AmericInns’ Growth Strategies

Paul Kirwin didn’t have to travel far when he changed jobs last month. The 25-year-veteran of Minneapolis-based Carlson Companies left the firm earlier this year and in May joined Northcott Hospitality as president and COO. Northcott’s holdings include the 220-property AmericInn lodging chain and a string of Houlihan’s and Perkins restaurants. AmericInn’s point of difference in the limited-service segment is its SoundGuard masonry block construction technique that reduces guestroom noise.

Kirwin had been president of Carlson’s Americas division. His career with the company included stints as president of Country Inn & Suites and head of Carlson’s operations in Asia. We chatted by phone with Kirwin two weeks after he settled in to his new job at Northcott:

What drew you to Northcott and AmericInn?

It’s a private company that’s been here 50 years. I had a great experience at Carlson, where I learned to appreciate the stability and benefit of working in a private environment. Also, Northcott has a diverse portfolio in both the restaurant and hotel businesses. In lodging, we run a brand, we own hotels, we have a management company and we have a development services company.

What are the strengths of the AmericInn brand?

The brand has a strong identify and a great legacy. We use a certain style of construction that lends itself well to a quiet room, which is a key element of our marketing appeal. Our team is very committed to the brand, so I see a lot of similarities to what I had at Carlson with Country Inns and Suites. The focus now is to expand in more primary and secondary markets, and we have a good platform from which to do that.

What challenges does the brand have?

When your smaller than other brands, you lack some of the marketing firepower, brand awareness and strong loyalty programs, so you have to work a little harder and at the same time use your smaller size as a strength in terms of the ability to be nimble and find opportunities between the cracks.

In what marketing directions do you plan to take the brand?

The team’s been focused a lot on e-related marketing, which is absolutely the right approach for this brand because it’s a more efficient and focused strategy and yet there are a lot of new things you can do.

Are any changes planned for the product?

While the core design of the product has worked very well here in the upper Midwest, we may make some changes to the prototype to make it more efficient. Some of the features that are very valuable in the upper Midwest—for example, we have a large pool area in the standard property—may not be as important in other markets so we may look to tweak them a little bit.

Where are you looking to grow?

Our focus is to grow from our strengths. While we will be opportunistic to grow where we can, key focuses will be the Ohio Valley, the Southeast and the Southwest.

Will you be looking for additional franchisees or rely on your existing base for expansion?

A key priority will be to spread the net of owners. One of the things I bring to the organization is the many relationships I have in the industry, especially in the mid-tier.

Is company development in the plans?

We own a handful of hotels now, and as part of the strategic plan we will resolve exactly where we allocate our capital. I expect we will have a limited strategic corporate development focus.

Given the current lending environment, how available is financing for AmericInn projects?

For the most part, we’ve expanded in tertiary markets, where owners rely on community banks and regional banks. And some of the franchisees we’re working with have the wherewithal and the relationships to get funded. The lending crisis affected us but not as much as some other chains.

How’s the restaurant business?

When I was initially at Country we had Country Kitchens and in Asia I had involvement in TGI Fridays so I feel familiar with the product. I love the food business, and it was one of the things that appealed to me about this job.

What are the growth plans for the restaurant business?

It’s part of the strategic review and planning process. There will be cases where we can leverage our restaurant group to grow the property management business. We buy a significant amount of food, so we can bring some purchasing power benefits. In the hotel business, there are also limited, but significant opportunities to bring branded restaurants to hotels.

How does the summer look?

Art the moment, franchisees and managers are cautiously hopeful. I wouldn’t say optimistic because the downturn seems to have extended and perhaps worsened in the last 30 to 60 days, especially in the secondary markets. One of the subtle impacts we’re feeling is from the auto industry, which has been shut down for the last month and will be shut down for another month or two. The auto industry is huge and it touches so many places, including secondary and in some cases tertiary markets,


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