PHOENIX—The franchising efforts for WoodSpring Hotels are falling into place, as the company picks up momentum following a name change in 2015, executives said.
The Wichita, Kansas-based company is on track to open twice as many franchised WoodSpring Suites-branded properties (14) than corporate-owned hotels (7) in 2017, and has plans to increase that to a 3-to-1 ratio in the next few years.
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With 235 hotels open—133 franchised and 102 corporate-owned—the extended-stay hotel company that was founded by industry icon Jack DeBoer in 2003 as Value Place has an aggressive growth plan, according to Ron Burgett, EVP of franchise development and operations.
The company plans to open an additional 45 hotels (35 franchised, 10 corporate owned and operated) in 2018, has executed 23 deals year-to-date and has more than 25 deals in the sales pipeline across the U.S.—the most robust growth year for the brand in its history.
“We’re going to grow faster in franchising,” Burgett said during a break at the recent Lodging Conference. “That 35-to-10 (ratio) is about where we’ll be over the next few years.”
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Ron Burgett, |
To accomplish that goal, the company is “dabbling” in the suburban areas of bigger markets such as Miami, Boston and New York, Burgett said. He cited a WoodSpring Suites property that opened this year in Cherry Hill, New Jersey (outside of New York City), as an example of the proximity to major markets that the company would like to attain.
“We’re not going urban, although we have a few that are close to urban markets,” Burgett said, pointing to the soon-to-open property in Redmond, Washington. “We’re still focused on secondary markets … not First and Main streets, but mid-block.”
New identity
The company changed its name to WoodSpring Suites from Value Place two years ago. It plans to eventually phase out the Value Place name entirely. There are approximately 25 Value Place properties remaining, Burgett said, and the company is not awarding any new Value Place agreements.
Burgett said the name change has “allowed us to go into markets we previously hadn’t been able to.”
Wendy Hoekwater, chief marketing officer, said the name change has paid off. The WoodSpring Suites name is welcomed in communities, and customers like it, she said. Prior to the name change, the company had faced some uphill battles because of how some people perceive the word “value.”
“We’re seeing growth in occupancy and ADR,” she said.
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Wendy Hoekwater, |
“When we made this change, we knew what we were getting into,” Burgett said. “We wanted to go into bigger markets so we would have less resistance, and we wanted to increase our rate. Both of those things happened.”
WoodSpring Suites has experienced a rate increase of nearly 20% since the name change, he said.
“We’re still in the value segment—we know where our niche is,” Burgett said. “We’re for long-term stays and don’t have maid carts going down the hallways. … We want people to stay long-term—30 days is optimal.”
The company has been successful in partnering with developers who agree to build multiple WoodSpring Suites projects, Burgett said. For example, one franchisee has contracted for 15 WoodSpring Suites properties in Washington state and has signed a master agreement for the San Francisco MSA; Holiday Group has exclusive rights to Chicago; and another developer has locked up the South Florida region.
“You can see us getting into these markets that are a little more populated, but we have the same guest coming in,” Burgett said. “The guests understood us (as Value Place)—people staying at our hotels didn’t have a problem with the name. We were running 84% occupancy. We did it so we could get into bigger markets.”
Construction workers, trainers and traveling nurses are among the core demographics that utilize the product, the executives said.
WoodSpring Suites is attracting some nightly business—approximately 10% of its total occupancy is transient daily business—but its bread and butter remains monthly stays (30%) and 14-day stays (30%), Burgett said.
The brand has added some color elements to the prototype and remodeled its lobby in its continued effort to move away from the Value Place offering.
The WoodSpring Suites Tampa (Northeast) is one of 14 franchised properties the brand opened in 2017. (Photo: WoodSpring Hotels)
Hoekwater said the design of the buildings is the biggest indicator of what the brand offers.
“It speaks to the positioning of ‘keep it simple with the option to add more,’” she said.
All of this points to the company forging ahead to make a bigger footprint in the extended-stay arena with its 122-room prototype, the executives said.
“It is a niche product … you’re not going to put it everywhere,” Burgett said. “Once you get to 300, I think it’s critical mass.”
Hoekwater said the brand is represented in key extended-stay markets such as Dallas and Houston. Atlanta is a growth opportunity.
“Our biggest focus is getting the word out,” she said. “We rebranded and repositioned. Brand awareness is really key for us.”
The company earlier this year launched a new website (www.woodspring.com) and a model app with a link to book direct, Hoekwater added.
Woodspring has deals to open franchised hotels this year in cities that include northeast Tampa and Daytona, Florida.
Hoekwater said WoodSpring’s marketing message has remained constant: It’s for people looking for a clean, affordable and secure environment—a place they can hang their hats and make it feel like home. WoodSpring also recently refined its marketing efforts to focus on suites, kitchens and excellent Wi-Fi connectivity.