MINNEAPOLIS—While AmericInn had much to celebrate at its recent annual convention, here, the brand is determined not to rest on its laurels, as the company anticipates expanding the brand by 10% in the coming year.
“These are good times for our industry, but we can’t take this success for granted,” said Paul Kirwin, president and CEO, Northcott Hospitality, addressing the crowd of some 550 franchisees, vendors and corporate staff at the annual convention held here at the Hyatt Regency Minneapolis last month. “Companies that don’t evolve in today’s fast-paced, technology-driven world are likely to be left behind.”
Despite the word of caution, Kirwin and other brand leaders noted several achievements from 2013, such as system-wide RevPAR growth of 4.2%, and generating over $200 million in system-wide revenue, an all time high for the brand. National account sales hit an all-time high of almost $8 million.
“One of the things that I’m most proud of is the report card we got from MarketMetrix, which runs our guest satisfaction system,” said Kirwin. “Our product scores until about four to five years ago were declining, and over the last few years we’ve had a major push to improve the product at AmericInn. They said when you improve the experience for the guest, the two indicators for the economic payoff for that investment are your likelihood to recommend and likelihood to return.” Over the past couple of years, AmericInn has experienced a three-point growth in both categories (reaching 75% and 76%, respectively), which it attributes to the AmericInn Refresh program.
The brand hasn’t just been updating its product, but it’s internal resources as well. “Over the last couple of years, we’ve made a commitment to you to improve the direct support we provide and we made a big investment in our brand intranet,” said Kirwin. “We restructured the service desk team and invested in technology so we could really be a professional call center that ensures that when you call us or email us, we know who you are, we can document what help you need and we ensure you get it.”
Nasir Raja, EVP of franchise development and operations, added that franchisees would continue to see improvements this year. For example, QAEs will be evaluated on an iPad and all scores and data will be available online. PIP progress and scorecards will also be available. “We are trying to put rankings online and make them public,” he said, noting that this will allow a property to see where it falls. “I think it’ll encourage healthy competition; this is going to help get the system up as a whole.”
Raja updated attendees on the state of development in the industry, noting that most analysts believe we’re in the middle of the cycle. “Even if you take the conservative route, we are in the middle so that means we have three-plus years left for RevPAR improvement,” said Raja. “The other neat thing about this upswing is development has not come back the same as the last two cycles. Supply continues to be at an all time low. This year, most analysts believe there will be a 12% increase in new construction, which means it’s coming back but not in the same rapid way it came back in the last two cycles.
“Our growth strategy has not changed in the last few years,” he continued, noting that it’s a two-pronged approach: leveraging the new construction cycle and quality conversions in major markets. “These major market conversions are helping us expand our footprint,” he said, referencing the recent addition of properties in markets like suburban Chicago, suburban Minneapolis and suburban Omaha. “We anticipate expanding the brand by 10% over the coming year,” he said, adding that the current pipeline has 10 conversions and 16 new-builds, and AmericInn has a goal of signing 10 new agreements in 2014. AmericInn currently has over 200 locations open or under development in 24 states. “Our brand is in a good place. We are a powerhouse in the upper Midwest and that gives us the strong footprint to grow nationally,” he said.
The brand’s strength in the Midwest will drive many of its traditional marketing initiatives. The brand has billboards in four major Midwest airports: Minneapolis; Madison, WI; Des Moines, IA; and Milwaukee, WI. “Over our three month buy, we’re going to have nine million travelers and potential guests be exposed to our brand,” said Mark Masuda, VP of sales and marketing.
“In addition to the airport billboards, we’re doing some radio ads this year in our top ten feeder markets as well as on Pandora,” he continued. AmericInn has also developed a partnership with the Minnesota Twins, which reaches 82% of AmericInn hotels. Each broadcast will feature one-two commercials and a live endorsement from an announcer. In addition, the brand sponsors the out of town update from other teams in the American League at the ballpark.
Another new initiative is Random Acts of Vacation, which invites anyone to nominate a friend that deserves a vacation to win $400 worth of free nights at any AmericInn. The brand will pick two winners per week throughout the summer. “It differentiates us from the competition and most of all it’s part of the AmericInn DNA: doing good things for people who make a difference. In less than two weeks we have over 150 nominations,” said Masuda, who noted that social media and Internet marketing would be a focus for the brand.
AmericInn is also planning to create an elite tier of customers in 2015. “9 percent of customers drive 35% of our revenue,” said Masuda. “We need to recognize and reward our very best customers. We’re going to work with the owners advisory board and the GM advisory board to come up with something that’s valuable to the customer and that you’ll be able to operationalize.”
AmericInn will also focus on Millennials. “We have to be thinking about how we invest in our business to ensure that tomorrow’s consumers will line up and will choose AmericInn,” said Kirwin. “To me, it’s clear we’re going to have to continue to invest in our brand and our hotels to ensure we remain relevant. There are three areas we have to continue to focus on at the brand at each of your hotels: people—our welcoming service and culture; we’ll have to continue to invest in our product in two ways: with FF&E upgrades and technology; and the last thing, which we take deep responsibility for, is we have to continue to invest in our sales and marketing. We have to do that in bold, compelling and exciting ways, and we’ve got to talk where consumers are listening.”