GlobeSt.com recently spoke with Gina-Lynne Smith, president ofValue Place Franchise Services about the extended-stay forecast, aforecast that continues to be cautiously optimistic. Smith'scompany, Value Place, is an economy extended-stay lodging andshort-term residential property brand that features affordablerates. The Value Place brand comes from the management team thatcreated developed lodging brands such as Residence Inn (now ownedby Marriott), Summerfield Suites (Hyatt) and Candlewood Suites(Intercontinental).

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GlobeSt.com: How did the extended stay industry fare in2009 and what your forecast for 2010?

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Smith:The extended stay industry simply hasn'tseen the declines in occupancy and RevPAR that traditional hotelshave during 2009. I expect that extended stay hotels, particularlythose in the economy segment, will continue to outperformconventional hotels. We are cautiously optimistic for 2010. Webelieve Value Place has proven to be a recession-resistant product.With 164 all new construction properties from coast-to-coast,results vary by property, but since January, average systemoccupancy is up 10 points over the same time last year. We areworking strategically to maintain and further increase thisgrowth.

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Are you seeing more travelers choosing economy, extendedstay brands over some of the more traditional options?Why?

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Smith: Extended stay properties generally even outcash flow for investors and most have lower expenses thantraditional hotels due to more efficient staffing models. Forexample, a 124-unit Value Place property operates with only four tofive full-time equivalent employees versus a traditional propertyof the same size which would likely employ 20 or more full timeteam members. Additionally, offering a clean and secure, national,economy extended stay product, Value Place has found the product tobe largely recession resistant. Solid financial performance,efficient building costs along with branding and a good balancesheet leads to more success in financing…which is critical forinvestors who want to expand their businesses today.

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GlobeSt.com: How are you finding financing?

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Smith: Most are financing their programs byapproaching local community banks where they have establishedrelationships. Other financing sources include the new USDA Programand SBA financing. Both of these programs work well with ValuePlace as our investment is under the program limits.

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Are you finding better real estate deals these days? Whattypes?

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Smith:Absolutely. We are finding that most landowners are very reasonable in their view of real estate values atthis time. When prospective franchisees can't come to agreementwith a land seller on the value of the land, it has been pleasantlysurprising how many land owners have approached the franchiseesabout joint ventures or have contacted Value Place directly tofranchise on their own.

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Natalie Dolce

Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.