LAS VEGAS—Officials with Choice Hotels International see untapped potential in the company’s two extended-stay brands, leading them to introduce a new MainStay Suites prototype and encourage owners to improve guest experiences at Suburban Extended Stay Hotel properties during the company’s annual conference.
MainStay Suites grew to 56 hotels in 2016 with 10% in the system new properties, said Caragh McLaughlin, head of brand strategy at MainStay Suites. Systemwide revenue per available room is down about 2% to $46.83, she said, but that’s expected with so many new properties in the mix and tough times in oil and gas markets.
When looking only at mature MainStay properties, RevPAR is at $49.95, which is flat compared to the year before, and the brand is capturing fair market share, McLaughlin said. While average daily rate is down slightly to $76.24, occupancy is up to 65.5%. The “likelihood to recommend” rating across the brand for new and mature MainStays stayed flat at 8.4, she said.
In 2017, the new hotels have had a chance to ramp up, McLaughlin said.
“Overall, RevPAR is growing in the first quarter,” she said. “That’s what we expect to see continue until the next influx of new hotels.”
Suburban saw RevPAR growth that outpaced the extended-stay economy segment and the economy segment in general in 2016, McLaughlin said, growing 4.6% to $34.76, which was a result of ADR growing 4.6% to $50.39 and occupancy maintaining at 69%.
The brand actually took more than its fair share against competitors, she said, growing its share 111 basis points to 108.9 on the 100-point index.
While that’s great news for the brand, McLaughlin said she is concerned that its likelihood to recommend score dropped 24 basis points to 6.95.
The new prototype
Choice’s new prototype for MainStay Suites includes updates to the breakfast room, the roofline, MainStay Marketplace and the guest suites, along with home design updates throughout. The breakfast room offers the traditional continental breakfast with high-top communal tables that allow guests to recharge.
“We updated the covered entrance,” said Brian Quinn, VP of franchise development, as attendees viewed images of the prototype. “It’s a bit of a front-porch experience. It feels more residential, right? There’s a new front-desk design. Check out the wood wall treatment. That’s something you can easily adopt.”
The marketplace will have a fridge for beer and wine where the properties can sell it, he said. The coffee station is easily accessible in the public space, along with the “Eat Like Home” fruit bowl.
The community space has been modernized into an open concept design, McLaughlin said. Guests can use it to socialize, eat and lounge or work surrounded by other people.
“My favorite part of the new prototype is this beautiful patio, which is really an extension of the community space inside the hotel,” she said.
The new guest suites have an updated look for the kitchen along with new bedding and design packages, she said.
The first of these new hotels are already being built, McLaughlin said. Choice is committed to helping newly built hotels ramp up more quickly to a stable rate and occupancy.
The new design isn’t just for future properties, Quinn said, as there are elements that can be retrofitted into existing hotels.
“And let me say right away, we are not making anyone add these elements at this point,” he said. “You’ll be able to choose elements you want to include now, if you want to.”
Sanding over rough spots
McLaughlin said guest satisfaction scores show guests reported multiple problems, such as room and bathroom cleanliness, overall conditions of rooms as well as safety and security.
“Suburban provides comfortable, affordable, safe homes away from home for a special class of guest, and according to your own guests, we’re not delivering the basics of comfort and safety,” she said. “Guys, this is not a good situation to be in.”
It’s going to take a leap in the basis of hotel operations and management to turn things around, McLaughlin said.
Choice is updating its room condition program to align with current brand standards, she said. The program provides tailored resources and job aides based on staff members’ roles in the hotel, and it’s more available now because it’s coming through the company’s streaming educational program, ChoiceU, rather than through DVD.
The company also terminated six hotels with an average likelihood to recommend score of 5.28, McLaughlin said.
Guests’ expectations are rising, so it’s time to step things up to meet them, even in the economy segment, McLaughlin said. All economy hotels are getting better because they have to, she added.
While Choice isn’t going to make franchisors renovate now, she said, they need to keep up with the competition. Competitors to Suburban have made signification investments in renovations over the years, such as Extended Stay America’s portfoliowide renovation project.
“We have a product that matches the competition,” McLaughlin said. “Our newer Suburbans are built with the spiffed up, modern prototype we launched just four years ago. They’re looking great, but some of the rest of the family needs to make some public changes to become more modern and inviting.”
Since launching the Suburban prototype three years ago, Choice implemented a new bedding program and switched to flat-screen TVs, McLaughlin said.
“We’ve deliberately approached this in a way that was respectful of your (profits and losses), making sure you could implement these changes in bite-sized pieces to keep the costs down,” she said. “And we tried to right-size (property improvement plans) when you had them to keep your costs down.”
The company will continue to watch guest satisfaction scores closely this year, McLaughlin said. If scores don’t improve, there will need to be some type of renovation program in place.
“We need you–you need you– to keep investing on your own to meet rising guest expectations and competitive standards,” she said.