Vantage works on brand integration
 
Vantage works on brand integration
16 DECEMBER 2014 7:31 AM
Following its acquisition of America’s Best Franchising, executives of Vantage Hospitality Group are working to fit new brands into the company’s existing portfolio.
LAS VEGAS—With six new brands in its portfolio following the acquisition of America’s Best Franchising, Vantage Hospitality Group is working to incorporate the new flags into the company’s existing lineup. The result will be greater choice for consumers and owners, executives said last week at the company’s annual conference.
 
“When the opportunity arose to acquire a synergistic group of brands, we jumped at the chance,” said Bernie Moyle, COO and CFO. In July, the company purchased six brands* from America’s Best Franchising: 3 Palms Hotels & Resorts; America’s Best Inns & Suites; Country Hearth Inn & Suites; Jameson Inn; Jameson Suites; and Signature Inn.

Vantage executives are now retooling and incorporating all but America’s Best Inns into the company’s portfolio.

“Now our challenge is to take them to the next level," Moyle said.
 
Since the acquisition, executives have worked to stratify new and existing flags into a matrix of eight brands that range from the budget (Signature Inn) through upscale segments (Lexington Hotel, 3 Palms Hotels & Resorts), plus one soft brand (Lexington Legacy). Counting the 200-plus hotels from America’s Best Franchising, Vantage has 1,207 properties, including 1,004 under its core Americas Best Value Inn, Canadas Best Value Inn and Value Inn Worldwide banners. 
 
With these “swim lanes,” as President and CEO Roger Bloss described them, owners will be able to evaluate the positioning of their properties and determine whether it makes sense to migrate to another brand within the system.
 
“We will have conversations with ABVI members to look at where your properties are in the stratification and where there should be,” Moyle told a general session audience at the conference.
 
The company has separate plans for two brands it acquired: Jameson Inns and America’s Best Inns. Bloss said leadership will collaborate with owners of Jameson Inn properties to determine the brand’s focus and positioning.
 
Bloss said eliminating American’s Best Inns from the industry was one of the reasons the company pursued the ABF acquisition, and owners of those properties will be encouraged to move to other brands—most likely Americas Best Value Inn—within the new organization.
 
“We know what our engine can produce, and we’re confident they will see our revenue production and our resources and they’ll make a change,” Bloss said, adding the company will provide “financial opportunities” to those who decide to switch from the America’s Best Inn brand.
 
Protecting owners
The executives addressed potential concerns on how the influx of additional brands will affect existing Vantage members.
 
“The biggest question we get is whether we will put four brands on four corners. Our competitors will put anything on any corner, but we’re adamant that we won’t do that,” Bloss said. “We’ve always had a courtesy area of protection policy, so we won’t put a similar brand within three miles of another hotel unless the owners agree. And we will continue to notify all members within 20 miles.”
 
One of the by-products of Vantage’s growth in recent years is that it began to take on legal characteristics of a franchise organization, instead of the membership group it is, Moyle said. As a result, company executives are drafting franchise disclosure documents for its legacy brands and rewriting documents for the brands it acquired.
 
“This is a regulator issue versus an attitudinal issue, and our attitudes haven’t changed,” he said. “As our members have increasingly asked for more (services), the brand has slowly exercised more control over them, and in theory we’ve become an accidental franchisor.
 
“We want to be compliant without changing anything we are doing. We have a bill of rights for our members, and they can bank on that no matter what they have heard,” he said.
 
Growth plans
While most of Vantage’s growth plans center on North America, Bloss said global development in the coming year also will focus on China, South Korea and India, where it is finalizing a master license agreement for its Value Inn brand.
 
“However, our priority for international development is Canada,” he said. “We now have around 35 hotels in the country and are building a development team. Our focus will be in the Atlantic provinces as well as Manitoba, Saskatchewan and Alberta.”
 
To kick start the addition of new-construction properties, the company introduced new prototypes for the ABVI and Lexington brands. The company is providing financial incentives to developers who build using the prototypes.
 
Mark Williams, president of Vantage’s midscale and upscale brands, said new-build Lexington hotels “in the construction phase” include one in Illinois and two in Florida. Agreements are in place for a project in Moab, Utah, and in six Florida cities.
 
Vantage is participating in some of the new development. Bloss said he expects the company to be involved in six to 10 projects.
 
“We will (build) our own, or as a joint venture, as a manager, or as a brand. Whatever makes sense and is fair,” Bloss said. “We know we’ve got to build some Lexingtons on our own. We’ve acquired land and are getting ready to put shovels into the ground.”
 
Vantage is a partner in the Moab project and is considering a dual-brand project in Miami that would include the Lexington and Country Hearth brands in a hotel of approximately 300 rooms.
 
Voting results
During the conference, members voted on six proposals with two-thirds majority required for passage:
  • A resolution requiring properties by January 2016 to provide wireless Internet access in guestrooms and common areas passed with an 85% vote.
  • Voters rejected a proposed requirement that all members each month report to STR their gross rooms revenue and number of rooms sold. STR is the parent company of Hotel News Now.  
  • In votes on separate proposals, members agreed to extend through 2018 a surcharge to fund Internet marketing and to remove a previous sunset clause for the fund.
  • With 77% of members voting yes, the system’s monthly marketing fees will be increased by $1 per room, per month per year through 2018. By 2018, the fee will increase to $15 per room per month.
  • The members failed to approve a proposal that would have required all properties to migrate to a company-approved property management system.

Editor’s note: Vantage Hospitality Group paid for all travel expenses to the chain’s annual convention, including airfare, transportation and hotel accommodations. Complete editorial control was at the discretion of Hotel News Now; Vantage Hospitality had no influence over the coverage provided.

Correction (16 December 2014): An earlier version of this story said five brands. It has been updated accordingly.
 

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