WICHITA, KS—As reported in GlobeSt.com, ValuePlace, the low-cost extended-stay hotel chain, hasundergone profound changes in the past year-and-a-half. It secureda $100 million capital investment, hired a new leadership team, and began launching new locations across the US. Its latestproject, a new 124-room Value Place in Watford City, ND, justopened and is its third hotel in the oil-rich Bakkenregion of North Dakota. And Bruce Haase, thecompany's new chief executive officer, tells GlobeSt.com that evenmore hotels may open in the Bakken, and that the company is readyto begin the next phase of its national expansion.

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“We're actively looking in the shale oil area in North Dakota,”Haase says. “I definitely think there are possibilities.” And oftheir first three efforts, he adds, “the rates are high and therooms are full.”

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But North Dakota is only one rich region, and the Wichita-basedcompany has cast its eyes on markets throughout the country. Mostof the facilities recently opened were corporate-owned, but fromnow on, the company will begin opening up an even greater number offranchise operations.

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The company hired a franchise team back in January, and “we'rereally starting to hit the ground,” Haase says. Value Place wantsto launch about ten corporate-owned hotels per year, but for eachof these, several additional franchise operations will also open.The company plans to open corporate hotels in metro regions likeAtlanta, Cleveland, Denver, and southeast Florida, among others, toestablish a presence and reputation, and then attract franchiseoperators. “The pipeline is filling up pretty rapidly.”

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“We're going to be more visible in the trades and visit thehotel conferences,” Haase adds, to build up interest amongpotential franchise operators. “We're in the process of getting theword out.”

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He expects, however, that in many ways the business will speakfor itself. “We have a finely-tuned model. It's very low-cost modelfor the franchisee.” Each 124-room Value location has very littlepublic space, for example, and since the guests take care of theirown meals and the upkeep for their rooms, operators provide veryfew amenities.

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And these hotels are the fastest growing sector in thehospitality industry. According to The Highland Group's2013 Report on the Extended-Stay Lodging Market, “verylarge equity investments made in 2012 could signal the onset of anew wave of economy-priced extended-stay room construction. Allextended-stay segments reported faster rate growth than the overallhotel industry in 2012.”

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Haase chalks all that development up to demand. “Our hotelsgenerally have an occupancy rate of about 80%. In fact, we havehotels that run 100% occupied for weeks at a time.”

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Brian J. Rogal

Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.