The strong development momentum of the extended-stay section over the past a number of years was strengthened by a variety of resort executives through the Prolonged Keep Lodging Affiliation (ESLA) Improvement & Operations Workshop Sequence.

Model executives and proprietor/operators alike shared some key methods and finest practices inside the section as they attended ESLA’s inaugural occasion final month in Atlanta, Georgia. In a session entitled “Model Choice, Chain Scale, and Working Methods,” panelists offered their perspective on the section’s latest recognition in addition to the model choice course of.

David Wilner, SVP, franchise growth, Wyndham Motels & Resorts, framed the dialog.

“The explanation there may be this workshop now and all these different extended-stay targeted conversations is as a result of individuals on the market have heard you’ll be able to hit these 45 %, 55 %, or 65 % GOP margins. Who on this business doesn’t wish to hit 65 % GOP margins? However we’re actually speaking in regards to the [upper-economy or mid-market] section inside prolonged keep; not all prolonged keep goes to hit that,” he mentioned.

Wilner additional emphasised the significance of sustaining the “sanctity of the mannequin.”

He added, “After I’m speaking to a developer, I actually wish to know why they’re growing and why they wish to get into this extended-stay mannequin, in addition to if they’re dedicated to the section. The self-discipline of the administration firm who’s working these is massively necessary, however equally as necessary is the model’s dedication to staying true to that mannequin.”

Robert Scribner, regional VP, franchise growth, Alternative Motels Worldwide, elaborated on location specifics.

“I believe it’s a must to actually dive into the market. What sort of extended-stay demand is inside that market? Is it the next price? Is it a real extended-stay, lengthy size of keep, or is it a model that calls themselves prolonged keep and possibly has a median size of keep of three to 4 nights? So, you’ve actually obtained to drill down to what’s delivering that extended-stay demand and why are these resorts profitable as prolonged keep,” he mentioned.

Frank McFadden, director, franchise growth, southeast area, Hilton Worldwide—who famous he has a “feasibility background”—strengthened the purpose.

“My first query for a developer is at all times, the place’s your demand coming from? It’s good to perceive the demand patterns and what’s the value sensitivity,” he famous.

Ron Stewart, regional VP, growth, Marriott Worldwide, elaborated on the purpose.

“Each market goes to be slightly bit completely different, and we actually are going to be directing individuals to what we really feel is the correct model in our ecosystem. I believe you actually need to do your homework on the information; you have a look at the demand technology and you actually land on a conclusion of what’s going to the optimum model,” he mentioned.

Jason Ballard, head of operations, Hyatt Studios, in the meantime, emphasised the significance of loyalty applications and having room to develop in a market.

“Having a loyalty base is extraordinarily necessary in setting that basis for fulfillment and ramping up efficiently. What you wish to do is decide a model that has both a superb, robust loyalty base in that market or no presence in any respect,” he mentioned, declaring the worth of having the ability to inform house owners, “You might be the one Hyatt resort inside 30 miles.”

Scribner additional added, “I believe that with regards to the decrease segments the loyalty applications aren’t as necessary and so they can grow to be a value heart. I believe that additionally has to enter investigating these particular person markets and determining which is the perfect model for the market. When you have a bunch of upscale extended-stay resorts which can be in a market and are doing nice, that doesn’t essentially imply an financial system extended-stay resort goes to do nice and vice versa,” he famous.

The Challenges

The panelists additionally addressed among the potential pitfalls and downsides to the extended-stay section whereas underscoring the necessity for training.

“Some municipalities frankly received’t permit an financial system extended-stay resort, in order that’s one thing that the developer must sort of dive into whereas they’re selecting their model. Will town permit stovetops? Will town permit the smaller room sizes or smaller foyer sizes? Particularly within the Atlanta metro, we see all these loopy codes thrown in several counties and cities to attempt to stop the area. That’s a giant one which [developers] actually need to concentrate on going into it early,” mentioned Scribner.

“I believe that’s a bonus of being a neighborhood developer since you are inclined to know your market slightly bit higher,” mentioned Ballard. “In the event you’ve constructed there earlier than, you could have relationships with the council already. I’ve personally gone to a few board council conferences to clarify prolonged keep and what it’s. I’ve defined why we’re not going to be having a number of police calls and what sort of friends now we have, what our common price will probably be. I’ve reached out and mentioned, ‘Please councilman come go to our mannequin room or come see one in all our resorts, so that you see the expertise.’ It takes going that far … I believe we have to flip the script as an business to make that story higher for all of us.”

Recommendation for Operators

In the meantime, a panel targeted on “Operational Effectivity” generated some recommendation from main proprietor/operators within the section.

Arturo Jimenez, VP, onboarding and coaching, Ark Hospitality, touted the method for fulfillment inside the section.

“The financial system extended-stay mannequin works; it makes some huge cash. You’ve obtained to discover a companion and operator that may take that concept and imaginative and prescient that you’ve and simply carry it to the subsequent degree as a result of there’s some huge cash to be made there,” he mentioned.

Doug Artusio, chairman, ESLA—who can also be CEO of Dellisart Hospitality—offered the ultimate phrase.

“Know who you might be as a property, know your capabilities, and know your clients so that you might be reasonable on what your plan is. Don’t settle for that the previous is the perfect you are able to do. I believe it’s worthwhile to at all times attempt for enchancment from the underside up on your small business mannequin. We enhance yearly, we strive our hardest, and if we fail, we fail collectively, however typically, we’re at all times making progress. Simply take pleasure in it [the extended-stay segment] as a result of it’s the perfect side of this entire hospitality enterprise,” he concluded.