Choice sees room to grow extended stay across segments
 
Choice sees room to grow extended stay across segments
14 MAY 2019 7:35 AM

Choice Hotels International executives say they want to grow the company’s extended-stay offerings across multiple segments and different markets.

LAS VEGAS—Choice Hotels International has seen great success with WoodSpring Suites since acquiring the brand in 2018, and company executives believe there’s opportunity to build on that success by growing its extended-stay brands across multiple segments.

During a media roundtable at Choice’s recent business convention, Ralph Thiergart, VP and general manager of extended-stay brands at Choice, said demand is growing fast in the economy extended-stay segment, which plays out well for the WoodSpring and Suburban Extended Stay Hotel brands, which make up 40% of the supply in the category.

This rapid demand growth is starting to be seen in midscale extended-stay, he said, which creates an opportunity for Mainstay Suites owners to compete against the existing product that’s 15 to 20 years old in that segment.

Upscale extended stay
While economy and midscale extended stay are Choice’s bread and butter, Thiergart said the company would not be opposed to looking into upscale extended-stay opportunities.

“Choice is a disciplined evaluator of opportunities, and we’ve proven the ability to take action when there’s an opportunity that makes sense for us,” he said. “I think common sense would say that if we have made the kind of investment we have made in extended stay … taking a look at an opportunity in upscale would be totally logical.”

He said the upscale extended-stay segment also makes sense for Choice as the company thinks about the stay occasion for guests.

Guests might choose midscale or economy extended-stay for a one-stay occasion, “but for another stay occasion, you might choose upscale,” he said. “The need to have an accommodation for a lengthier stay is often driven by what that stay occasion is. If we were to have the opportunity to play in all three of the categories, (upscale) could make sense,” he said.

International growth
Choice has also seen interest from franchisees in growing extended-stay offerings in international markets such as Canada.

Ron Burgett, VP of franchise development for extended-stay brands,* said Choice has the rights to sell Mainstay and Suburban in Canada, and just received the selling rights for WoodSpring there.

Thiergart added that Europe is another region where extended-stay options would make sense as many European travelers want the sense of feeling self-sufficient when staying in a hotel for a lengthier stay.

Modular construction
WoodSpring currently has a strategy for installing furniture, fixtures and equipment via modular construction, which can be completed in about 12 days, Thiergart said.

While partial modular construction is currently used for WoodSpring’s FF&E, executives said they have developers who are interested in building completely through modular construction.

The benefit of modular construction is completing a hotel project on a faster timeline, Thiergart said, which should not be confused with completing a project at a lesser cost. Bringing the project to life faster could mean beginning to generate revenue from that hotel quicker, he said, but modular construction often does not cost less than more traditional construction methods.

Burgett said there’s a need to bring extended-stay hotels online faster and in markets, such as Seattle, where there aren’t a lot of options.

“(There are) more people trying to stay at purpose-built hotels than there are rooms,” he said.

Editor’s note: Choice Hotels International paid for meals and accommodations at the Mandalay Bay Resort and Casino, where the conference is held. Complete editorial control was at the discretion of the Hotel News Now editorial team; Choice had no influence on the coverage provided.

*Correction, 14 May 2019: This story has been updated to correct Ron Burgett's role at Choice Hotels International.

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