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IHG to bring 28 ex-stay hotels to Houston

Sunday June 21st, 2009 - 1:42PM

HOUSTON—IHG clearly has no problem with Houston—at least not when it comes to extended-stay hotels. The company plans to add 28 new Staybridge Suites and Candlewood Suites properties totaling approximately 2,400 rooms to the Houston market over the next several years.
According to Robert Radomski, vp of global brand management of extended-stay brands for IHG, there are several distinct factors contributing to the company’s sudden lure to the Houston market. “Houston is a significant location with numerous demand generators. In addition to the growing population of the area, in terms of business it has almost everything—from Fortune 500 companies, to aerospace, military, education and medical centers. And all of those things point to an increased need for extended-stay product,” he said.
In terms of extended stay, IHG does already have an established presence in the Houston area with 10 Candlewood Suites properties and four Staybridge Suites open. Radomski noted it is the success of those hotels and the continued development of the city that is spurring the additional development. “It comes down to a matter of recognizing continued opportunity. We are planning to triple the size of our distribution in Houston over the next three years to catch up with all of the market opportunities there,” he said. “This is the result of years of effort on our part. We already have traction in the market, now we’re building on it.”
The breakdown of IHG’s extended-stay pipeline for Houston currently includes 19 Candlewood Suites, and nine Staybridge Suites. While a number of hotels are slated for the city of Houston itself, plans also encompass surrounding suburbs such as Deer Park, Richmond, Pearland, Pasadena, Sugar Land, Katy and Conroe.
“We felt it was the optimal plan to have a mix of Houston and suburban hotels; it’s a very large metropolis and certain markets are underserved by extended stay,” Radomski said, adding all of the planned Candlewoods will feature the brand’s new design prototype, which includes an upgraded exterior and an enlarged reception area and gathering space.
Meanwhile, the new Staybridge hotels will include the brand’s new outdoor living space that features a gazebo, bar and courtyard.
Radomski did acknowledge that even with the strong performance of the Houston area, current market conditions are presenting a few obstacles. “Of the 28 properties, at this point the plan is for the majority of them to open in the back half of the three-year time period we’ve blocked off. The bottom line is there are just not a lot of hotel starts right now. There are a lot of development challenges so our schedule has to be fluid,” he explained. “What is also a challenge is finding the right sites. Over the last several years, land has been much harder to come by. We’re working closely with developers to pinpoint the correct locations and that takes time.”
Ground has already been broken on “half a dozen” of the planned hotels and the remainder are in their respective brands’ active pipelines. “There are many still in the preparation stages, dealing with permit, site and design issues,” Radomski reported, adding he does not feel that Houston is at risk for over-saturation of extended-stay product. “All the hotel companies are playing the same game; we are all looking to grow. In the case of Houston, the location is very unique. It’s very spread out compared to being centralized around a ‘downtown’ area like many cities. Between the many industries, there are a lot of pockets of demand. And the prevalence of the medical, oil and gas industries is ideal for the extended-stay segment. There is enough extended-stay demand to go around.” 

—Lauren Esposito