SAN DIEGO—New AmericInn president and CEO Paul Kirwin laid out his expansion plans for the brand, and they include eventually going outside of U.S. borders. But for now, Kirwin is planning to build on the foundation of the brand’s 220 properties by expanding into untapped primary markets.
Kirwin, who also serves as president and CEO of AmericInn parent company Northcott Hospitality, said during an interview conducted at the recent Americas Lodging Investment Summit in San Diego, that the majority of expansion will come along highways and in the suburban rinks of larger cities—with an occasional urban site sprinkled in.
“Our strategy going forward to accelerate nationally is to be in more primary markets and secondary markets,” Kirwin said. “Eighty, 90 percent of that will be suburban when it’s in primary markets. Our first priority is to extend down from the Midwest, something we’ve been working on; but we’re staffing up in order to really grow nationally over the next three (years) to five years.”
Kirwin hired Ron Burgett as executive VP of development for Northcott and AmericInn to spearhead the growth.
“We’re very strong in the upper Midwest; we’re really looking first and foremost to push down from that to the lower Midwest and out toward the Northeast and further into the Mountain West,” Kirwin said. “We’ll be competing really to get franchises and some company-owned hotels across the country when the circumstances are right.”
While the brand has been all new construction in the past, Kirwin said there will be some conversion opportunities emerging as the U.S. hotel industry begins to recover from the recession.
“(We’re thinking about) 75 percent conversion over the next three years,” he said.
Regardless of how they come into the system, the new properties will need to adhere to AmericInn’s “Quieter by Design” room style. The program puts an emphasis on quiet guestrooms.
The average AmericInn has 75 guestrooms and costs between US$65,000 and US$80,000 per key (excluding land) to build.
Kirwin joined Chanhassen, Minnesota-based Northcott in mid-2009 and became president and CEO in January when his predecessor Arnold Angeloni retired. Because his background includes a long stint at Carlson Hotels Worldwide for which he worked in Asia, Kirwin expects AmericInn to be more than a U.S. brand at some point.
“We’ve talked with our board about that, and our first priority in this next three-year strategic cycle is to deliver on the accelerated growth in the U.S.,” he said. “Especially because of the name, there is interest in Asia in the brand. We have some talk under way with that today, but we’ve not made that a priority. I would foresee that down the road.”
Northcott Hospitality is celebrating its 50th anniversary this year. Its hotel-development company and hotel property-management company will focus on AmericInn, but will, in the right circumstances, develop or operate a hotel with a different brand.
From the beginning, founder Wyman Nelson had the company in the restaurant business, and it’s something Kirwin said remains a focus—and in some cases, an indicator.
“The restaurant business is more of a leading indicator than the hotel business,” he said. “In the last month, especially the last three or four weeks, we’ve seen improvement in our restaurants. My take on that is that it’s taken about a year for us to get through this shock that occurred to both the financial system and American consumers. … On the hotel side, it’ll be awhile before we see an improvement.”
And what will signal that turnaround?
“I watch for … a pickup in demand,” Kirwin said. “That seems to me that’s the thing we have to watch. We’re really in this phase now where rates are suffering because we have too much product for the level of demand. And with technology today, consumers have absolute transparency to pricing.
“Everybody’s under pressure to fill every room that they can tonight,” he said. “Until we get more demand and demand growth … until then it’s a guerrilla war out there to fight for every room you can get.”