All-Suite Brands Grow With Competition

<B> All-Suite Brands Grow With Competition</B>

By Lynn Woods

Confused by which extended-stay brands are which? You're not alone. The survival of more than two dozen barely distinguishable brands--where the prevalence of the words "home," "wood" and "field" in their names doesn't help--was called into question with the recent disappearance of Homegate Studios and Suites, launched just two years ago. Two months ago, parent company Prime Hospitality Corp. decided to fold the 37 Homegate properties into its Wellesley Inns brand, which will be renamed Wellesley Inns and Suites.

Insiders said the intense competition in some markets is causing many extended-stay firms to better define their brands to gain national name recognition. And still, many predicted a round of mergers and consolidations in the coming months.

"Companies like Extended Stay America that are trying to get national awareness and working on their marketing positioning are on the right track," said Cristina Ampil, senior lodging economist at PricewaterhouseCoopers.

"Some of the newer brands are terrific and superior to the older stuff that's been around for 10 years," added Gregory Hartmann, managing director at HVS International, a hotel consultancy in Boulder, Colo. "It's very important for them to become well known."

Among those that are succeeding are Extended Stay America and Residence Inn, he said. "Homewood Suites is getting there," while "it's a bit harder for Homestead Villages and Studio Plus."

John Leavitt, senior vice president of marketing at Homegate's sister brand AmeriSuites, said the company "made the decision to move out of the all-suite sector because we don't think the market is that deep, and high-end brands like Residence Inn own the market. As a midprice hotel, we were getting squeezed both from the top and bottom, because there are so many low-end brands.

More consolidation will occur, predicted Daniel Lesser, senior director of the hospitality industry group at Cushman Wakefield in New York. "A lot of these properties consist of large guest rooms with kitchens. They could easily slap a new brand on the chain and make it a transient hotel," he noted.

One of the challenges in establishing brand recognition for all-suites is that much of the new business is generated on the local level. "Unlike transient travelers using traditional hotels, who call an 800 number, travelers staying for a week or more are coming to that hotel because of a local connection," Hartmann said. "That connection makes the deal, which explains why there are no strong brands."

Nonetheless, as extended-stay brands proliferate across the country and the mass of product makes contracts with large companies more feasible, many hotel firms are trying to build national awareness. Establishing a recognizable brand is also the best way to capture more of the pent-up demand from travelers who might be better served in an all-suite hotel but stay in traditional hotels because they are familiar with the brands.

"The typical business traveler doesn't think in terms of extended-stay," said Doug McCorkle, vice president and brand manager for Homewood Suites, based in Memphis. "They tend to go with brands they know, so they go to a traditional hotel because they don't know about Homewood."

McCorkle noted that Homewood Suites has benefited from the recent merger with Promus Hotel Corp. in that it is supported by a national sales organization, which it didn't have before. At the same time, "we strongly encourage individual hotels to know the marketplace, both in terms of companies and corporate travel agents," he said.

Atlanta-based Suburban Lodges of America Inc., which has 104 limited-service studio hotels, also is trying to build national awareness. It has started advertising for the first time in its 11-year history, and within the next three months will be accessible through the global distribution systems. It also will add booking capabilities to its Web site within the next month, has joined the National Business Travel Association in an effort to woo corporations and has been loaded into the Federal Directory to get more government business.

A marketing program targeting the corporate sector also is being implemented at Hawthorne Suites, an upper tier chain of extended-stay properties, and its midmarket extension, Hawthorne Suites Ltd., both franchised by U.S. Franchise Systems Inc. "We have a commitment to a national sales office, and want to get in front of Fortune 500 companies," said Steve Hymans, vice president and brand manager.

In some cases, marketing the brand also means refocusing the product itself. To distinguish its product from the mass of lower-price extended-stay properties, The Marcus Corp. this year has invested $20 million in upgrading and revamping its 163 Budgetel properties under the new Baymont Inns & Suites name. The change entailed converting a number of rooms to two-bedroom suites and adding such amenities as free breakfast in the lobby, complimentary newspaper, and in-room iron and ironing board.

"We offer an amenity package comparable to Hampton Inns at a price point below," said interim COO Greg Marcus, noting that the brand is positioned at the low end of the midprice segment.

The Marcus Corp. also operates Woodfield Suites, an upper tier brand whose sixth property just opened in Chicago. Another hotel will open later this year in San Antonio, Texas. With an average stay of 1.8 nights, Woodfield Suites, located mainly in the Midwest, feature one- and two-bedroom suites, with free cocktails, continental breakfast and club rooms.

Since being acquired by Wyndham last June, Summerfield Suites has "enhanced its distribution and become bookable via the Internet," said spokesperson Cheryl Doll. The firm is opening three new properties this year--at Miami airport, in Harrison, N.Y., and in Plymouth Meeting, Pa.--which will bring the grand total to 36 hotels.

Pete Jordan, vice president and brand manager for Choice Hotel International's Quality Inns & Suites, based in Silver Springs, Md., said that brand also has been upgraded to attract more business travelers. Boardrooms have been added, the suites widened to create more space and comfort, and the lighting and seating improved. There currently are 40 Quality Suites properties.

Comfort Suites also has embarked on a new campaign to distinguish itself. "With 200 properties, we are our own brand," said Dan Shoen, Quality's vice president and brand manager. With an average rate of $70 a night, Comfort is in a slightly lower tier than Quality, which has an average rate of $85.

The two brands also benefit from their participation in Guest Privileges, the frequent guest program launched by Choice last October. The program now has 300,000 members.

Another all-suite brand using a guest loyalty program to help build name recognition is Prime Hospitality Corp.'s AmeriSuites. John Leavitt said awareness of the brand increased from 13 percent in 1997 to 25 percent in 1998, thanks in part to the AmeriSuites Club frequent guest program.

Another brand-builder is Ameri-Suites' National Volume Corporate rate program, which awards discounted rates to companies generating 500 room nights or more. But in general, insiders said, value is a strong selling point of all extended-stay hotels. "All-suites are perceived as providing good value for the price," Ampil said.

That dovetails with the continuing fiscal consciousness of Corporate America. "Companies are much more price conscious," said Rosenbluth International spokesperson Jenifer Meyer. "With all-suites and extended-stay, you get one rate per week, which gets better the longer you stay. If you stay more than 30 days, there's no tax. And you also save on food and beverage costs, since there's no room service.