Yes, the growing number of business travellers who are away on extended stays not a couple of days but a week or more live very comfortably, as if they are in their own apartments, but with hotel services, at well-known brands like Residence Inn by Marriott, Homewood Suites by Hilton and Candlewood Suites from InterContinental.
But there is a whole other, rapidly growing segment of business traveller who is usually on his or her own dime or on a strict per diem limit, and is unable or unwilling to pay the $800 or more a week that a midlevel extended-stay hotel charges. At the same time, that traveller is not especially happy about taking a chance on a cheap No Tell Motel with questionable standards of cleanliness and safety.
This is where Jack DeBoer, who is known as the father of the extended-stay hotel concept, has decided his next market lies. DeBoer developed the Residence Inn brand in 1975 and later sold it to Marriott. He also founded Candlewood and sold that to InterContinental in 2003. That is when he started a new kind of extended-stay hotel, Value Place. It is a fast growing company aimed at delivering low prices, guaranteed cleanliness and safety, and a consistent brand experience from one hotel to the next.
In the lower-priced segment, if we can be extraordinarily cost conscious and believe me, we handle nickels here like theyre manhole covers then we can make a difference, once we have customer awareness, he said. DeBoer claims he is operating in a niche where standards of cleanliness and even safety, he claims, can become slack under intense pricing competition. As a generality, our competition is a 50-year-old motel with exterior entrances and two cars with at least one flat tire each in the parking lot, he said.
Value Place has expanded rapidly, with 500 new franchise commitments in the last two years. The company, which sells franchises to hotel owners who are held to strict brand standards, expects to have about 50 hotels open by the end of this year. About 25 are now open. Business travellers, who typically arrive by car, make up more than half of the companys customers, and DeBoer expects that percentage to grow. Our customer is a little different from someone who stays at a Residence Inn, he said.
For the most part, they are people paying their own way, or on tight budgets like employees on training sessions for a week, and thats all the business travel they ever do. Then there are the continual travellers. Contractors building a Wal-Mart or cleaning a refinery. There is a large and growing pool of mobile labor out there often making very good money, but working within their own budgets.
A room at a Value Place hotel costs $159 to $249 a week, depending on location. That is below the average rates at most economy-niche hotels. DeBoer says his hotels have average occupancy rates above 90%. Rooms are rented only by the week. DeBoer said he rode his franchisees hard on cleanliness and always has inspectors on the road checking up. Each hotel room has a double bed, cable television, a kitchen with a full-size refrigerator and a stovetop and microwave. All doors have electronic locks and open into interior corridors. Each hotel operates with four and one-half full-time employees, compared with 17-20 at midlevel extended-stay hotels.
How do the rooms get made up with so few people Well, they dont, actually. Free housekeeping service is provided every 14 days, or upon checkout. Guests can come to the front desk at any time for fresh towels or sheets and pillowcases, but after that, they are on their own.
NY Times / Joe Sharkey