GlobeSt.com EXCLUSIVE: La Quinta Details Cross-Brand Conversion Plan

"At the end of the day, it's very simple," Wayne Goldberg, executive vice president of operations for the Dallas-based La Quinta, tells GlobeSt.com. "We want to drive customer satisfaction. We want to drive customer loyalty. And, we want to drive shareholder value."

The hotelier invested about $1 million into the New Berlin, WI conversion of a Baymont Inn & Suites to a La Quinta Inn & Suites. The hotel was due for a renovation, Goldberg says, so "it made sense" to go the extra distance and capital to make it the first La Quinta in Wisconsin. A similar strategy is under way in Massachusetts--Somerville, Andover and Milford--where a trio of Tage Inns will get new flags and renovations to establish the La Quinta brand so it can pave the way for future franchisees, he explains.

Somerville has just been re-flagged; Milford will be done by early 2006. Andover is a two-building property providing a rare opportunity to retool one into a Baymont and the other into a La Quinta Inn & Suites. The work will be done by yearend, according to Goldberg.

In Round Rock, north of Austin, Goldberg says a 30-year-old La Quinta is being retooled into a Baymont and a seven-year-old Baymont is being upgraded to a La Quinta, again to the tune of nearly $1 million before the flag is run up the pole. The makeovers should be done in another five weeks.

The Cincinnati-Sharonville project, another $1-million retooling, will re-brand a 101-room Woodfield Suites as a La Quinta. The hotel, due for a renovation, was a prime re-flagging candidate because it needed upgraded to an all-suites product, Goldberg says.

The Woodfield brand, though, will be reduced to six hotels with the change, putting it under the magnifying glass to determine the long-term fate of the flag. "We don't know if all Woodfields will be converted," he says. "We are still trying to figure out why it does so well...location or brand." The hotel is nestled in a leisure market with a corporate business piece that's supported by loyal customers, he says.

The cross-branding plan began with 95 Baymonts, 185 La Quinta Inns, 77 La Quinta Inns & Suites and seven Woodfield Suites. The lone Budgetel in Jacksonville, FL will be untouched because it cements the trademark, Goldberg explains. As for the rest, he says "we see conversions in both directions." The plan's also brought a 17-hotel disposition list: mostly La Quintas and just a couple Baymonts.

The hotelier's strategy is aimed at setting up La Quinta Inn & Suites as the brand for the middle to upper of the mid-scale category and Baymont as the flag for the upper end of the economy and lower end of the mid-scale class. "We want the brand to be represented so we're consistent in the eye of the customer and the customer knows what to expect when they come in," Goldberg says, adding the La Quinta Inn, a brand unto itself, eventually could disappear. "It think it will be several years. It's an evolution to get where we want to be."

This year's cross-branding cost is embedded into a $120-million cap-ex pool that includes renovations and special projects. For previous story, click here. Aside from location, the decision is based on room and lobby sizes plus ceiling heights, Goldberg says. And if it's going to be a La Quinta Inn & Suites, a spa and pool are among the must-haves.

The juxtaposition clearly will impact La Quinta's numbers. At the last quarter's close, the average daily rate averaged $63.53. The brand breakdown is Baymont and Woodfield, $54.84 ADR; La Quinta Inn, $59.01; and La Quinta Inn & Suites, $73.59.

"We are trying to make certain we have the right flag on the right property," Goldberg says. "At this stage, we are experimenting."