Settle Inn, Guesthouse Grow

Settle Inn and its sister brand, GuestHouse International, are quietly on the move. Both chains (South Dakota-based Settle Inns purchased GuestHouse and the temporarily dormant Shoney's Inns in late 2006) are in a growth spurt with eight properties under construction and more on the way. Six of the new-builds are GuestHouse properties and two are Settle Inns.

The brand company has worked hard in the past year culling substandard properties from its system while improving overall quality to a point where Smith Travel Research recently elevated GuestHouse from an economy brand to the midscale segment. Eight properties left the system immediately after the sale and 10 more surrendered their flags in the past 12 months.

“Existing franchisees told us that if we improve the overall quality of the brand they would add more properties to the system,” says Brendan Watters, president and CEO. “We did and they responded by bringing in new hotels, including a surprising number of new builds.”

Another factor in the system's success is the company's franchise-friendly philosophy. Its franchise agreement, with liberal terms and low fees, won a near-perfect score in fair franchising from the American Association of Franchisees and Dealers.

“We're entrepreneurial and flexible,” says Watters. “We always think as an owner would, and while we'll work with franchisees and be as flexible as possible we have a limited tolerance level. We're not a dumping ground.”

The company's principals took another important step in early 2007 with the purchase of the InnLink reservations system, which services nearly 1,300 properties, including the Settle Inn and GuestHouse brands. In April, the Asian American Hotel Owners Association tapped InnLink as its preferred provider for central reservations services.

According to Watters, an updated InnLink res system will roll out by the end of the year, with an online PMS offering not far behind.

Meanwhile, the fate of its economy Shoney's Inn brand is in limbo. The company is tied up in litigation over the trademark. The case is due in court in November.

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