respectively. That translates into what could be about $25 billion worth of hotel build-outs over the next two years.

Rooftop Garden Hotel Palomar SFThe potential impact on local food and beverage purchases is also substantial. Food and beverage sales account for about 27% of the approximately $120 billion in annual U.S. hotel revenue, according to PKF Hospitality. So with food and beverage product costs typically at about 30% of sales, hotel operators should be purchasing about $10 billion worth of product a year.

Such an environmental push is in its early stages. While such notable hotels as Las Vegas' Venetian Resort, Los Angeles' JW Marriott/Ritz-Carlton complex and the InterContinental San Francisco have met the U.S. Green Building Council's Leadership in Energy & Environmental Design (LEED) certification standards, fewer than 200 of the country's more than 50,000 hotels are LEED-certified, so green-oriented hotel owners are definitely in the minority.

And getting hotel owners newly recovered from a recession to even consider spending more than they need to for the sake of the environment or local business support is a near-impossible battle to win. The bottom line is that designers need to ensure that such practices pencil out.

Still, with rising oil prices, a greater respect for local cuisine and a more concerted effort by industry leaders, Suomi is convinced that the investment in going local will pay off in the form of guest experience, not to mention environmental protection.

"You don't want to be in a room that's made out of petroleum that's constructed on the opposite side of the planet," Suomi said. "We need to take a look at how a group of passionate leaders in the hospitality industry can take a few minor steps now that could have a major impact five years from now."

Follow Danny King on Twitter @dktravelweekly.


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