“We won’t tell you your baby is ugly”

BALTIMORE — The hospitality industry is at an inflection point emerging from the COVID-19 pandemic, with executives at major hospitality brand companies keen to grow their portfolios through mergers and acquisitions, including deals that would shift smaller brands to wallets.

Hihotels, a chain of hotels and motels across the United States under five brands in the budget and economy segment, has attracted some interest from these big players, according to Chris Guimbellot, president and CEO of Hospitality. International.

But Guimbellot is clear about those prospects: “We’re just not for sale.”

“I was approached by five people last year [inquiring about an acquisition]”, he said in an interview with Hotel News Now at the recent Asian American Hotel Owners Association conference in Baltimore. “We are a small organization, but we have an incredible team and I love working with them. them. I didn’t even have sales conversations.”

Instead, hihotels is also able to grow its portfolio of nearly 250 hotels that stretches from New Hampshire to Minnesota and all the way to Texas, with a handful of properties on the west coast of Oregon, from California and Nevada.

“We’re in great financial shape and we’ll only grow from here. Interestingly, a lot of that consolidation was because things were easy to pick up. When the economy goes down south, that’s when the people with the money come in, and it makes sense for them to do it, but we’re just not interested,” Guimbellot said.

The company’s hotels are booming, as well as the budget and budget hotel segment in general, because their core customers have never really stopped traveling, he said.

“One of the things I’ve noticed during COVID is flight stops, but not all travel has stopped. Construction has never even come close to stopping. These guys there were always traveling and always looking for places to stay,” he said.

“Also, exterior corridor properties have kind of become trendy, due to quarantine restrictions and people worried about just being indoors with others. When you have an exterior corridor property, you don’t have to worry about those things. . . . A lot of our properties — and especially in places like Texas, Florida, where they’re really building — have done very well.”

The clearest path for growing the company’s brand portfolio is through the conversion of existing properties, and Guimbellot’s sales pitch to these hotel owners is simple.

“Think about this: you buy a hotel, usually with family money that’s been pooled by family members. You borrow a bunch more, buy a hotel, it’s now your life. And then a mark comes along and tells you your baby is ugly. . It’s demoralizing. ‘And oh, by the way, your baby won’t be so ugly if you spend $3.5 million on this [property improvement plan].’ We don’t tell them their baby is ugly,” he said.

“We have brand standards, but at the end of the day, our brand standards are not that onerous, and they will have to spend $3.5 million to come on board with us. is no PIP at all. And if it is, it’s minor. Naturally, you have safety and security standards that you absolutely cannot compromise on. But the bottom line is that if they provide a quality experience for their guests, we will most likely accept them.”

He said the company had a lot of experience dealing with generational changes in hotel ownership.

“It’s interesting because you had generation one, generation two, and in some cases you’re now in generation three. … Obviously when the younger generation comes in, they have different standards, they have different different expectations. of a cigar box and things like that. We really need to be able to accommodate those guys as well. And we have the staff expertise to do that,” he said.

“Maybe your people didn’t care about reputation management, but you get it because you leave restaurant reviews and read them too,” he added, noting that Across the hihotels portfolio, there are “varying levels of technological savvy and operational efficiency…and the fun part is meeting those needs.”

Of the company’s five hotel brands, the fastest growing are Scottish Inns & Suites and Red Carpet Inn – and both have been around for more than 60 years, Guimbellot said.

Red Carpet Inn, which has historically had the largest presence in the Northeastern United States, is “at the high end of the economy segment,” he said. “There is going to be a continental breakfast and some small accessories.”

Scottish Inns is a regular budget brand, with locations mostly centered in the South East.

“It’s grown in the Northeast for the past few years, but it’s exploded in Texas; there’s probably 50 in Texas at this point,” he said. “The economy segment of Texas is becoming gangbuster, and we’ve hit a good saturation point in Texas. What I’d like to see is branch out from there and start developing Scottish more. “

The company’s other three brands in the economy segment are Passport Inn, Downtowner Inns and Master Hosts Inns, with properties closer to cities and town centers.

Linking the five brands, a guest loyalty program, the INNcentive Card, offers benefits such as a 15% discount on reservations and early check-in and late check-out. Guimbellot said developing and refining the loyalty program is a priority for the company.

“The types of guests who stay at our economy segment hotels want instant rewards,” he said. “So we partnered with a company called Access Development and as a member of our incentive program you can get discounts at restaurants you go to on your trip, theme parks, attractions, etc. “

He added that the benefits of the loyalty program do not add costs for hotel owners, “so it’s a win for customers, it’s a win for franchisees and it will be a win for members. “.

“One of the biggest challenges or opportunities is convincing and working with owners and letting them know that this is a benefit for the whole chain. If you can make references to other hotels, if you can find out where guests are going next, make a reservation for them, if you can enroll them in the program that benefits the system as a whole…it’s an education game, but it’s It’s a game I think we can tackle,” he said.

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