LAS VEGAS—Like the dice thrown in this take-a-chance town, AmericInn proved it was still on a profitable roll for hundreds of GMs and owners at the midscale lodging chain’s annual convention held here last month at Bally’s.
Paul Kirwin, president and CEO of AmericInn and parent Northcott Hospitality, said the Chanhassen, MN-based company posted record-breaking numbers in 2014 across some key metrics, continuing a pattern AmericInn has been demonstrating for several years.
“It was a good year; a good year, indeed. System-wide revenue was at an all-time high of $211 million and RevPAR reached over $50 for the first time in our history,” said Kirwin. “So, our brand is serving more guests than ever before, and our hotels are more profitable than ever before—both great indicators for the health of our brand.”
Kirwin added more than 50% of the system-wide revenue is coming from brand channels, e.g., the CRS and its Easy Rewards loyalty program.
“Of those channels, we place increasing priority on AmericInn.com, since it provides your most profitable room nights,” Kirwin told the crowd, noting the site’s contribution rose to 13% of revenue, with more than four million visitors to the website in the year.
Most important, said Mark Masuda, VP of sales, marketing and distribution, “Our revenue has grown to more than $26 million in dotcom-brand growth.”
He emphasized the channel is the least cost to franchisees. “It doesn’t take any resources from [the]hotel and, increasingly, for Millennials—and everybody—this is how they want to transact. This is how they want to interact, to make their purchase decisions; it’s online.”
Masuda added, “More than 40% of AmericInn.com’s traffic now comes from mobile devices,” and said the chain would invest in enhancing its smartphone booking app. “It’s going to be easy to read, easier to navigate, easier to book. We’re going to show pricing up front, and we’re going to show TripAdvisor reviews.” The enhancements would be launched before summer, he said.
Contribution by Easy Rewards rose to 32%, another all-time high for the system, noted Kirwin.
“Easy Rewards continues to grow and add value to our brand,” said Masuda. “More than a third of our guests are now Easy Rewards members. That is truly amazing for a program that is less than five years old.”
AmericInn this year is creating a tier within the program to recognize its “best” guests. Dubbed Easy Rewards Elite, card-carrying members who stay a requisite number of nights will be thanked and recognized at check-in and receive a welcome bag containing bottled water, a sweet snack and a salty snack. The cost to owners for the contents will come in under $1, said Masuda, who added the products could be purchased at a Sam’s Club or Wal-Mart. Paper bags with the AmericInn logo and Easy Rewards Elite on them would be provided to properties by AmericInn.
“We want to make them feel special, that they’re appreciated by us at AmericInn. We want other people to aspire to become Easy Rewards Elite members,” said the VP.
That said, at the suggestion of AmericInn franchisee Mike Sias, the chain developed a system whereby guests who have provided an email address will received a triggered email asking them to sign up for Easy Rewards.
The chain’s STR market-share index also rose to 109 indicating “we are continuing to outperform the midscale segment,” said Kirwin. He added the Market Metrix overall satisfaction score for the brand hit 92%, with a Very Likely to Recommend score of 75%.
“These scores are a testimony to the commitment of our hotel owners, who continue to invest in our brand with new hotels, upgraded operating standards and PIPs, all to the tune of over $20 million last year,” said the CEO.
AmericInn has been citing properties open or under development between 200 and 240 for the past several years and, in 2013, initiated a sea change in welcoming conversions to its historically new-construction-only business model.
In describing the pace of growth, Nasir Raja, EVP of franchise development and operations, said the franchisor “is being aggressive, but not reckless. We have to focus on quality. We have just asked our franchisees to put a lot of money into their properties, and we committed to them that we will be a consistent, midscale product. If I start bringing in just any conversion with low or minimal PIPs, it would create that inconsistency that we’ve tried to fix. It doesn’t bind us. It just narrows us in where we go and what we accept.”
To better understand where customers are coming from, the lodging chain has created a “heat map” for each property that visually displays feeder markets.
“Our customers make reservations, and we track where they reside for as many of them as we can get. We do that down to the property level and the transaction level,” said Masuda. The 2014 data was turned over to research firm D.K. Shifflet & Associates, which created color-coded maps that use various tones of red to indicate the degree of customer concentration for a particular area.
“It really helps us from a strategic standpoint when we’re planning our marketing programs and marketing spend, i.e., which radio stations? Where do we want to put billboards? We utilize that data to help us make effective marketing decisions,” said the VP.
While Kirwin lauded attendees for the banner year, he stressed this was no time to rest on laurels.
“With gas prices and interest rates low and jobs and employment high, we have the makings of a fantastic year for the travel and tourism industry. We are poised for another good year at AmericInn but, hopefully, we won’t settle for good in 2015. Instead, we need to set our sights on making 2015 a truly great year, one that sets all new records for performance and profits,” he said.
One way to make that happen is for owners to take a more-aggressive pricing approach to help lift rates, particularly during peak demand times, Kirwin suggested.
Toward this, Masuda said the company looked at system-wide “full” nights for last year and, on average, there were 25 nights in each hotel, representing approximately 5,000 nights. The VP encouraged each owner to review his/her books for 2014 and, for each full night, raise the rate this year by at least $7. “If we all do this, we’ll bring in over $2 million more in revenue that will drop straight to your bottom line,” said Masuda.
He added the company also has been concentrating on lifting its corporate business and adding new accounts, including Hobby Lobby and Xerox, adding to existing business from 3M, John Deere and Caterpillar, among others.
“In 2014, we were able to bring in over $8 million—for the first time—in corporate revenue,” said Masuda.
In addition, AmericInn’s “AforB” (AmericInn for Business) program for small- to medium-size corporate accounts saw a 50% growth, he said.
“Getting customers to your doors is half the battle in our business. Winning their hearts and minds with great product and service is the other half. And, in that regard, we can never rest,” he said.
And, the company doesn’t intend to. Rather, it intends to leverage off the success of 2014’s Adrian award-winning Random Acts of Vacation contest that awarded free nights at any of the 200-plus AmericInns in 24 states to persons deemed deserving, who were culled from 3,000 online nominations.
This year, it’s launching The Great AmericInn Adventure, a summer promotion aimed at engaging travelers at the local level of their stays in an interactive format, coupled with people’s penchant for taking pictures, and executed via technology. AmericInn wants travelers to post selfies and other photos from their travels, particularly any of the weird and odd sites and/or attractions they encounter, such as “The Tree That Owns Itself,” or from their hotel experience. The images will live on AmericInn.com, with guests eligible for a free night’s stay as part of a contest whereby AmericInn will select “the best of the best over the 99 days of summer,” said Masuda.
As part of the promotion, an interactive map will feature a star for each AmericInn. Clicking on it will show “all the wild, wacky, wonderful and unique things in the hotel’s specific community,” said the VP. Information about the attraction, as well as distance to the nearest AmericInn, will be featured, and customers can book at the site.
A third component calls for guests to create digital postcards using their photos and the chain’s customized postcard that touts the brand, and email them to friends and relatives.
Masuda noted it was important for the brand to create an “emotional connection” with guests and potential guests. “When we’re messaging to customers, how do we get to them? How do we differentiate who we are? We do it by creating clean, easy messages. We’re trying to put more people into our ads: people having fun. Family. Fresh. We want to create an emotional connection. The best brands do this. Think about Disney, think about Coca-Cola, think about Starbucks with a bit of an attitude… Once you create an emotional connection with a consumer, then all they need to do is rationalize the purchase because you’re in the selection set,” he said.
And, despite trying to figure out what Millennials want, the impact of ever-changing technology and the continuing emergence of more hotel brands, Kirwin indicated the company, overall, has the advantage of doing business in “pretty good” economic times. “So, this is the time in which we have to be thinking and learning together how we adapt and evolve AmericInn in a way that we are a viable, valuable hotel product into the future… What we’re going to have to do three to five years from now could be dramatically different in one way or another, and we have to be prepared to make that investment.” HB