Coming off of a decidedly mixed 2015 that included a 25.6 percent drop in its stock price (year-over-year) and the departure of longtime CEO Wayne Goldberg in September, La Quinta focused on the bright side at its annual conference in Las Vegas last week. And beyond the headlines, there’s plenty happening with La Quinta that the brand should be bragging about. System-wide RevPAR grew 3.5 percent in 2015, and intense developer interest drove 107 franchise agreements signed last year—37 of them in the final quarter. All told, La Quinta opened 47 properties containing more than 4,000 rooms in 2015.
And now the Irving, Texas-based hotel chain is taking steps to steady its future. Almost two years after La Quinta Holdings went public after being owned by Blackstone for eight years, and five weeks after it announced new president and CEO Keith Cline, the company outlined several initiatives at its conference, including an accelerated $120 million, two-year renovation plan as well as a fundamental rethinking of La Quinta Returns, its points-based loyalty program.
“We’re relaunching LQ Returns this year, and we’ll be the best loyalty program and provide the best guest experience in the industry,” said VP of Loyalty Marketing Dave Sims. It starts through a partnership with Points.com that allows high-level loyalty members who have accrued millions of points an opportunity to redeem them at destination hotels and resorts, including some overseas and some that are part of other brands. “We get requests for loyalty members looking to stay at resorts, or go overseas, where we don’t have hotels,” said Chief Marketing Officer Julie Cary. “Through this partnership, customers can redeem points and stay at these places.
Another new loyalty program offering comes through La Quinta’s mobile app, and allows guests the option to immediately redeem their points for a free night’s stay. “This a game-changer, for the guest and for La Quinta properties,” Sims said. La Quinta also has another LQ Returns announcement under wraps that will take this concept even further, he added. “LQ Returns points are going to have immediate value, and they’ll be able to be used at stores, restaurants, gas stations and more, and it’ll all be done over the phone.” The company gave no timetable for the official launch of this expanded points program, but the long-term goal is to move much of the administration of the LQ Returns loyalty program through the La Quinta mobile app.
Along with accelerating the capital improvement program underway for La Quinta’s owned assets, the company announced that it will also be looking to divest itself of more of these assets. “We’re going to dispose of some of the products that don’t fit,” said EVP and Chief Development Officer Raj Trivedi. “When it comes to earnings, our company-owned assets are still significant to continued success in our future.” At the start of this year, the company had 886 total properties, 545 of which are franchised and 341 that are corporate-owned hotels.
The recently revamped renovation program will have La Quinta spending $60 million over the next two years to renovate more than 200 properties. “Our ultimate goal is that within two years we have tremendous consistency in our product,” Trivedi said. He pointed to the success of La Quinta’s new Del Sol prototype, which was announced two years ago. There are now 62 Del Sol hotels in the pipeline, with 19 currently under construction. And out of the 228 hotels in La Quinta’s total global pipeline, 86 percent are new-construction, including all of the projects underway in Latin America. Trivedi said La Quinta will still continue to grow its footprint in Mexico and Central and South America, where approximately 12 percent of the company’s pipeline now sits.