|Cambria Suites Pittsburgh
REPORT FROM THE U.S.—Timing is everything.
Despite a development hit during the downturn and the recent loss of four properties, the Cambria Suites brand is alive and well, according to owners and brand management at Choice Hotels International.
The brand was launched in 2005 during the high times—at one point, there were 59 properties under contract, according to a 2007 news release from Choice. Fast-forward to 2011 and there are only 20 properties open after the economic downturn knocked out financing and led many contracts to expire.
“This is the growth brand for Choice,” said Michael Murphy, newly appointed senior VP for the brand, adding to his role as senior VP of global sales for Choice.
In January, the company announced it was helping to finance two Cambria Suites projects in New York City (Times Square and Chelsea) with Extell Development Company and We Care Trading Company Limited. The Extell property marked the single largest equity investment by Choice.
Recent openings for the new-build upscale brand include the Cambria Suites Pittsburgh at CONSOL Energy Center in December and the Cambria Suites Hotel Washington, Pennsylvania in September. Both properties were co-developed by Horizon Properties Group LLC.
The Cambria Suites network had 23 properties with 2,700 rooms as of 31 December 2010. The brand added six new contracts in 2010. These numbers do not include the New York projects announced in January or recent contract terminations. First quarter results are expected to be released Thursday.
Owners seem optimistic about the brand’s future and Choice’s support.
“We have been disappointed in the growth of the brand; however, the whole hotel industry has been adversely impacted,” said Dave Swift, president and CEO of Swift Hospitality Group. “With the lack of new construction funding, it would have been virtually impossible for any brand to do more.”
Swift opened the second Cambria Suites property in the system and has two more in its pipeline.
“We have not lost interest in the brand,” he said. “We have to be realistic that the best laid plans can be altered by conditions that are beyond our control. The leadership under William (Edmundson) and others has been nothing but total cooperation.”
Recent announcements involving discord among Choice and Summit Hotel Properties, former owner of four Cambria Suites hotels, is “unfair to the brand,” said Sean Leatherman, senior VP of corporate development at American Hospitality Group, which owns Cambria Suites in Akron and Columbus, Ohio.
“I don’t know if I could be more optimistic based on the numbers coming out of the hotels and the guest feedback,” he said. “The problem is that it’s an unknown brand, so it takes longer for the marketing and sales efforts to payoff.”
Swift is confident in Choice’s commitment to the brand.
“I take my hat off to them,” he said. “(Choice CEO Stephen P.) Joyce made it clear to me that this brand was a high level of commitment from Choice and they were going to see it through. He has never changed his position since that very first day.”
Murphy is aware of the distribution challenge and has a lofty goal set before him—Choice plans to have 175 Cambria Suites properties in five years.
AHG has a Cambria Suites project for Erie, Pennsylvania, in the works, according to Leatherman. The financing has been tough, but things are starting to thaw, he said.
Sales efforts at existing properties have been successful, according to owners and the franchisor.
“The brand’s ability to get repeat guests is good, so my job is going to be to get as many people in those hotels for the first time because satisfaction is so high,” Murphy said. “We’ve done some work on ramp up in (revenue per available room) index performance and there is a very high ramp up value compared to like competitors, but it’s still too early—there are only 20 hotels. It’s difficult to know how much is market drive and how much is driven by the brand. Once we get to 50 hotels we can wave that flag.”
Convention around the corner
With Choice Hotels’ annual convention planned for May, HotelNewsNow.com asked owners what new information they expected to hear about the Cambria Suites brand.
Swift said he’s comfortable with the communication he has with Choice, so the conference shouldn’t bring any surprises.
“There isn’t too much at brand level that I’m not aware of, but I’m anxious to be with some of the other owners,” he said. “Hopefully, everyone else is still as committed as I am. We have to be a resilient group of investors at whatever pace we can set for it.”
Leatherman hopes to get more detail about the brand’s distribution pipeline, development assistance and operating efficiencies, “creating the same satisfaction at a lower price.”
Murphy said conversations regarding brand enhancements have just begun. “That means something substantial, the 2.0 version if you will, is still two years away … the brand is still very fresh.”