When Sterling Stoudenmire came on board as president and CEO of America’s Best Franchising (ABF) in February, he was tasked with dramatically redefining, repositioning, and relaunching the company’s brands. Knowing that ABF intended to move quickly, Vantage Hospitality President and CEO Roger Bloss seized the chance to start a dialogue with Stoudenmire about a potential partnership.
“I wanted that company ever since Mike Leven sold it,” Bloss said during a press conference call last week. “And back in the day, we didn’t have the financial wherewithal, and we were growing so well with ABVI, it just never came together. Quite frankly, I’ve regretted it ever since.”
Bloss can let go of that regret now that Vantage has entered into an agreement to acquire ABF’s six core brands—America’s Best Inns & Suites, Country Hearth Inns & Suites, Jameson Inn, Jameson Suites, Signature Inn, and 3 Palms Hotels & Resorts—as well as ABF’s license for the Budgetel Inns & Suites brand. Once the transaction is complete, Vantage will add more than 225 hotels to its current portfolio, which consists of more than 1,000 properties under the Americas Best Value Inn, Canadas Best Value Inn, Value Inn Worldwide, Value Hotel Worldwide, Lexington Inn, Lexington Hotel, and Lexington Legacy brands.
The terms of the transaction, which is expected to formally close later this year, were not disclosed. Vantage intends to use the time between now and Labor Day to start building relationships with ABF owners, go over agreements, and gather feedback before settling on a clear direction. “Integrating them into our system is going to take some time,” Bloss said, “and we want to make sure we do that with their blessing and direction so it’s cohesive to both units.”
Vantage intends to clearly define the brands and segments, along with appropriate standard and service levels for each. Once owners have a chance to evaluate where their properties fit best, they can make moves accordingly. “Depending on where they want to go, we do expect some properties to move among the flags,” Bloss said in an interview with Lodging. “We know there are going to be some markets where we have some impact issues.”
Although Bloss wouldn’t divulge definitive plans, he offered the possibility that 3 Palms would merge with Vantage’s soft brand, Lexington Legacy. Vantage also intends to reactivate the Signature Inns brand, which currently has no properties. They’re treating it as a blank canvas, but Bloss said he expects the brand to have an economy scale to it. And while Vantage plans on long-term holds for the core brands, Bloss said he doesn’t think Budgetel is going to stick around. “The rest of it is very solid,” he said.
The move has sparked discussion on whether more hotel industry consolidation will occur in the future. Bloss believes it has to. “To compete with third-party OTAs and the other big legacy brands, I do think there has to be more consolidation,” he said. “Today, it’s about distribution. I know how difficult it was for us to stay competitive at our size, and we’re pretty big. So for the smaller guys, it’s virtually impossible today. The dollars it takes to run frequent traveler programs, marketing, advertising, keyword buys, revenue management, and all of that, it’s heavily intense in manpower and technology, and smaller companies just can’t carry that overhead.”
By combining these brands under the Vantage umbrella, Bloss said it will offer members greater distribution, more marketing dollars and enhanced exposure, and additional revenue-generating programs and resources. “Our infrastructure is solid, and we’re very capable of taking this on,” Bloss said. “ABF properties are going to really benefit, and the scale of them coming in is going to benefit us. So it’s a win-win.”
When Vimal Patel, owner of America’s Best Inn in Mount Vernon, Ill., first heard the news, his initial reaction was shock. “I don’t know if it’s a good move or a bad move,” he said. “But I’m willing to give it a try.”
