Posted 4/23/2012 - 8:38:48 AM
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AmericInn President/CEO Paul Kirwin
BY STEFANI C. O’CONNOR
MINNEAPOLIS, MN—Despite a slower-than-expected national economic recovery, AmericInn President/CEO Paul Kirwin delivered a wealth of good news to some 500 attendees at the lodging chain’s annual convention being held here at the Hyatt Regency, noting the midscale brand is on track with a series of strategic initiatives. They include pushing beyond the company’s traditional Midwest locations and going toe-to-toe with its competitive set with a contemporary prototype that will define AmericInn into the future.
Set against a conference theme that urged attendees to “Be Brilliant Together,” Kirwin told the group of hotel owners, managers, franchisees and corporate employees that there was “significant progress on our three key objectives of new unit growth, increased revenue and hotel upgrades through renovation and investment.”
The Chanhassen, MN-based franchisor opened seven new hotels in 2011 and inked agreements for 10 properties.
“That’s double what we did the year before and three times what we did the year before that,” said Kirwin.
All of the opened properties were conversions, which, the CEO acknowledged, still rankles somewhat with some AmericInn owners who point to the chain’s traditional new construction model and trademarked SoundGuard construction as brand differentiators. (In 2010, the company decided to revisit its business model as a new-build-only franchisor and began accepting select conversion opportunities.)
“Hopefully, [attendees] will take some reassurance that the average expenditure for our conversions over that last two years was $475,000. All of those conversions are held to the same brand standards that our existing hotels are held to,” he said. “We could have had a lot more hotels if we didn’t have the requirements that we do but we’re fully committed to ensuring that we achieve the objective of quality and consistency and we can’t do that if we’re bringing in hotels that are well behind the standards. These hotels have added valuable brand presence and awareness, so I continue to believe this is the right strategy for us.”
Kirwin said less than 10 percent of the brand has been added via conversions.
The chain currently has more than 260 properties open or under development in 27 states, including two properties in Iowa, one in Fairfield that opened in March and the first to use the new prototype, in this case using masonry and wood construction; the other, in Osage, is expected to open in June and is using all-wood construction. The new-construction pair was developed by veteran franchisee, Apollo Development, LLC, of Minnetonka, MN.
“One of the things that was key to the new prototypical design was to give developers more flexibility around the structural system as they get back into the new-construction game,” said Kirwin. “A lot of time the market you’re going to build in can have real bearing on whether all-masonry makes sense, whether traditional SoundGuard makes sense, whether a combination, or all-wood.”
The CEO said a three-year PIP program, known as “AmericInn Refresh” and which encompasses approximately 80 percent of the brand, was advancing, representing a $75 million investment by the company to keep AmericInn competitive “with a key objective of getting our hotels updated and more current to design standards of today,” said Kirwin.
AmericInn also achieved strong revenue growth.
“Brand revenue was up seven percent to $192 million,” said Kirwin. “Average hotel RevPAR was up five percent…and we’re out of the gate pretty strong in the first quarter of 2012.”
He added 40 hotels in the chain had RevPAR increases of 10 percent or more.
CRS revenue was up 10 percent as well, with 30 percent of brand revenues coming through the brand channel. “That’s a positive sign the brand has a lot of traction with consumers,” said Kirwin, noting AmericInn.com contributed 13 percent and the recently retooled Easy Rewards program generated 25 percent of brand room nights.
