First-Rate Hotels in Second-Tier Cities

Traveling to Minneapolis, Cleveland, or Turin, Italy? No worries, travel snobs, the accommodations here are just as good as Paris or London

by Christina Valhouli

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Some business trips are better than others. Those three days in Paris, London, Los Angeles, or Shanghai may result in heavy jet lag, but the hotels, restaurants, and service usually more than make up for it. Heading to Bangalore or Cleveland is a different story. No offense to either of these cities but they ain't Paris.

However, before the angry letters start pouring in from civic-minded Indians or Ohioans who feel their cities are being given short shrift, it is worth pointing out that incredible hotels can be found in the most unexpected places. And they don't charge Paris prices.

John Mahony is chief executive of London's ReputationInc, a consultancy that focuses on reputation management (tracking how clients are viewed by a target audience). When he found out he had to travel to Louisville, Ky., last year, he admits his expectations were low. "All I knew about the hotel was that my PA [personal assistant] had booked it," says Mahony. "When I got there, I was met by a bearded man in a checked shirt after I walked over a video installation of a couple getting it on." So what kind of hotel did Mahony's assistant find for him? None other than the ultra-cool 21c Museum Hotel, which is connected to a modern art gallery. Mahony says when he walked into his room, music flowed from the chandelier, and (stay with me here) the hotel had about 40 huge, red, plastic penguins that were placed around the premises.

Funky Bargains

"Basically what they did is deposit a hotel in the middle of a living, breathing art gallery," says Mahony. "You close the door and there is no escaping the art. The entire hotel experience just left me speechless because it combined style and substance with Southern hospitality." Needless to say, Mahony's PA earned top marks and next time he travels to Louisville, he'll be staying at the 21c.

If business travelers like their business hotels with a healthy dose of style (and perhaps minus a handful of penguins), there are plenty of options, ranging from the Chambers in Minneapolis to the Four Seasons in East Palo Alto, Calif., or the Fasano Hotel in São Paolo, Brazil. The good news for the accounting department is, these funky hotels tend to cost less than you'd expect.

"In many of these secondary business cities, the land is cheaper, the labor doesn't tend to be unionized and as a result, the rack rates are lower," says Bjorn Hanson, a hospitality consultant for PricewaterhouseCoopers. "Guests are left feeling that they are getting good value."

Second Cities Work Harder

And value counts a lot, considering the average cost of a business trip. According to the Alexandria (Va.) National Business Travel Assn., well over $200 billion is spent on domestic business travel each year. The NBTA puts the average cost of a three-day domestic business trip at $1,000 to $1,100, while the equivalent international business trip originating in the U.S is $3,000 to $3,100.

In addition to delivering better value, business hotels in secondary locations tend to work harder to make themselves stand out, mainly because they have to. "Hotels in these cities need to differentiate themselves in a way that people actually care about and are willing to pay for," says Sean Hennessey, the founder of New York's Lodging Investment Advisers. "Most business travelers are perfectly happy to stay in a Courtyard Inn by Marriott, and will only pay a bit more for some style and design." In some cases, the hotels which do deliver style also act as a catalyst for it, such as with the Chambers in Minneapolis. "Minneapolis does have an artsy scene, but the Chambers is almost an incubator for art, and supports it and adds an additional buzz to the city," says Hennessey.

And those travelers who would still rather be strolling through the Louvre than through Minneapolis's art galleries while on a business trip might soon be out of luck. According to Orbitz for Business, the top 10 destinations for international business travel are (in order) San Juan, London, Cancun, Toronto, Mexico City, Paris, San Jose del Cabo, Vancouver, Puerto Vallarta, and Frankfurt. But as corporations continue to scout cheaper operating locations, they are forced to seek more off-the-beaten-path destinations where labor and running costs are cheaper—such as Salt Lake City, Guangzhou, or Shenzhen (Marriott's (MAR) Ritz-Carlton will be opening hotels in both Chinese cities later this year).

So what does this all mean for the business traveler? Enjoy that conference in sunny Cabo while you can, because it may soon be swapped for Guangzhou.

Click here to see our round-up of incredible hotels in unlikely places.