NEENAH, Wisconsin —Cobblestone Hotels’ goal was to have 100 properties open by 2018—the company’s 10-year-anniversary. With its recent acquisition of Centerstone Hotels and Key West Inns, Hotels & Resorts, the company has surpassed that number, which comes as a good surprise somewhat for Cobblestone President, CEO and founder Brian Wogernese.
Wogernese said the acquisition, announced on 6 August, wasn’t exactly on his radar, and is an exciting move for the company.
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Brian Wogernese, |
Prior to the deal, Cobblestone had 88 properties open and eight under development. The acquisition will bring the hotel’s portfolio to five brands and more than 120 properties across 25 states. The five brands are Cobblestone Inn & Suites, Cobblestone Hotel & Suites, Boarders Inn & Suites and the newly added Centerstone and Key West. No price for the acquisition has been made public, Wogernese said.
How the deal came about
Vimana Franchise Systems, which owned the Centerstone and Key West brands, reached out to Cobblestone to propose the deal, Wogernese said.
“I think (they) were just looking at stepping back a bit,” he said. “They reached out; fortunately for us, we had enough cash on hand, so we didn’t have to finance anything. It was a good buy for us.”
He said he’s most excited this will give Cobblestone access to markets it hasn’t been present in before, such as in the South.
Since Cobblestone is franchise-focused, Wogernese said he visited with many franchisees to learn what they like and what they don’t as far as the direction of the brand following the acquisition. A town hall with franchisees is planned for September.
As of now, he said, the decision is to keep Centerstone and Key West as they are.
“At this point, the Centerstone (people) are happy, the Key West people are happy,” he said. “They just want to see the brand grow.”
Expanding the two brands will primarily consist of adding conversions, he said, but new-build properties aren’t completely off the table. Since the deal is so new, things are still in consideration, he said.
Maintaining brands, new opportunities
Though these two new brands are shining at the moment, Wogernese said Boarders—which is Cobblestone’s conversion brand—will not be put on pause.
A couple of Boarders properties are expected to break ground soon, he said.
“We’ll still add to that brand; we have several in the pipeline right now. I think last year we added three, and we’re probably on track for three to four this year,” he said. “We’ll keep doing our thing there, and (we’ll define) between Centerstone and Boarders what we’re doing with those two.”
He added that Centerstone has some high-end properties that might exceed Boarder’s specs. He said he doesn’t want to bring economy or upper-economy properties into the Boarders brand, but he anticipates the Key West brand will open opportunities in the economy and upper economy segments.
“Key West will fill that need for us,” he said. “They’ve been around for 30 years. It’s an older brand, but they originally started kind of the same concept we have of going in smaller communities. So it has this great history to it; it kind of lines up to where we’re at.”
With the Boarders and Centerstone brands, there is some overlap in the midscale segment, while Key West will be primarily upper economy, with some exceptions, “like our Key West Resort locations,” he said.
Josie Kilgore, Cobblestone’s brand president, will oversee the brands.
On 9 August, Cobblestone announced Patrick Mullinix as president of franchise development, according to a news release. Prior to this role, he was group president of Vantage Hospitality Group’s Value Brands, where he helped develop the Americas Best Value Inn and Country Hearth Inn & Suites brands. He was also a key player in launching Signature Inn.
Owner/operator types
Wogernese said he will continue to look for the same types of owner/operators that he’s always seen opportunity in, which are the one-by-one buyers, though he’s not opposed to multi-unit owners.
“Typically we’re not able to tap into those big, multi-unit developers,” he said. “We’re happy to go one by one and kind of do it the old-fashioned way.”
He said he’s currently selling a property in Wisconsin to an owner who is doing just that. He said it’s likely the owner will run this property for a couple of years, sell it to someone else, make some money and move on to another.
Future plans
If all goes well with this acquisition, Wogernese said Cobblestone will consider more.
In fact, he said the company is working on an acquisition at the moment, but this one has been on Cobblestone’s radar for a long time.
“I obviously won’t disclose the name, but I think we should be able to close near the end of the year here, which will add another 20-some hotels (for) us,” he said.
Beyond that, he said, “we’re excited where we’re at; we’re just trying to get our feet on the ground from this acquisition.”