Jim Donald Improving Extended Stay America

Jim Donald believes a company’s success lies in the hands of its employees. That’s why he’s made a career out of engaging with and motivating frontline staff, from baristas to checkout clerks, at companies like Walmart, Safeway, and Starbucks. Now he’s doing the same at Extended Stay America and his hands-on approach seems to be making an impact. Medallia recently recognized the company as the most improved brand in the economy segment for the fourth quarter of 2012.

Lodging: You’ve been at Extended Stay America for a year now. How are things different there now than when you first arrived?

Jim Donald: I visited 50 properties before I took the job last year. And what I found was a lot of people wanting to take better care of Extended Stay guests, but they needed capital, some time, and the leadership to do it properly. This company came out of bankruptcy in the fall of 2010, and didn’t do a good job of communicating that to our potential corporate customers. There was still a mind-set that was afraid to make the decisions that needed to be made. So all I did was spread the word that there was a new way forward and I would be the voice behind it. I held town halls, I cooked dinners for hotel managers, I had breakfasts with the housekeepers at 5 in the morning. I let every member of this organization know that they are part of moving the company forward.

Lodging: What’s the biggest difference between Extended Stay America and other hotel chains?

Donald: We are the largest hotel owner and operator in North America. This gives us the advantage of using the entire brand to leverage costs from a procurement perspective. It makes us very nimble. With almost 700 properties, 76,000 rooms, and 10,000 employees, this company can maneuver faster than a 50-hotel franchise chain because of what the mothership can and can’t do with those 50 hotels. Instead, we are in charge of our own future.

Lodging: Why is there so much interest in the extended-stay market right now?

Donald: This segment is very recession-proof—not only can it handle downturns but it can quickly take advantage of upturns as well. People are seeing that the extended-stay model is efficient. It’s not complicated. Our hotels don’t have health clubs or spas or bars or any of that, so we’re able to drive value through grab-and-go breakfasts and some of the other amenities we’ve put forward.

Lodging: What do you get out of visiting individual properties?

Donald: I’ve spent 65 percent of my time in the field to make myself accessible, and to meet as many associates as I can. It was important for me to become familiar with what a day in the life was like but also be able to bring these findings back to corporate so we could create programs and marketing initiatives based on a thorough understanding of what our associates regularly face.

Lodging: Does this also help energize the Extended Stay America workforce?

Donald: Actually, I wouldn’t say I motivate them but instead that I stay in touch with them. Monday through Friday I send out a daily voicemail to all the property managers and surrounding folks. I regularly e-mail our district level associates. I send a personal e-mail to the regionals every Friday. I have an [executive] team e-mail I send out once a week. These are simply a part of doing business, but they’re going to where the bulk of our associates are.

Lodging: How does the get-out-of-jail-free card you created for your employees work?

Donald: These cards are really nothing more than a safety net to let people know that we aren’t in this bankrupt mode anymore. It’s my way of saying that unless they go out and take a chance, then nothing’s going to happen.

FAST FACTS

Title: President and CEO, Extended Stay America

Years with company: One

First hotel job: President and CEO

Hometown: Tampa

Never Travels Without: His iPhone

Best Advice He Ever Got: Sam Walton told me, “If you want to be successful, don’t ever be bigger than your front-line associates. If you do, you’ll lose touch with what your busines is all about.”