ESA in the thick of strengthening franchise business
 
ESA in the thick of strengthening franchise business
15 OCTOBER 2019 7:46 AM

Extended Stay America is ahead of pace for various aspects of its 2.0 strategy. In a video interview, EVP and Chief Development Officer Jim Alderman also gave color on hot markets for development, downturn strategies and more.

PHOENIX—With a focus on strengthening its franchise business, Extended Stay America is right in the thick of its 2.0 strategy, according to EVP and Chief Development Officer Jim Alderman.

“I’d say we are ahead of where we … thought we would be from a franchise point of view, and a development point of view, we are right where we need to be but we will probably taper that off a little bit on owned-corporate development after 2021,” he said in a video interview during a break at the recent Lodging Conference. “We’ve got about 28 in the pipeline now.”

Alderman said the relaunch of ESA’s development program helped bolster its franchise program. The company is targeting markets such as Florida, North Carolina, South Carolina, Georgia and Texas for development.

It “showed everybody that this is what they are, and yes they’re buildable,” he said. “Developers like to develop and with a viable product, they look at our plans and say, ‘I believe you’ve come up with the right formula.’”

Another aspect of the 2.0 strategy is selling hotels, and ESA is ahead of schedule so far, he said. Watch the video below for more color on growth and the 2.0 strategy.

Video highlights
Alderman on how the midscale, extended-stay segment will fare during a downturn: “The economy is strong, people need a place to stay and people are moving for work but not permanently, and I see it at our hotels all the time when our 30-plus stays really seem to be increasing in some markets … and it’s good to be able to have the footprint we have to capture that. I believe, like in the last downturn … we’re not going to be known as ‘Downturns “R” Us’ but we are the more likely beneficiary of in the midscale room where you can cook and eat.”

Alderman on keeping the brand fresh with a new prototype: “That’s what we’re so excited (about), this is the first new prototype in 12 years, so everything about it is fresh. When you really look at it, it’s not physically the room itself (that is different), but updated colors, updated appliances … after owning these for 25 years, you learn a lot of what breaks quick, what materials to use. We’re trying to have a better stay-play area.”

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