Despite achieving record financial performance in 2014, Value Place saw an opportunity to expand its network, gain access to new markets and customer segments, and further drive RevPAR growth by creating a new identity. Last April, the company rebranded to WoodSpring Suites, a name that CEO Bruce Haase says better communicates the quality of the product. With the fresh name came a new nature-inspired interior design concept by Gensler to reflect the brand’s down-to-earth personality. But there was one element the brand didn’t want to mess with: a lean, efficient operating model that consistently drives high returns for owners.
In the third quarter of 2015, WoodSpring Hotels—operators of the WoodSpring Suites and Value Place brands—reported an 18.4 percent increase in revenue to $34.7 million, a 7.6 percent boost in system-wide hotel room revenue to $65.2 million, and a 5.4 percent rise in comparable corporate hotel room RevPAR, year-over-year. The company expects this positive trend to continue in 2016 as it executes against an aggressive growth strategy. “We think there are tremendous growth opportunities in the value segment of the extended-stay industry,” Haase says.
WoodSpring expects to break ground on more than 40 hotels in 2016, a quarter of which will be corporate owned and managed. The company also is on track to rebrand the majority of its 200-hotel portfolio from Value Place to WoodSpring Suites by year’s end.
To appeal to mid-priced, extended-stay travelers who want higher service levels, the company unveiled a new prototype brand extension, WoodSpring Suites Signature, in February. Signature provides an enhanced guest experience, including additional amenities and services not found in the current WoodSpring Suites offerings, such as a convenience store, a fitness center, 24-hour laundry facilities, a staff training room, and optional meeting space.
Construction cost for the new prototype ranges from $50,000 to $55,000 per key, excluding land. Signature projects are currently under development in Cranberry (Pittsburgh), Pa., and Saugus (Boston), Mass., as well as three projects underway in both the greater Houston and Seattle markets, for a total of eight hotels in the pipeline.
Over the last 18 months, the company spoke to more than 15,000 consumers to identify the wants and needs of value-oriented, extended-stay guests, says Mike Varner, EVP of brand strategy and management. “That gives us great confidence in the building and the features we put into it and the fit for our brand and our operating model,” he says of the new prototype.
Features that set the sub-brand apart from current WoodSpring Suites and Value Place hotels include in-room dishwashers, quartz countertops in the kitchen and bathroom, upgraded drapery with sheers, a more comfortable bedding experience, and standup showers with glass doors.
Company research also revealed that some guests would be willing to spend additional money for a product that offers a little more, Varner says. Depending on the market, rates for this lower midscale product will be about $300 to $400 per week—approximately 20 percent above a standard WoodSpring Suites. But even with these enhancements, the brand still refused to compromise its tried-and-true operating model. “Everything we’ve done in the design has to work very efficiently, and that includes the market and front desk,” Varner says.
Signature properties are designed to run on 6.5 full-time equivalents, compared to 5.5 in a traditional WoodSpring or Value Place hotel. Most of the increase in labor comes from weekly housekeeping for longer-stay guests as opposed to every other week, Varner explains.
When creating the new WoodSpring interior design package and the Signature prototype, the company had to be mindful of how the design would impact the efficiency of its 99-point cleaning process. One way the company shaved off time is by replacing carpet with luxury vinyl tile (LVT) flooring. In the previous generation design, properties would shampoo the carpets in between guests. That meant taking rooms out of service for a day so the carpets had time to dry. LVT flooring is not only much easier to clean but also improves guest perception of cleanliness, Varner says. In addition, wall-hung furniture enables room attendants to easily clean right up to the wall.
Another way the brand maintains a lean business model is by having limited front desk hours. “Our guests told us they didn’t need 24 hours, and it was a tradeoff they were willing to make both in price and the overall experience,” Varner says. “That did not change as we moved from WoodSpring Suites to WoodSpring Suites Signature.”
Much of the brand’s efficiency comes from employees being able to cover multiple roles, such as a front desk agent doing laundry behind the scenes or preparing carts ahead of time for housekeepers. “It comes with a very versatile staff that works exceptionally well as a team,” Varner says. “That’s how we make it work.”