Candlewood Sees Projects Coming Out Of The Gate

NEW YORK— The mood was upbeat at the International Hotel/Motel & Restaurant Show for Chick Armstrong, vp-franchise sales for Candlewood Hotel Co., who is manning the company booth here with Doug Schadle, director of franchise development. “Business looks like it’s picking up a little bit,” Armstrong told HOTEL BUSINESS®. “We keep looking for positive indicators. The things that we see right now that are making sense to indicate coming out of the doldrums is that many of our projects that have been in backlog have gotten funding and gone under construction, so we’re looking at that as a very positive sign.” He added “the next logical step in the improvement in the industry for us then to see new franchises being sold and funded. We’ve had a backlog of deals that we’ve sold that weren’t under construction, so logically we think funding’s getting a little bit easier.” He noted the funding issue was more germane to the Candlewood Suites product, as the company’s Cambridge Suites product is mostly conversions, “so funding is not as difficult.” Schadle agreed that “things seem to be loosening up. We’re getting some deals done and they’re getting some funding, but they’re having to work for it. That seems to be the deal.” He said 30% equity was the figure he was seeing “all the time.” “A lot of lenders are saying they’ll do it at 25% but they end up being 30%-35% Theyre trying to get the people to come look at them. But it seems to be getting better. We’ve just opened up some new hotels, and have some others under construction that are coming our of the gate really well.” Armstrong said from a development pipeline perspective, the company is seeing more activity on the West Coast than anywhere else. “Their economy runs on a different engine than the rest of the nation. It’s usually harder out there, but right now we’re seeing more and more activity in California. Regionally, that one’s sort of ahead of where it usually is.” —Stefani C. O’Connor