If it’s appropriate for a corporate executive to be visibly giddy with excitement, then Nasir Raja has found his place.
Raja is senior vice president of brand operations at Wyndham Hotel Group, a new gig he got in October when the New Jersey-based franchiser acquired AmericInn, a regional midscale brand best known in the upper Midwest. Before the $170-million deal closed, Raja held a similar position with Northcott Hospitality International, owner of AmericInn.
On a recent rainy Friday afternoon at Wyndham Hotel Group’s headquarters in Parsippany, New Jersey, Raja’s smile was so bright, it cut through the cloudy gloom visible through the board room windows. He had just spent several hours watching new bookings light up the company’s dashboard like cascading glitter as members of Wyndham Rewards made reservations at AmericInn hotels. The day before, Wyndham Hotel Group completed the merger of AmericInn’s 1 million frequent guests with Wyndham Rewards, giving AmericInn owners a pool of more than 55 million members.
“This level of exposure and scale is what we are talking about,” said Raja. “Our franchisees are now very excited about the potential of the brand, the future of the brand.”
AmericInn owner Mahesh Patel said 95 percent of his guests know about Wyndham Rewards. “We are enrolling more guests to Wyndham Rewards than we did with AmericInn’s Easy Rewards program. Before, it was difficult to convince a guest to enroll in Easy Rewards but now, thanks to the scale, simplicity and generosity of Wyndham Rewards, it has become much easier.”
Mahesh and his brother, Lal Patel, together own five AmericInns in Minnesota and Wisconsin. Although it’s a midscale-segmented brand, their hotels usually command an upper midscale rate above $100.
Mahesh said he was at first concerned AmericInn would get lost among Wyndham Hotel Group’s other 19 brands and see declines in occupancy, ADR and RevPAR. On the contrary, he said, a report in early March from one of his AmericInns showed an uptick in walk-ins and reservations via Wyndham’s CRS as well as OTA channels. “According to reports and forecasts, I would say our revenue will go up approximately 20 to 30 percent,” he said in an email.
Until Raja stepped under Wyndham Hotel Group’s umbrella, the hotel executive had spent several years struggling to grow the brand through new franchise development. Its footprint was fixed firmly in such states as Minnesota, Illinois, Wisconsin and the Dakotas, but prospective investors outside that region needed more scale and horsepower in its marketing and distribution engines before they would consider licensing an AmericInn.
For several years, the brand was stuck at 200 hotels. Although it had a presence in 21 states, it was unable to hurdle the growth barrier and gain scale. At the same time, owners were wondering how to increase brand recognition and generate more business beyond their Midwest followers.
“It is a beautiful brand with high-quality properties and high-quality owners, but outside the five states, the brand was less visible,” Raja said. “Folks didn’t know as much about AmericInn; even across the border in Illinois we had a tough time selling the brand. Now with Wyndham, it is easier for us to make a value proposition.”
Raja said those who own an AmericInn and know its value are “fiercely protective” of the brand.
‘Brand is Everything’
During a tour of AmericInn properties in July when Wyndham Hotel Group announced the sales agreement, “the first questions our franchisees asked was if Wyndham would retain the unique identity of AmericInn,” Raja said. He told owners that Wyndham “did not acquire AmericInn to mess it up.” Indeed, it’s the brand’s quality and consistency of chart-topping customer service that attracted Wyndham to the deal in the first place.
Raja said of its 200 hotels, 88 percent are four stars or higher on TripAdvisor. Seven AmericInns are a perfect five. “That tells you how focused our owners are on quality and consistency of service. When I see a 3.9 on TripAdvisor, I am concerned.”
Bharat Patel owns three AmericInns in Iowa and Illinois. He acquired his first license in 2014 and has served on the brand’s owner advisory council for the past two years. Like Mahesh Patel, Bharat also had concerns about what the acquisition would mean to the brand. “To me, brand is everything. The stronger the brand, the stronger the franchisee,” Bharat said in an email interview. “An effective brand model represents elements that drive your business. It provides information and is consistent with standards that allow for better decisions. The better the decisions, the better the financial results for all parties.”
He said it’s too early for him to tell whether AmericInn’s merger with Wyndham Hotel Group has been good for his business. But with exposure to millions who know the Wyndham name and are loyalty program members, he predicts “the possibilities are endless.”
Bharat also is considering building more AmericInns. He thought he had enough business with the hotels he owns. “However, my perception changed when I had an opportunity to meet with Wyndham leadership during the AmericInn owner advisory board meeting at Wyndham’s headquarters in October, where Geoff Ballotti [CEO of Wyndham Hotel Group] shared his vision for the brand and the changes Wyndham plans to make AmericInn the leader in the midscale segment.
“I like the direction they [Wyndham] are headed, where the focus is to grow the brand through quality – not just quantity.”
New Construction Ahead
AmericInn’s growth strategy mostly involves new construction. Raja has been with AmericInn since 2010. He said from its birth 36 years ago, the brand has been a new-build asset.
Northcott added conversions several years ago to establish a presence in high-barrier-to-entry markets like Chicago, Indianapolis, Minneapolis and Omaha. “Conversions supplement our growth, but 85 percent of our brand is new construction.”
Its pipeline of 25 hotels has a few conversions, but most are new hotels that will build the brand’s latest Gen 4 prototype. “We plan to grow deliberately,” Raja said. He does not want to kick growth into such a high gear the brand loses its grip on its quality and value proposition.
Mahesh Patel said he and his brother plan to build more AmericInns as well as other Wyndham-branded hotels. AmericInn “can compete directly with Best Western and Comfort Inn,” he said. In addition, they acquired a Super 8 in Wisconsin. “It is a well-performing hotel.”
Asian Americans in Range
In seeking developers and franchisees, Wyndham Hotel Group is targeting other Asian American hoteliers, a community in which AmericInn only recently began to make inroads. “In the past few years, we’ve seen South Asians make up 90 percent of our new franchisees,” Raja said. “Now about 40 percent of our portfolio is owned by Asian Americans. That’s a huge change for the brand.”
Another aspect of growth the brand is experiencing is the number of owners who have more than one AmericInn. “They start with one and very quickly go to three or four,” Raja said. He pointed to VKB Management, owned by Bhupen Patel and his son Kalpesh Patel in Des Moines, Iowa. The family business first converted a property in 2010 and now has five AmericInns.
Mahesh and Lal Patel in La Crosse, Wisconsin, opened an AmericInn two years ago “and quickly got to three,” Raja said. “Now we are talking with them about building two more.
“For a brand that is not that big, it’s a big deal. It tells you when franchisees become part of AmericInn, they like what they see, they like what the brand delivers to their business.”
The Asian American hotelier with the most AmericInns is Champ Patel, founder and CEO of Champion Hotels in Oklahoma City. But he is new to the AmericInn family, having acquired 10 hotels Northcott Hospitality owned when it agreed to the Wyndham deal. Champion Hotels bought the properties on Oct. 2, the same day Wyndham closed on its acquisition.
Champion Hotels’ investment in AmericInn is because Wyndham now owns the brand, Raja said. “Champ Patel immediately recognized the value proposition created by Wyndham. He is the biggest hotelier in the business, and it shows the strength of Wyndham’s relationships. We are in the big leagues now, and we can attract the big-league investors, developers and multi-unit owners.”
During its global conference April 9-12 in Las Vegas, Wyndham will exhibit AmericInn’s Gen 4 prototype – exposing the brand to more than 6,000 attendees.
AAHOA’s 2018 trade show and convention was another venue in which Raja was eager to showcase AmericInn. “In the past, as a small brand, it was hard for us to participate; it was very expensive for us to participate,” he said. “Now that we are part of the largest hotel network in the world, we can participate and get noticed.
“Our relationship with Wyndham gives us an avenue to growth we did not have before.” In addition, he said, the merger gives AmericInn franchisees easier access to invest in Wyndham’s other 19 brands. Make that 20 if Wyndham closes on its acquisition of La Quinta Inns & Suites in May.
Besides its existing pipeline, Wyndham’s development team is making inroads in such markets as the JFK Airport in New York, the Carolinas and Georgia. “We have interest in Montana, Idaho and Texas and we are getting more traction in Michigan,” Raja said.
Raja credits Wyndham Hotel Group’s culture of collaboration for the easy transition of AmericInn across the board – from technology such as its CRS and PMS to its Rewards program and to operations training for general managers and owners.
Wyndham is maintaining the brand’s Gen 4 prototype as well as the brand’s marketing slogan “America’s welcoming neighbor.”
“The slogan has defined the brand’s service culture for a few years now,” Raja said. “Wyndham’s marketing team likes it and will keep it.
“Wyndham has taken what is good about AmericInn and given us what we did not have before. The combination is working out great.”