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Multi Unit Franchisee Article - Issue 1, 2009


Real Estate Roundup

Caerus Hospitality plants another
flag in San Antonio hospitality market

Friday, November 4, 2011, 5:00am CDT
Tricia Lynn Silva Reporter/Project Coordinator - San Antonio Business Journal

A hotel company is looking to expand its brand of hospitality in Central Texas.

And it has made one of San Antonio's fastest growing submarkets a part of that plan.

This week, Caerus Hospitality Partners celebrated the grand opening of its newest property. The Microtel Inn & Suites at Seaworld/Lackland AFB is located at 1605 West Loop 1604 South, on the city's far West Side.

The $7 million project is part of Caerus' larger unfurling of the Microtel flag in Central Texas, explains Ted Torres, president of the Phoenix-based hospitality firm.

The plan has been to target markets that boast a very stable economy and strong hotel fundamentals.

"All roads led to Central Texas," Torres says.

The new hotel in far West San Antonio actually marks Caerus' second property in the Alamo City. About a year ago, the firm purchased the Microtel Inn and Suites Airport North, on the city's North Central Side. Caerus purchased the 7-year-old property out of foreclosure. After the sale, Caerus went to work, investing $400,000 to modernize the hotel, Torres says.

The SeaWorld/Lackland hotel is bringing something unique to the far West market — namely a brand-new property with rooms priced below $100 per night, Torres says.

Now add to that attractive price point the fact that this brand new Microtel is located a mere two miles from one of San Antonio's leading tourist attractions, SeaWorld.

Finally, Caerus' new hotel is ideally situated to take advantage of its location within Westover Hills — a master-planned community that continues to reign as one of the Alamo City's leading employment hubs.

When it comes to hospitality, however, the area is still vastly underserved.

"Westover Hills does not have a sizable amount of hotel development — that's good for us right now," says Torres.

Microtel is one of several brands under the Wyndham Worldwide umbrella. This particular flag marks Wyndham's updated take on economy lodging, Torres says.

For example, as is the standard in all of the Microtel hotels, the rooms in the SeaWorld/Lackland property will boast higher-end touches like granite countertops and 42-inch flat-screen TVs. Guests will be treated to a complimentary hot breakfast in the mornings, and a complimentary beer/wine social in the evenings.

"Wyndham is reinventing what the economy hotel is," Torres adds.

Before our eyes

Over the past 25 years, Caerus has built numerous hotel brands in many markets in the U.S.

About four years ago, the company turned its attention to Microtel.

Among the factors that made the brand attractive to Caerus was Wyndham's rule that all Microtel hotels would be built as such from the outset — no conversions of existing hotels to try and fit the Microtel brand. Caerus also recognized that the trying economic times have made a budget-friendly line like Microtel more attractive to today's travelers.

"The days of the $500-a-night room — you're not going to see (demand for that product) for quite a long period of time," Torres says.

Next came the question of where Caerus would target the Microtel brand.

Hailing from a city like Phoenix, where the economy "vaporized before our eyes," Caerus had a unique vantage point — an appreciation of which U.S. markets still had viable economies for new hotel development.

Enter Central Texas, and the San Antonio/Austin corridor.

"Relatively speaking, the negative effects of the economic downturn have had minimal impact (in San Antonio and Austin)," says Torres.

Next up for Caerus, a new Microtel in Round Rock and in Buda — both of which are part of the greater Austin market. From there, Caerus will look at other cities for the brand — including San Marcos, Seguin, Kyle and Marble Falls, Torres says.

Tricia Lynn Silva covers real estate, retail, construction, and law firms; she also plans and edits some special reports.

Cheap sleeps: Check out what's new at budget hotels

By Kitty Bean Yancey, USA TODAY

Microtel chief Roy Flora was on a plane when he got the idea: Select a guest when visiting his lodgings and reward chosen ones with a free stay.

"I've done it about 50 times," he says. "I look for someone who may be on a restricted budget (perhaps using an AARP card or notably rate-conscious) and I say, 'Put away your credit card and cash. It's on my bill.' " One couple in their 70s "looked at each other and start ed to cry," he recalls. They had brought a granddaughter to Atlanta for spinal surgery and were on a tight budget.

Flora, group president of Microtel Inns & Suites, empowers staffers to do the same, part of a chain-wide policy to "surprise and delight" those who check in. That and other Microtel hallmarks have placed its 301 properties atop the economy/budget hotel category for an unprecedented seven consecutive years in the prestigious J.D. Power and Associates North America hotel guest satisfaction survey. It wins for consistency in product and service, J.D. Power says.

And as the economy wreaks havoc with hotel revenue, Microtel and other budget chains whose rates average under $70 are picking up customers who used to opt for pricier lodgings. They're also offering more bang for the buck, with updated rooms and increased emphasis on personalized service.

All Microtels are owned by franchisees who meet strict standards. Revamped or new ones boast quarters that are a budget version of more upscale hotels: platform beds (easier for housekeepers since there are no dust bunnies), cushier mattresses, white duvets, large flat-panel TVs.

As at a growing number of economy lodgings, free Wi-Fi and breakfast are offered. Microtel rates also include complimentary calls in the continental USA. But Flora, a veteran hotelier and former franchise consultant, attributes much of the chain's success to "service and delivery, not just the product." So does Microtel deliver?

To find out, USA TODAY checked in unannounced Sunday night at a three-week-old property 50 miles north of Atlanta's Hartsfield International Airport in Canton, Ga. Like most Microtels, it is compact — just 71 rooms and suites.

Front-desk staffer Jennifer White, a nursing student at Kennesaw State University, was helpful on the phone before arrival, giving directions. The new Microtel is next to a Hooters restaurant and a Wendy's, not a particularly lovely location.

But inside the nondescript four-story building, White's cheery greeting was worthy of a four-star lodging. She checked that the room and its location were acceptable (a $61 single on a high floor away from the elevator) and suggested spots for dinner.

Room 412 was small but spotless. A 26-inch flat-panel TV and modern nature print hung on stucco-like walls, done up in soothing shades of chocolate and butterscotch. A pillow for back support sat on Microtel's signature window seat. Energy-saving fluorescent bulbs were hidden and softened by a cheap-chic Japanese-style light box over the bed.

The small bathroom boasted a granite counter and a curved shower rod to make bathing less claustrophobic. Only old-fashioned plastic cups and lack of minibar screamed "budget hotel."

There was one truly jarring note: the maddening drip, drip, drip of a leaking bathtub faucet.

A minute after that discovery, the phone rang.

It was White, asking, "How do you like the room?" Informed of the drip, the fresh-faced brunette raced up to show alternative quarters, all more spacious and none with a feisty faucet. She volunteered that she had called the manager of her favorite restaurant and there would be no problem getting a table.

"I want to make sure guests are comfortable," she said, because some are hesitant to voice their concerns. Such staff behavior is no surprise to Flora.

New employees get his "Recipes for Success" pamphlet containing such mantras as "we are only as strong as the reputation our customers remember from their experience with us."

Flora, 64, ticks off other reasons for the two decade-old chain's popularity with consumers. New construction is a hallmark, he says. "We will bring no conversions (of other branded lodgings) into the system." Thirty Microtels are under construction.

Competitors, including Motel 6 and Red Roof Inn, also are renovating. It's a "boutique approach to economy lodging," says Red Roof CEO Joe Wheeling. Guests like fresh and modern rooms, hospitality experts agree.

And what do analysts think of Microtel, acquired by the Wyndham Hotel Group in July ?

It's a "lean, consistent" operation, "and the profit margin for this type of hotel is the highest in the industry," says lodging specialist David Loeb of Robert W. Baird & Co. He does question whether Wyndham will be "more concerned with growth than maintaining brand standards."

Meanwhile, travelers are increasingly seeking bargains, which bodes well for economy lodgings.

November and December were rough on every segment, says Jan Freitag of hotel-tracking Smith Travel Research. But "economy properties are not losing occupancy as quickly, and rates aren't dropping as precipitously" as in other segments

The start of 2009 looks to be "tough all around," he says. "But economy properties are prepared to weather the storm a little better."

Back in the cocoon of Room 402 at the Canton Microtel, sleep comes easily on a comfortable mattress (though no Starwood Heavenly Bed) and 200-thread-count cotton/polyester sheets that are smooth (but no match for the bliss of Egyptian cotton at luxury brands).

In the morning, after the included spread of cereal, bagels, waffles, juice, yogurt and coffee in a modern breakfast room, general manager Adrienne DeMarco leads this now-unmasked reporter on a tour of Microtel's rooms for guests with disabilities.

They include door peepholes at wheelchair level, strobe lights that flash to warn hearing-impaired guests of an emergency (or that someone is at the door) and roll-in showers with handrails and seats.

Explaining a housekeeper's earlier, spontaneous "have a nice day" to this guest, DeMarco says she has "told everyone to picture yourself in their shoes and do what you would want someone to do (in that sit uation). After all, we are all people."

As budget-minded travelers trade down when booking — 81.6% are downscaling in 2009, says a just-released Travel Leaders survey of 547 travel agents — Microtel and other chains look to benefit.

"I challenge everyone in the economy segment to raise the bar," Flora says. "Let's make the segment a more attractive proposition" to travelers of all sorts.

"That helps us all."

CROWNE PLAZA NIAGARA FALLS WINS “BEST OVERALL RENOVATION” AWARD
PARENT COMPANY RECOGNIZES NIAGARA FALLS HOTEL FOR $25 MILLION TRANSFORMATION

The Crowne Plaza Niagara Falls, Western New York’s premier hotel, located minutes from the American Falls, was recognized by InterContinental Hotels Group (IHG) with the company’s 2007 “Best Overall Renovation Award” for the Crowne Plaza brand. The hotel recently completed a 25 million-dollar transformation that included all 391 guestrooms and suites, as well as the lobby, public spaces, meeting rooms, exterior facade, in-house Starbucks Café, and food and beverage outlets. The hotel was noted for its clean, contemporary design, fulfilling Crowne Plaza’s brand promise as “The Place to Meet.”

“We are extremely proud of our recognition by the InterContinental Hotels Group in receiving this award,” said Ted Torres, Asset Manager in charge of renovation for the Crowne Plaza Niagara Falls. “Our hotel is located in one of the great hospitality and tourism destinations of the world, and it is rewarding to have updated facilities, redesigned guestrooms and public spaces that reflect our commitment to provide today’s traveler with an exceptional guest experience.”

InterContinental Hotels Group Renovation Awards are given annually to select hotels that successfully completed major modernization and renovation programs during that year. The Crowne Plaza Niagara Falls received the award at IHG’s Americas Investors and Leadership Conference held in Dallas from Oct. 22-24.

Crowne Plaza was recently recognized by Lodging Hospitality Magazine as one of the industry’s top-growing upscale brands. As part of the InterContinental Hotels Group global portfolio, Crowne Plaza Hotels and Resorts has 288 hotels in 48 countries, located in major urban centers, gateway cities, and resort destinations. For further information about Crowne Plaza properties, or to make reservations, visit www.crowneplaza.com or call 1-800-2CROWNE.

CROWNE PLAZA HOTEL NIAGARA FALLS
300 Third St. Niagara Falls, NY 14303
1-800-95-FALLS

www.crowneplaza.com/niagarafalls

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