PARSIPPANY, New Jersey—When Wyndham Hotel Group in 2008 acquired the Hawthorn Suites brand, the company saw the potential to make a play in the extended-stay segment, said William Hall, the brand’s senior VP.
Even though Wyndham did its due diligence with the acquisition of US Franchise Systems, which included both the Microtel Inn & Suites and Hawthorn Suites brands, the Hawthorn brand got off to a rocky start, Hall admitted.
“(We) thought there were some portfolio (conversion) opportunities that would be available in the near term,” he said. “Turns out they’re still available, but they’re taking a little bit longer to come to term. … Opportunities weren’t coming as quickly as we hoped, but we also lost the inventory a little because we were making the brand stand for something.”
Hawthorne executives also are looking inward at cleaning up the current portfolio, too. Prior to establishing that Hawthorn Suites would be a true extended-stay brand, Hawthorn’s brand portfolio was a little “schizophrenic” in that it had some extended-stay limited properties and extended-stay golf resorts, Hall said.
“As we really started to make the Hawthorn Suites brand relevant today, there were a group of properties in the portfolio that weren’t really extended-stay properties,” he said.
After aligning the brand’s reservation systems to account for tiered rates and repositioning some properties that didn’t fit, performance began to improve and people started to notice, Hall said.
According to the Wyndham’s fourth-quarter earnings release, Hawthorn Suites by Wyndham comprised 91 properties totaling 8,933 rooms at year end, compared to the prior year’s 94 properties with 9,317 rooms.
Despite losing three properties year over year, the brand improved in the three key performance metrics. For the three months ending 31 December, the brand’s average occupancy increased 2.6% to 59.2%; average daily rate increased 0.8% to $69.39; and average revenue per available room increased 3.4% to $41.10.
“We attached the Wyndham name with the ‘by Wyndham.’ As performance started to improve, we started to attract conversions,” he said. “We still started to get a lot of attention despite those other portfolios taking longer.
“As word started to get out throughout the franchise community, our development organization started to get requests for new construction,” Hall said, declining to discuss details on the brand’s pipeline.
In response to the increased interest, he said he thought it was time for a new prototype.
Late last year, Wyndham unveiled a new hotel prototype intended to enhance the overall guest experience while reducing development costs for franchisees by approximately 46% when compared to the brand’s previous prototype, Hall said.
Hawthorn’s former design, which had been the brand’s original, had a big footprint, lots of wasted space and wasn’t what travelers are looking for today, Hall said. The new prototype’s footprint is smaller and has an increased emphasis on social space.
Hall said owners of the existing extended-stay properties were excited to be part of a “brand that stood for something.”
“Because there are renovation cycles, as they are renovating now, we’ve been able to provide them guidance on how to get as close to what the new prototype buildings are,” he said.
So far, owners and developers have responded well to the new prototype, Hall said.
Growth by conversions
In May 2012, Wyndham signed an agreement with Hospitality Properties Trust to brand 20 hotels with the Wyndham Hotels and Resorts and Hawthorn Suites by Wyndham brand names. Of those hotels, 16 were rebranded as Hawthorn Suites by Wyndham.
Part of the rebranding process included renovations to the 16-hotel portfolio so that they could resemble the brand’s new prototype, Hall said.
“They all just came out of renovation. We had to go through a pretty big renovation in the spirit of the new prototype,” Hall said. “We’re starting to see those results now. As they’ve come out of the renovations, the value proposition is what Hawthorn stands for.”
Hall added that conversion opportunities continue to present themselves, especially as potential deals that were held up during the purchase of the brand start to move along.