WICHITA, KS—While it may be true that a rose by any other name would smell as sweet, with all due respect to Shakespeare, perception counts a lot for consumers. That’s what executives at Value Place learned and why the extended-stay brand has changed its name to WoodSpring Suites, ushering in what CEO Bruce Haase calls a fresh start for the company.
“Brands and names communicate expectations, and consumers use brands as shortcuts for decision-making,” said Haase. When Value Place launched, it was a hybrid between an apartment and a hotel, called a short-term residential apartment property. “We’ve evolved from that to being the leading extended-stay hotel in the value space,” he said. “The company and product has changed, and the name no longer fit.”
Another problem with the name? It only communicated one of the brand’s promises: price. “And, some things it communicated were confusing,” said Haase. “Value Place doesn’t necessarily sound like a hotel. It got confused with Value Village, or a furniture store or a hardware store or a self-storage unit. It didn’t really resonate that it was a hotel.”
The company spoke to some 10,000 consumers in the extended-stay space, both loyal guests and those who stay with competitors. “A tremendous amount of consumer research validates the rebranding,” said Haase. “Rebranding can bring in new types of customer segments we hadn’t had access to in the past. It can get us into new and higher value markets in the country, and our primary objective is to build a truly national, well-distributed brand. We think WoodSpring Suites is going to get us there.”
So, what do WoodSpring Suites and its logo communicate to guests? Haase elaborated, “It evokes a lot of positive attributes. You think about the leaf, it evokes nature, something that’s clean and fresh. The wood evokes something solid that you can count on. These are all things that our existing identity didn’t trigger in the consumer.”
Haase noted that, while the company is rebranding, it doesn’t mean it wasn’t successful. “In 2014, we hit all kinds of records in terms of our financial performance, new development and new cities we’re entering,” he said. “We’ve had an extremely profitable and successful operating model. One of the ways [we could build on that success]is taking what is an incredibly profitable and successful operating model and marry that with some real branding and marketing.
“We should be on track to develop 100-plus hotels over the next four to five years in accordance with agreements already signed, so I see this as really enabling a lot of that pipeline to go forward quicker,” he continued.
As such, there won’t be many changes to the company’s operating model. “We feel that’s what distinguishes us,” said Kyle Rogg, president and COO. “The operating model is really the secret sauce. The consumers didn’t ask for a change in the operating model; they asked for a change in identity. There will be very small changes to the guest experience.”
Over the next nine months, all 196 hotels in 32 states will be rebranded to WoodSpring Suites. When asked about the cost to franchisees, Rogg noted, “We took [them]through the consumer research, and one thing the consumers told us was that, based on the name and logo change, there was a willingness to pay a higher rate. The intent to stay more than doubled. We think the additional revenue will more than account and compensate for the cost of rebranding.”
Rogg also noted that the company owns 84 of the properties. “Since we do own those, we go through that ROI calculation for us as well. We’re not asking franchisees to spend money that we’re not willing to spend,” he said.
“We had a standing ovation led by the franchisees [when we made the announcement],” said Haase, adding that he doesn’t expect many de-flaggings. Added Rogg: “It’s a rare occasion when you tell [a group]they have to spend money for rebranding, and they stand up and applaud you.”
Haase noted that this could also open the company up to new developers, in addition to new customer segments. “We’re very fortunate that we have a group of committed, sophisticated developers,” he said, noting that they largely consist of commercial developers, former apartment developers and self-storage developers. “Part of our struggle with traditional hotel developers has been explaining what it is,” he said. “The first thing you have to explain to that group is the name. I think this will put us on radar screens we might not have been on in the past.”
Additionally, WoodSpring Suites is developing a brand extension: WoodSpring Suites Signature, designed to appeal to less price-sensitive guests. “This new prototype will be slightly above the current WoodSpring Suites prototype,” said Rogg. “It will enable us to get into higher markets that have historically been difficult for an extended-stay product.
“It’s still very much the same consumer feel, but we believe it will be attractive in some markets that are more difficult to obtain entitlement and land, and [where]construction costs are higher,” continued Rogg. “We believe the consumers will be willing to pay a little more—but still in what we term the value segment.” Rogg noted that the brand extension would have a few more elements, such as an exercise room, a sweet shop and weekly laundry rather than every two weeks.
“It’s a new launch of the company in many ways,” said Haase of the changes. “We’re not just changing a name and logo, but this is a comprehensive plan that has many facets in terms of product, marketing and geographic growth to really bring this company to the next level and be a more dominant player in this segment. The sign is the most visible and tangible thing you can see, but this is enabling us to build a strong company going forward.”