FlyerTalk Forums - View Single Post - Starwood Corporate : exploring options to boost value inc acquiring or being acquired
Old Apr 18, 2015, 4:05 pm
  #15  
bocastephen
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Originally Posted by christianj
Instead of a large deal with IHG or Wyndham couldn't Starwood buy a limited assortment brand like La Quinta or Extended Stay America to cover their lack of properties on the lower end spectrum? Not advocating it but hasn't there also been talk that Accor wanted to rid themselves of the Motel 6 hotels brand. A deal with Carlson would also give them nice coverage on the lower end spectrum in the U.S. with Country Inn and Suites and help Carlson on the higher end in the U.S.
I don't believe a low end brand is needed in the SW portfolio. Four Points is flexible enough that it can cover the mid range down to the upper budget range depending on location. I won't disclose the specific area that we were thinking to put a Four Points with EB investment money, but the location would have relatively low land or existing property-to-convert acquisition costs and lower operating expenses than an urban or urban-adjacent center - so I can offer a solid quality product and not break anyone's nightly budget...plus the brand gives me flexibility to offer meeting space, wedding venue space, etc - I don't know many people who book their wedding reception at a local Travelodge or Motel 6.

Frankly I don't want a low end property to own - I don't need the hassle of constant refurbishment to undo guest damage, hiring security to chase out prostitutes and drug dealers, etc etc. I want mid priced business travelers and road trippers who appreciate the features, quality and value of my property and the brand is a magnet to draw SPG members into an area that has no current SPG coverage.

Days Inn, Extended Stay America, Value Inn, etc have a place in the American hotel landscape, but not as part of the Starwood portfolio. Now I believe there are a few European-only budget chains that are low priced, well maintained, very clean and offer a decent feature set (like Motel One of Germany or the Ibis brand), but I don't think you can "upscale" a budget brand in the US market and not have the individual properties end up trashed because of our unfortunate cultural practices.
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