ST. PAUL, Minnesota—Northcott Hospitality had plenty of options to grow its AmericInn Hotels & Suites brand. Long focused on the upper Midwest, the midscale brand could have expanded into the northwest, northeast or even across the 49th parallel into Canada.
Instead, the company opted to take a much bigger leap, focusing expansion efforts on the Middle East and Asia, primarily within the Indian subcontinent.
Speaking at the brand’s conference in St. Paul, Minnesota Monday, AmericInn President and CEO Paul Kirwin said the move makes the most sense to the company because its growth is based more on opportunity than geography.
“Companies that have an asset-light model like us have to follow opportunities,” Kirwin said. “There are a lot of brands in the marketplace, so before you move into a new market, you have to be confident there is room for at least one more. That’s why we believe (in Asia and the Middle East).”
AmericInn is partnering with Eaglewing Estates and Hotels Pte Limited, which operates in both Singapore and Dubai, for its global expansion efforts. Over the next five years, company officials hope to see more than 20 hotels open in markets such as Dubai, Mumbai, Bangalore, Riyadh and Abu Dhabi.
Kirwin said he’d be far less bullish on a move to Canada, which he described as “a mature market with a lot of issues and challenges but not a lot of opportunity.”
Kirwin said unlike many companies that make global pushes, AmericInn officials aren’t doing this to necessarily generate brand awareness for international travelers to the United States. He said, just like the company’s U.S. properties, AmericInn hotels in Asia and the Middle East will focus primarily on domestic travelers for the countries they operate in.
Nasir Raja, EVP of franchise development and operations, said the company isn’t putting domestic expansion plans on hold as it chases global gains, either. He said the company is working with a handful of developers to grow presence in Kansas, Nebraska, Illinois and Michigan. The company has about 200 properties in its portfolio.
2015 performance
Kirwin described 2015 as a record-setting year during the opening general session of the brand conference Sunday. AmericInn saw system-wide revenue per available room grow 4% for the year with revenues hitting an all-time high of $218 million. Occupancy hit 57% for the brand, another record. Average daily rate grew to $92.
Mark Masuda, VP of marketing, sales and distribution, said the company saw strong and sustained market-share growth for the year
So far in 2016, Kirwin described first-quarter performance as soft, driven mostly by a drop off in corporate business tied to the waning oil and gas industry. He believes low gas prices will in the end be a boon to the company, with strong leisure travel in the second and third quarters expected to more than make up for a slow first quarter.
Company officials said the success of 2016 will be based largely on how well individual properties do in driving rate.
Loyalty growth
Masuda said the company has seen positive results from the growth of its elite-level loyalty program, which rolled out in 2015. He said the elite tier accounts for 8% of membership but 25% of revenue.
So far, customer reactions to the elite tier have been positive, Masuda said.
Company officials said the next step for their loyalty efforts could be embracing the recent trend of discounted rates for loyalty members. But Masuda said he’d like to see how those programs fare with the big players who have rolled them out, particularly Marriott International and Hilton Worldwide Holdings, before committing to doing so.
“So far we’ve planted that seed that it may be coming,” Masuda said. “But for now we’re watching. We want to see if there’s any negative actions from it from the (online travel agencies) and how much it cuts into the bottom line.”
Editor’s note: AmericInn Hotels & Suites provided hotel accommodations for three nights. Complete editorial control was at the discretion of the Hotel News Now editorial team; AmericInn had no influence on the coverage provided.