Extended Stay America Taps Vet

<B>Extended Stay America Taps Vet</B>

By Bruce Serlen

Extended Stay America Inc. last month chose veteran Robert Brannon as its president and COO. Brannon, who had been CFO of the extended-stay chain, replaces Jay Witzel, who now is president and COO of Radisson Hotels Worldwide.

Brannon has been with Extended Stay America since its founding in 1995. "We've been true to the basic concept since that time--to provide longer-term accommodations at reasonable cost," he said. "That's our value proposition and I fully expect it to continue. In short, we don't offer five-star amenities, but we also don't charge five-star rates."

The company is comprised of three brands--StudioPlus Deluxe Suites and Crossland Economy Studios, in addition to the Extended StayAmerica Efficiency Studios. But Brannon expects development in the future to focus on the Extended StayAmerica brand. Of the 372 facilities now open, 242 are Extended StayAmericas. An additional 18 are under construction.

"At this point, it makes sense to concentrate on the brand with the most flags," he said. This year, $250 million has been earmarked for development across all the brands.

The development focus for the Fort Lauderdale, Fla.-based chain will be in the northeast and western regions. Such areas as San Francisco and Los Angeles particularly have been hard for the chain to penetrate because of high barriers to entry, such as land acquisition costs and zoning.

"From the beginning, our strategy has been to have a rapid national rollout because we wanted to quickly demonstrate that we were a market leader," said Brannon. "We're already in 38 states."

The company has no plans at present to enter markets outside of the United States. "Our sense is that there is still considerable untapped demand for extended-stay accommodations right here in both the business and leisure markets," he said.

While Extended Stay America is eager to work with travel buyers, it doesn't negotiate special corporate rates. "That's been the policy from the onset," he said. "We feel we provide a value rate for all customers and that our rates are already on par with our competitors' negotiated rates."

The policy isn't likely to change under Brannon's watch: "I never say never, but I'm a firm believer in a consistent price structure.