USFS CHARTS GROWTH

A record 300 general managers and franchisees from Microtel Inns & Suites, along with representatives of 80 Hawthorn Suites, attended an upbeat USFS conference and trade show in Atlanta in early April.

All signs point to continued growth in both brands, with 160 Microtels and 30 Hawthorns in the pipeline. The latter, an extended-stay product that competes with Residence Inns, Homewood Suites and Staybridge, may also swell as brand owner Hyatt uses it to absorb some AmeriSuites that won't fit with its new Hyatt Place flag.

Mike Leven, USFS president and chief executive officer, told the crowd at the Hyatt Regency Atlanta that 2005 was a “very good year” for the Hyatt-owned flags and 2006 should be even better. Not only did Microtel nab the J.D. Power economy/budget segment guest satisfaction award for the fourth year in a row, ADR rose from $48.61 to $51.78 and occupancy grew from 56.38 percent to 59.44 percent. RevPAR, meanwhile, posted a dramatic increase of nearly 11 percent, from $27.40 to $30.78. The figures prove that Microtel leads its segment, Leven said. The respective figures for Hawthorn Suites were $81.82, 68.4 percent and $55.89.

At the same time, Leven, a lodging executive of unusually deep perspective, cautioned that to preserve and enhance its position, Microtel will have to make adjustments to its breakfast offering, look into a bedding and television upgrade and gradually inject more quality into its units while maintaining its price point.

Like people, hotel chains “go through gradual deterioration,” Leven said in a separate interview. “As a young person, you can get away with a lot of things; in dog years, a hotel that is eight years old is 72.” He noted that some Microtels are 10 years old and need refreshing. If USFS doesn't address this problem now, the brand will suffer. “Microtel can't afford to lose the perception in its segment that it's safer there than in the competition.”

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