Economy Tier Targets Expansion, Consistency
<B> Economy Tier Targets Expansion, Consistency</B>
By Maria P. Vallejo
Some of the hotels ranked in the top five positions of the economy segment targeted development last year, while others overcame negative perceptions to forge ahead.
First-place winner Hampton Inns usurped the number-one position from last year's winner, Fairfield Inns. The Promus hotel brand added 106 hotels in 1997, bringing its total to 726 properties.
"Hampton is making a slightly larger investment in the product than Fairfield," said Ted Mandigo of Chicago-based T.R. Mandigo & Co. "Their hotels tend to show better from a quality standpoint."
Fairfield Inns moved to second place, a rank it shared with Holiday Inn Express. Fairfield Inns, established in October 1987, has more than 300 properties nationwide.
Holiday Inn Express expanded its portfolio last year primarily through new construction, while removing properties that did not live up to its standards. "They've taken out any weak links and they're pretty new in nature," said Craig Hunt, Holiday Inn president. "Customers prefer new."
Ramada Inn and Days Inn of America drew a lot of attention from analysts because of their improved rankings over last year. "Those brands had a perception of lack of consistency and they're overcoming that," said Robert Mandelbaum, research director for PKF Consulting in New York.
Days Inn has terminated contracts with about 150 hotels since 1996. It now has 1,800 hotels, about 40 percent from new constructions, and is expanding into Asia. "We want to grow abroad as well as domestically," said president Joe Kane. "But if property owners refuse to improve their product, we're not going to have a lot of patience."
Some analysts, though, were skeptical of the impact of the expansion plan. "I'm surprised Days Inn is still as high as it is because it's not getting the new product, but renovating the old product instead," said Scott Brush of Miami-based Brush & Co.
Days Inn also expanded its "Days Business Place" program. Qualifying hotels must convert 10 percent of guest rooms to corporate rooms, including dataports, coffee makers, irons and snack packs.