LAS CROABAS, PUERTO RICO– La Quinta used the first day of its annual brand conference here to inform the 800 assembled franchisees, general managers, and corporate employees that it has reached the 600 hotel milestone. President/CEO Wayne Goldberg told the general session being held at the El Conquistador Resort & Casino that the mid-price brand, comprised of both La Quinta Inns and La Quinta Inns & Suites, added 70 franchised hotels in 2006, the highest one year total since the franchise program began in 2001. An additional 135 hotels are in the pipeline, more than 90% of which are new construction. The future of La Quintas franchise program was thrown into doubt last year, following the acquisition of Dallas-based La Quinta Corp. by New York-based private equity firm The Blackstone Group. Blackstone has built its hospitality portfolio on the strategy of owned assets, but both Blackstone Real Estate Advisors senior managing director Bill Stein and La Quinta executive vp for franchise operations Rajiv Trivedi, each of whom followed Goldberg to the podium, confirmed that Blackstone supports the growth of the franchise system at the same time it is continuing to support the expansion of the corporate owned portfolio. La Quinta, in fact, opened 17 corporate owned hotels in 2006. Included in this number were four formerly franchised properties— located in Long Island, NY, Florida, South Carolina, and California—that Blackstone acquired during the year. According to Stein, the 17 newly-opened corporate hotels represented an investment on Blackstones part of $250 million. Trivedi underscored the importance of the continued emphasis on franchising to the overall health of La Quinta. “Smart franchise growth is not just good for franchisees or for the parent company,” Trivedi told the assembled franchisees. “Its good for every hotel that flies the La Quinta flag in every location. Smart growth means increased distribution. More distribution means more guests know the brand and have better experiences with us. These are guests who will ultimately stay at your hotels.” Trivedi added that smart growth also means more experienced hotel owners. “Better best practices make us all perform better and make more money,” he noted. Another positive sign for the brand was that 2006 also saw the first franchise agreement signed to open a La Quinta outside the U.S. That hotel—in Mexico—will open this year. “We also see Canada as a logical market for the brand,” Goldberg noted, though he said he didnt see the brand expanding outside North America any time soon. “We have more than ample opportunities right here,” he said. Not coincidentally, this years annual meeting is the first time La Quinta has gone outside the continental U.S. for its meeting site. El Conquistador Resort & Casino, meanwhile, is part of LXR Resorts & Hotels, which is also owned by Blackstone. Outside the main meeting room, La Quinta constructed mock-ups of its new room decor packages. The introduction of the new decor schemes is part of a larger renovation project the brand is currently undertaking. “We need to be sure our properties look the best they possibly can, given the importance of guest satisfaction,” Goldberg noted, adding that the mid-price lodging segment continues to be highly competitive. In his presentation, Stein noted that Blackstone has committed $100 million to upgrade its corporate owned hotels. In addition, Blackstone and La Quinta management continue to look for ways to crate synergies among various Blackstone owned brands that will improve the brands appeal to consumers while enabling the brands to operate more efficiently. These synergies include working with shared telecommunications and other technology vendors. In addition, La Quintas frequent guest program, currently known as Rewards, will for the first time add aspirational point redemption options by offering program members stays at deluxe LXR properties. By impro
Blackstone Real Estate Advisors senior managing director Bill Stein