MINNEAPOLIS—With a multiyear plan to grow the brand, President and CEO Paul Kirwin said 2012 is a “turning point” for AmericInn.
Opening AmericInn’s annual conference Monday in its home city of Minneapolis, Kirwin outlined three key objectives he has for the brand: growth, driving revenue and improving quality.
Before 2012, Kirwin said that, to some degree, AmericInn had stopped growing. The company currently has 230 hotels in the portfolio. It opened seven new hotels in 2011—all conversions—and signed 10 new contracts, whereas the company signed only five contracts in 2010.
“It’s critically important to drive that growth,” he said.
The brand has set a growth goal to sign 10 new hotels in 2012, he said, adding he hopes the majority of those will be new construction but understands that entering the finance market is still challenging.
“In time I’d like to get that up to 20, but for now let’s keep it at 10,” he said.
Kirwin addressed concerns that AmericInn is taking more conversions today; before the downturn it was a new-build-only hotel brand. He comforted existing owners by saying converted properties are required to spend an average of $475,000 upfront on a property-improvement plan, often before the property opens.
“Conversions are held to same standards, if not higher,” he said. Properties converted into the system in 2011 have added valuable brand presence and awareness, he added.
“I still believe it’s a successful strategy,” he said. “Less than 10% of our brand has been added by conversion.”
Construction on two new AmericInn hotels in Iowa began in 2011, and the first of those properties—in Fairfield—opened in late March. Both hotels adopted AmericInn’s new prototype standards, which include: Serta Perfect Sleeper beds; 32-inch flat-screen TVs; and contemporary color schemes. The hotel is owned by Apollo Development and managed by Three Rivers Hospitality, the management arm of AmericInn.
“AmericInn Refresh,” with a cost of $75 million, is taking place over a three-year period and will be phased into all hotels, Kirwin said. He said the new prototype gives developers more flexibility around the structure of the hotels.
Driving revenue
Outside of portfolio growth, Kirwin’s next objective is revenue growth. Over everything else, he said, a brand is a marketing tool to drive revenue.
In 2011, AmericInn hotels reported a 5% increase in revenue per available room over 2010. The company saw 10% growth through its proprietary central reservations system, with 30% of all reservations coming through AmericInn’s CRS.
Kirwin said the revenue growth can be directly attributed to the three-year PIP program.
“I’m really pleased with how the program is going. I know it’s been difficult, but I’m pleased to report that it’s having an impact,” he said.
Kirwin said all of AmericInn’s initiatives that will impact the guest are driven by guest comments and brand-wide, quantitative results.
“We also watch our competition, which is constantly evolving and changing,” he said. “We don’t necessarily look to be a market leader, but we, at minimum, want to be a fast follower. We can’t be a brand that’s way behind what the customers’ demands are.”
Improving quality
Two upgrades AmericInn will focus on improving in 2012 are hot breakfast options and providing free, fast Wi-Fi. New brand standards will be written to address these needs.
“Too many people aren’t happy with what we’re providing” in those areas, he said.
Kirwin said the larger, competing chains are improving breakfast options as a way to lift average daily rate and AmericInn must keep pace.
“In 2012, we will have new brand standards regarding hot breakfast,” he said. “And it’s critical that we deliver on those brand standards.”
AmericInn’s new breakfast standards will provide better quality food and offer a more diversified selection.
New brand standards also will address the demand from guests for free high-speed Internet access. “This is an expectation customers want today,” he said.
Marketing
Next, AmericInn will start marketing and advertising the refreshed portfolio.
Mark Nicpon, VP of marketing and distribution, and chief information officer, said in 2012 approximately 60% of AmericInn’s marketing spend will be digital and 40% will be through traditional mediums. The company will run radio advertisements in AmericInn’s 10 largest feeder markets and target mothers (decision-makers) with a household income of $50,000 to $60,000 from ages 25 to 50. The radio ads will be downloadable, and hotel owners can run them in their respective markets for “a few hundred dollars a week,” Nicpon said.
AmericInn also will continue its brand photography initiative, sending professional photographers to photograph new guestrooms, lobbies, breakfast areas and pools as the hotels complete their PIPs.
The new photos will be uploaded to AmericInn’s CRS, as well as a newly designed AmericInn.com that recently went live. A new mobile site will launch in June.
