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MainStay Prioritizes Aggressive Growth via Conversions

Gulf Coast Hotel Management, Inc. Converts 15 Hotels to Brand
Gulf Coast Hotel Management, Inc. converted 15 Hawthorn Suites by Wyndham to Choice’s MainStay Suites brand. Pictured here is a room in one of the hotels being converted, the Hawthorn Suites by Wyndham Cincinnati Blue Ash. (MainStay Suites)
Gulf Coast Hotel Management, Inc. converted 15 Hawthorn Suites by Wyndham to Choice’s MainStay Suites brand. Pictured here is a room in one of the hotels being converted, the Hawthorn Suites by Wyndham Cincinnati Blue Ash. (MainStay Suites)
Hotel News Now
January 27, 2021 | 2:54 P.M.

Growth through purpose-built conversions is the priority for Choice Hotels International’s MainStay Suites brand, according to Ron Burgett, senior vice president of extended stay.

MainStay’s most recent — and largest — conversion success was through a deal in which Gulf Coast Hotel Management, Inc. converted 15 Hawthorn Suites by Wyndham properties to the MainStay flag, he said.

Choice has worked with Gulf Coast Hotel Management, Inc. CEO Ian McClure for many years, and building that relationship with him and his company helped make the deal happen, Burgett said.

“At the end of the day, this decision was made in part because of our ongoing relationship with [Gulf Coast Hotel Management, Inc.] and [McClure’s] access to our senior management team,” he said. “He was able to help us direct what we wanted to do with [MainStay] as we re-engineered it. This [conversion deal] has been going on. It’s a package deal. [McClure] had options, he wasn’t tied to a previous franchise agreement, so that’s how we got in the driver’s seat here.”

Choice’s focus on relationships and the return on investment to franchisees also helped the company land this portfolio with Gulf Coast Hotel Management Inc., he said.

Growth Through Conversions

Choice has four brands in the extended-stay segment, and since the acquisition of WoodSpring Suites in February 2018, the company has focused on extended stay, Burgett said.

“We want to continue to put a lot of energy, time [and] training into growing extended stay,” he said.

Burgett said MainStay has two growth vehicles.

“One is our Sleep/MainStay dual brand concept where there are the two flags on-property and MainStay is typically a smaller portion of it,” he said.

Conversion activity — like the deal with Gulf Coast Hotel Management, Inc. — is the strongest growth vehicle for MainStay, he said.

Choice wants MainStay to be the go-to brand for converting purpose-built, extended-stay properties, or hotels that already have guestrooms with kitchens, he said.

“That’s really our priority to go after and grow the system fairly aggressively over the next three or four years with conversion activity that’s purpose-built,” he said.

Third-Quarter 2020 Performance

Third-quarter results give a good picture of how the MainStay brand has performed in recent months, Burgett said.

Through the quarter, performance was “just down 11%” from the previous year, which was “a little bit more than what we did with our WoodSpring brand,” he said.

Average daily rate was also down 10% through the third quarter.

“That shows you we didn’t take the hit during transient hotel months,” he said.

Safety and Cleanliness Standards

Choice has a thorough program in place to ensure hotels meet all safety standards, and that has been rolled out in the form of a checklist to extended-stay hotels, Burgett said.

These standards are not new, but they are a little different for the extended-stay segment, so MainStay and other brands have adapted and are making sure all hotels are clean and safe through a 99-point checklist, he said.