Background:
Rajiv K. Trivedi, known as “Raj”, is evp/franchising and chief development officer of LQ Management LLC, which operates some 800 hotels in North America under two brands: La Quinta Inns and La Quinta Inns & Suites. The Dallas, TX-based company prides itself on having “skin in the game,” with nearly half its portfolio made up of owned properties, something it touts as giving it greater insight into its franchisees’ needs. Promoted to his current role in 2009, Trivedi joined La Quinta as vp/franchise operations in late 2000. He picked up the ball and ran, something he’s continued to do for the past decade, with hundreds of license agreements signed. Among management roles in his 21-year industry career, Trivedi previously served as vp/franchise operations at then-Cendant Corp. (now Wyndham Worldwide). There he oversaw franchise services, quality assurance, regional marketing, guest services, reservations, property openings and training for the Howard Johnson International brand.
Current Challenges:
In terms of development “it is very difficult to find financing,” he said, noting it is the bane of the industry at present. That segues to his second challenge of fulfilling agreements and “getting the new projects in the ground. Uncertainty and current financial situations of individual franchisees make it difficult.”
A third challenge has been tackling is deployment of more resources for properties that open in today’s environment “to make sure they become sustainable very quickly so ownership doesn’t run into any financial situations,” he said. He is also making sure existing franchisees “are supported well, perform well and remain leaders in their market share and guest satisfaction.”
2011 Agenda:
The company will continue to focus on enhancing performance of all its hotels and ensuring, as the economy improves, that revenue is well managed. It also will remain focused on its franchise side as opposed to gaining properties for its own account.
“We have not done any acquisitions in the past two, three years,” said Trivedi. “However, for the right opportunity, we’re always an owner and we’ll consider acquiring, but from a financial/location point of view it would have to make sense.”
At press time La Quinta had 372 corporate-owned hotels and 432 franchised hotels. It has been making a concentrated effort in Mexico, and next year it intends to push farther internationally as it expands in Central and South America.
What HB Sees:
As fundamentals improve, look for La Quinta to build stronger relationships with REITs and larger companies, as well as franchisees, so it’s prepared for increased opportunities as financing becomes available, particularly as new development picks up in second-half 2011. An emphasis on doing business outside the United States as a means of growth will have the company thinking outside the prototypical LQ box to meet and exceed the needs of international owners and developers, as well as guests.
Its determination to look to other regions, even in the face of global recession, has allowed it to surpass its 800-hotel goal earlier than the expected first quarter, and now has it looking at 850 properties as the next benchmark.
Look for Trivedi to ensure that continued rapid growth remains aligned with the deployment of company resources to meet the needs of franchisees, some of which have expressed interest in acquiring existing or high-profile, corporate-held product. While Trivedi has indicated, “Never say never,” it’s unlikely that would occur in 2011.