Since joining Value Place in April, following a 12-year tenure at Choice Hotels, CEO Bruce Haase has been on a mission to accelerate the brand’s growth. “We’re trying to take it from an entrepreneurial company to a serious brand,” Haase says. To accomplish this, he recruited two colleagues he had worked with at Choice—Kelly Poling and Mike Varner. Poling is Value Place’s executive vice president and chief marketing officer, and Varner serves as senior vice president of brand strategy and marketing. Haase outlines Value Place’s aggressive growth strategy in the economy extended-stay segment.
Can you explain Value Place’s new direction? We have, I think, the best operational model in the business in extended stay. We’re bolting on to our focused operational model with a pretty strong brand marketing and distribution engine we’re going to build. So I think it’s all going to be additive. There are a lot of things we’re doing right. We just have to do some other things right as well.
How fast will you grow? There’s an opportunity to really create something new and big and grow it. Rather than changing the direction on a big ship, you can really change things pretty quickly when you’re a bit more small and nimble. As a real-estate-focused company in the past, we just hadn’t made the investments in sales and marketing and branding, and now is an opportunity to do that.
What types of investments will you make? We’re launching a new website in the next couple months, so that’s the first step. We’re going to be much more aggressive online. The good thing about the Internet these days is we can compete with the big guys online because we can be very targeted in our approach. We can target consumers that have a need for our product and be cost-efficient in terms of how we market to them online. We’re going to be looking at introducing a loyalty program and more direct marketing. There’s a whole world of opportunity in marketing and distribution. We’re never going to be a distribution engine like Marriott, but we don’t need to be. We just need to move in that direction. It’s all going to be very incremental because the company and the properties are doing pretty well without it. We’re pretty excited to think how well it will do with it.
Value Place has nearly 190 hotels in 32 states. Where are you looking to build? We have a pretty decent footprint at this point, and a few more states we’re going to break ground on in the near feature. We have a pretty aggressive growth plan in terms of geographic distribution and growing a nationwide brand. We have a fairly decent predictive model we use when we’re looking at markets in determining where we should put a Value Place, and it varies by city. You want to be in the right place in the right city. But the good news is there are a lot of cities where we aren’t present where these things can work.
Will you skew more toward franchised-owned units in the future? We just hired a franchise development organization that didn’t really exist before, so we’re building a pretty strong pipeline of franchisees, but we’ll continue to open new Value Places that are corporate owned. We’d like to get to seven to 10 Value Places that are owned and built by the company, and those will primarily be in new markets where we want to expand rather than existing markets. We’d like to have two or three times that amount of new opens with franchisees. New construction has a longer gestation period than conversions, obviously, but we’re making a lot of progress in that direction.
Does the fact that Value Place has approximately 80 corporate-owned properties give franchisees more confidence in the brand? It gives franchisees confidence to go into new markets when we’re putting our money down in the market. Our development activities in the future are going to focus on planting the flag for Value Place in markets where we don’t currently exist. And there are lots of markets. The great thing about this brand is there are plenty of markets where this concept can work and work very well. It’s just about going after the opportunities now.