Kirwin Leads AmericInn in New Direction
When Paul Kirwin strode confidently to the stage earlier this week to open the AmericInn conference, it was reminiscent of his last with Carlson. He climbed onto stage at both events with a video skit playing in the background, but at this year’s event, he was speaking to hundreds of people at the Golden Nugget in Las Vegas. Two years ago, he was speaking to thousands at the Bellagio.
The man who built the Country Inns & Suites brand for the big Minnesota-based hotel company is being asked to do it again, this time with smaller, yet similar AmericInn, a midscale brand really only known in the Upper Midwest. The new Northcott Hospitality CEO is in a familiar position, with another family-owned company based outside the Twin Cities. Kirwin was hired last May and took over as CEO for AmericInn’s parent company in January.
The chief executive officer wasn’t the only change on display at the Golden Nugget. The brand altered its goals, aiming to get “bigger and better,” Kirwin told the crowd of approximately 500 at the opening general session. AmericInn has changed its development strategy, based entirely on all new construction to this point, to one of aggressive growth through targeted conversions. Kirwin has added a new executive vice president of development in Choice veteran Ron Burgett, who has been tasked with growing the brand by 10 percent or more each year.
The brand’s image and messaging, from oversized rooms and pools to the AmericInn SoundGuard Construction methods, are evolving to allow conversions, a radical departure from the company’s past. A new prototype will soon be unveiled that will reduce the sizes of the lobby and guestrooms to create seven more rooms in the same size footprint (price-per-key will be between $60,000 and $70,000). The new design will be modern and the more expensive SoundGuard Construction methods using masonry block filled with sound-softening foam won’t be a staple anymore, instead the focus will be on smaller (and cheaper) quiet design touches like rubber-covered door locks.
Even the location of the conference was different. AmericInn has traditionally held its annual event in the Midwest near its headquarters, but Kirwin wants the brand to think, and act, bigger. With more than 220 properties open now, the goals are to add 20 locations this year, 25 next and 30 in 2012.
Burgett admits the brand has some catching up to do; its recent high of 16 added locations in 2006 was the last year the brand hit double digits. He introduced his new regional franchise sales team during the opening session, which was a mix of AmericInn veterans and his former colleagues at Choice. He says the bulk of the new locations will come via conversion this year, but the new prototype will be available in June to be ready for the next wave of new construction.
“The world has changed, building the best hotel model isn’t enough to survive anymore,” Burgett said during an interview. “We have to be ready with a more developer friendly program. We’ll target high-quality assets across the country (Holiday Inn Express, Hampton Inn, Baymont, Comfort Inn and Country Inns & Suites, he specified). We know everyone is proud of the brand and that will not change. We will ensure these hotels meet tough standards, but we’ll have a streamlined conversion process to make it easier.”
Burgett told the audience at the opening session these new locations would not be in their backyard. “We have a lot of room to grow, a lot of open markets,” he said. The vast majority of AmericInn’s portfolio is located in Minnesota, Wisconsin, Iowa, the Dakotas and northern Illinois.
AmericInn is also tightening its standards for current franchisees. A new quality assurance and property improvement plan process will be introduced this year. “We’ll remain franchise friendly, but we’ll expect everyone to comply with our standards,” Kirwin said, adding that would apply to the five company-owned locations, which could grow in number as Northcott Hospitality looks to buy (and convert) or build a few more hotels. “I told our board let’s use our balance sheet to grow the brand as opposed to being a cash-flow generator.” Northcott recently sold one of its Minnesota properties to an existing franchisee with a 10-year franchise agreement and will look to spend the proceeds on more hotels it could turn over to franchisees in two to four years, Kirwin said.
Although AmericInn is becoming more modern with its prototype, messaging and development strategies, it is not forgetting its heritage. The brand will continue to offer a lodge-like prototype with a larger lobby and pool. The marketing message will continue to promote the quieter features, but not as prominently, instead focusing on the idea of the brand as “America’s welcoming neighbor.”
“Quiet is a feature of the brand today and we don’t want to lose it,” Kirwin said during an interview at the conference. “The message will be more about personality, the brand and other benefits that drive people’s preferences.”
AmericInn will also change its fee structure next year, from a pay-for-performance model Kirwin called “no longer viable” to the more typical model assessing distribution and reservation fees as a percentage of hotel revenue. The brand earlier this year converted its antiquated paper loyalty program to an electronic one.
Kirwin admits all these changes are a dramatic shift from the brand’ past, but he says franchisees want AmericInn to grow and they understand what it will take. “They want it done in a way that’s sensitive to the heritage and culture of the brand,” he said. “That’s what we heard over and over. I think two things have given them comfort: My heritage with Carlson and Comfort Inns & Suites; I’m not in this to do it in a trashy way. And Ron’s heritage at Choice is as a guy who knows how to grow good, quality brands.”
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