Hotel & Motel Management - October 6, 2008 - (Page 56)

56 News H&MM October 6, 2008 | HotelMotel.com NYLO brands expand Continued from page 4 XP by NYLO and hired a director of franchising who announced aggressive plans to have 50 franchised branded properties open in less than three years. Granted, NYLO CEO John Russell was no rookie. He has worn many hats throughout his career in the hospitality industry, including marketing, operations, franchise sales and management. He was vice chairman of travel services for Cendant Corp., president of Days Inn of America, GM of the Resort at Squaw Creek in Lake Tahoe, Calif., EVP of Radisson Resorts and chairman of the American Hotel & Lodging Assn., to name a few. Then Russell saw a niche market in the hospitality industry that Russell wasn’t being targeted. NYLO “There’s a big void between Courtyard by Marriott, Hilton Garden Inn and a full-service Marriott,” Russell said. “These are lifestyle hotels. This is a whole new lifestyle segment and it’s not going to go away. “People wanted something different and they wanted it at a price point that was attractive,” he said. Russell doesn’t take credit for creating the so-called lifestyle brand. He knows Starwood Hotels & Resorts Worldwide launched aloft and Element—limited-service versions of the W Hotels and Westin brands—around the same time. And Choice Hotels International has gone after the “trendy traveler” with Cambria Suites. But he recognized the unique situation in that a new segment was being created. “Courtyard was the king of what they do. Embassy Suites was the king of the all-suite hotels,” Russell said. “We might not be leader [of the lifestyle segment], but we’re in the running.” NYLO was able to secure ﬁnancing for its first corporate properties by teaming with Lehman Brothers. To date, the company has opened two properties— Plano, Texas, and Warwick, R.I., and three more are scheduled for 2009: NYLOs in Las Colinas, Texas; Overland Park, Kan.; and Broomfield, Colo. But the company’s timing wasn’t impeccable. Now that Russell and his team introduced franchising opportunities for both Overlooking the Pawtuxet River, the lounge at NYLO Providence/Warwick (R.I.) reﬂects the hotel’s nautical design inﬂuences with chandeliers shaped like dry sea coral and anemone-inspired wall sconces for candle lighting. NYLO and XP brands, the market has taken a turn for the worse and developers with equity are harder to come by. “We’ve got more than 50 franchises in the pipeline, but that doesn’t mean they all will come to fruition,” Russell said. “It’s bad timing with the economy going south. Getting people to build and get ﬁnancing is difﬁcult, but not impossible.” New VP of franchise development Charles Armstrong, who joined NYLO in August after heading franchise development for Hawthorn Suites, is optimistic the company will ﬁnd the right development partners. Three franchising agreements already have been approved—one NYLO and two XPs. “If you believe in the industry, this is actually a terriﬁc time to plan your hotel: buying in a down cycle and opening in an up cycle,” Armstrong said. “Even though these aren’t the best of times, we do have traction. Our model developer has been through these types of cycles before.” Overall, Armstrong said NYLO is looking for developers with experience to build properties—“people who understand NYLO and understand the market.” He said the ideal developer would want to build multiple properties so NYLO could provide optimal value as a franchisor. The license agreement is standard with 5 percent royalty fees and 3 percent brand fees, Russell said. Target markets are secondary and tertiary cities with the basic demand generators, although Armstrong said he has heard interest from developers who want to build in downtown markets. “We are really delighted to have invitations to go to gateway cities,” Armstrong said. “The target cost was aimed at secondary cities.” A full-service NYLO costs around $23 million to build, and the scaled-down XP costs about $11.5 million. Swimming pools are optional at XP, which will have 90-150 guestrooms, as opposed to NYLO’s 160-200 guestrooms. Occupancy at the Plano, Texas property is running between 60 and 65 percent and the market share is increasing month over month, said Patrick O’Neil, GM at the property. Word about the bar at the Plano property has spread, too. Russell called The Loft a “destination bar,” saying locals who aren’t staying overnight at the property are coming in for a drink. O’Neil O’Neil said the prop- NYLO erty is averaging nearly $75 to $100 per occupied room in food-and-beverage costs. He said the bar has been an excellent marketing tool, with guests who have a good experience at the bar choosing to stay overnight and then telling friends to do the same. “That’s a point of difference,” Russell said. “This is a very cool place to go. We have designed these bars to the local region. We are a brand, but we do have some kind of connection to the community.” For example, The Loft at the Warwick, R.I. property—on the banks of the Pawtuxet River— features glass tables ﬁlled with seashells and ﬂoor-to-ceiling windows. The 3,000-square-foot terrace overlooks the river. “It’s just different,” Russell said. “It helps us tell a story. To create a brand, you need a story.” jfreed@questex.com CIRCLE NO. 136 CIRCLE NO. 138 NYLO http://www.HotelMotel.com http://www.maascompanies.com http://www.sterifab.com http://www.maascompanies.com

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Hotel & Motel Management - October 6, 2008 Contents NYLO Brands Mix Up Lifestyle Segment La Quinta Eyes Mexico, Canada for Growth Perspective Legally Speaking Marketing Matters Satisfaction Trends Maintenance Doctor HotelWorld Update Trends & Stats Independent Hotels Top Hotel Multiunit Owners and Developers Survey Cleaning & Maintenance Music Wallcoverings Supplier News Transactions Softgoods: Bedding & Linens People Events Ad/Editorial Index Marketplace Classifieds Checking Out

Hotel & Motel Management - October 6, 2008

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