CHARLOTTE, NC—Extended Stay America (ESA) unveiled its five-year growth strategy, anchored by its first-ever franchising program and a return to new hotel builds, the first in a decade.
In a United States industry that comprises 55,000 hotels and 5.2 million hotel rooms, approximately 22% of demand for those rooms comes from guests staying five nights or more at a time, yet only 8% of the available inventory is considered extended-stay, according to the company, which credits this potential as a reason for its strategy.
As part of the brand’s previously announced ESA 2.0, Extended Stay America expects in the coming months to return to unit growth, with a target portfolio of 700 Extended Stay America-branded properties by 2021, approximately 70% of which will be owned/operated and 30% franchised. The company will also adopt an asset merchant approach to its large real estate holdings—buying, selling, developing and improving real estate one site at a time.
“As we begin franchising at ESA for the first time, we’re seeking partnerships with well-capitalized franchisees capable of developing their market areas, which might include buying the existing corporate-owned ESA hotels and converting them to franchised units. We would like to see our prospective owners ‘cluster’ operations for better efficiency and pricing power within their markets and match their local development and ownership expertise with the advantages of Extended Stay America’s scale,” said Extended Stay America EVP and Chief Asset Merchant Jim Alderman. “The goal is for each franchisee to control multiple properties, with the potential of taking ownership of and facilitating our brand’s presence in entire markets.”
By 2018, Extended Stay America will be actively franchising, according to the company, with interested partners having options to convert existing assets, buy and franchise existing hotels from Extended Stay America, or build new franchised properties.
Over the last five-plus years, Extended Stay America has invested over $1 Billion for portfolio-wide renovations and other capital improvements. Having studied how guests utilize the existing product, new features include smart storage, reimagined common areas and an exclusive double-queen room layout. Additionally, Extended Stay America will continue providing amenities key for guests’ comfortable and frictionless stays, including fully equipped in-room kitchens, free in-room WiFi and grab-and-go breakfast, onsite laundry facilities and pet-friendly accommodations.
Additionally, the company recently added new team members, including Judi Bikulege and Steven Scheetz, managing directors of real estate; and Stephen Miller, managing director of real estate development.
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