LAS VEGAS—With 1,221 properties now under its belt, Vantage Hospitality Group, Inc. had a few areas of focus at its annual conference, held here at the Hard Rock Hotel & Casino Las Vegas—namely, a restructuring under Vantage Hotels; a focus on distribution and renovations; and the repositioning of the Signature Inn brand.
Last year, Vantage divided its brands into two divisions: the upscale brands, which include Lexington, Jameson Inn & Suites and 3 Palms Hotels & Resorts; and the value brands, which include Americas Best Value Inn (ABVI), Canadas Best Value Inn (CBVI), Signature Inn, America’s Best Inns and Country Hearth Inns & Suites. Now, the company will focus on leveraging the power of its brands under one umbrella: Vantage Hotels, and its site, Vantagehotels.com.
President/CEO Roger Bloss noted, “In today’s advertising world, size and leverage are critical, so expanding this approach will maximize overall exposure for each brand. When you’re looking at key word buys and search engine optimization, it’s more cost effective and it has better consumer awareness. How do we take the larger brands and the smaller brands, in terms of number of properties, and get them on a level playing field? By going to Vantage Hotels, we can do a lot more effective cross-marketing and cross-selling.”
Bernie Moyle, COO/CFO, added, “Even though we talk about the umbrella, the marketing is still brand up. When someone does a search for ABVI, they’re still going to find it and then we’re going to take them into Vantage Hotels for the purpose of making a reservation.” Moyle noted that the vast majority of the company’s guests flow through ABVI and Lexington’s sites. “We’re not letting go of that. We’re using those URLs and that traffic to redirect them over,” he explained.
Leveraging the power of many brands also helps on the back end, said Moyle. “The numbers give us the ability to negotiate better deals,” he said. “We have a new contract coming with Priceline that will be a fantastic advantage to our members: lower cost, lower margins. We’ve been able to negotiate those deals because we have a big family of brands. It’s simply competition. Whereas the margins were 28-30%, now they’re coming down to—depending on the product, the market and the program—as low as 15-22%.”
Bloss noted that Vantage is looking to create a rewards program to entice guests to book direct. “If we can get those OTA customers into our club, now you’re talking about bringing more customers to your property that you might not have had access to before,” he said, noting that he believes the club should “have both an instant reward- and point reward-type system. We’re creating a committee that anyone can be a part of.”
During the conference, members also met to discuss several resolutions. The value brands membership discussed a common communications platform, updating the current QA program and the evolution of hotel breakfast to help determine potential voting topics in the future. The upscale brands membership voted on four resolutions, which all passed: the Concept Amenities Pomona amenity line was accepted as compliant with standards for the upscale brands; as of June 1, 2016, all Lexington properties that do not have a full-service restaurant must offer the Lexington-branded grab-n-go Breakfast Box in addition to a continental breakfast; effective June 1, 2016, all properties must subscribe to all HD channels offered by their providers for display on all TVs; and monthly marketing fees payable by each Lexington property were increased $2 to $22 per room per month, which went to effect Jan. 1. The last two resolutions were unanimous.
Another big theme at the conference was one that shouldn’t be particularly shocking given current market fundamentals: renovate. Moyle stressed the downside of waiting. “It’s like the stock you didn’t buy, the vacation you didn’t take, the girl you didn’t ask out,” he said. “If you don’t do it now, you’re not going to have a shot at that RevPAR increase.”
During the conference, the brand demonstrated what an entire guestroom renovation would cost, pricing a queen room at approximately $3,000. “We reached out to our vendors to find out what our members who are renovating are doing. Who are they using? What kind of price points are they looking for? A lot of this information comes from our members directly,” said Moyle. “And, we’re doing it ourselves.”
“We know there’s going to be another turn,” reasoned Bloss. “If you’re putting money back in your assets, you can raise rates immediately while people are willing to pay it. Then, if there is a downturn or slowdown, your asset is still in great shape because it’s early in its lifecycle.”
One change from last year is the repositioning of the Country Hearth and Signature Inn brands, both of which were acquired in the America’s Best Franchising, Inc. deal last year. “Unfortunately, under prior ownership, Country Hearth had been somewhat downgraded,” said Moyle, noting that higher quality Country Hearth properties were notified that they need to move into Jameson or ABVI. “That will leave us with a group in Country Hearth that will be, from a quality perspective, at a price point below ABVI.”
Patrick Mullinix, group president, Vantage value brands, said that, at the same time, Signature was being elevated to upper-economy. “Signature Inn was the mystery brand. It had not been used in the marketplace since around 1999-2000,” he said. In speaking with hoteliers a common thread occurred: people thought Signature was a very high-end product. “That stemmed from the connotations of the name,” he said.
Bloss added that the midscale, select-service segment has been a popular construction model for years. “Signature gives people a chance to edge up against that with a lower construction cost and a more adaptable plan, yet be able to push the rate that market will drive,” he said. “It’s the low cost and strength of the brand affiliation, without putting forth the much larger capital investment. You can buy a $40,000 Mercedes or a $240,000 Mercedes, but it’s still a Mercedes.” Bloss noted that the cost of being part of the Signature brand is equivalent to one minimum wage employee.
So what will Signature entail? Mullinix described it as a “trendy, relevant brand that has overtones of—if not completely—boutique-like features and amenities.” An Austin, TX, native, Mullinix referenced the city’s motto: Keep Austin weird. “To me, the word weird is good. We want weird,” he said. “The other thing that goes along with that is the word fun. When we talk about amenities, decor and the essence of the guest experience—if it’s not a little weird, fun and exciting, then we have missed
the mark.”
Vantage will fully launch the brand at the AAHOA conference, but properties are already in development. Bloss noted that the brand does have a prototype—
the first new-construction is currently being developed in Houston, and there are more on the way in South Beach, Los Angeles and the Bay Area—but owners will have freedom to customize with their own styles and services.
Vantage wants a heavy emphasis on new construction—“we think the brand deserves it,” said Mullinix—and the company has tapped Curve Hospitality to help with interior decor. Vantage asked the company to come up with five concepts that don’t resemble traditional hotels. “I envision being able to offer our franchise partners an option to choose one of the five that fits their market or their feel,” said Mullinix. However, interior decorations will be up to the hotelier and have to be relevant to the community. HB