IHG Hits Milestone in Expansion of Staybridge Suites Brand

IHG spokesman Stephen Boggs said all of the 125 existing hotels are in the Americas division, which includes the US, Canada, Brazil, Mexico, Latin America, Central America and South America . He tells GlobeSt.com that IHG has 157 Staybridge hotels in its global development pipeline, including the 147 in the Americas division. Boggs says that as of the end of 2007, the development pipeline includes eight hotels in the United Kingdom and two in the United Arab Emirates. Those properties are under the auspices of IHG's Europe, Middle East and Africa divisions.Staybridge Suites normally have fewer than 150 rooms, with development costs averaging $100,000 per key, compared to Candlewood Suites, IHG's second-tier, upper-end extended stay product, which averages $75,000 per room. Radomski says it takes about two years from the time a potential market ripe for IHG's Staybridge brand is identified, the right franchisee is found, the developer selected and financing placed, before a property opens.

Extended stay is one segment that investors and lenders are attracted to because even in economic downturns, it tends to perform well. The demand dictates the growth. "It's the extended stay military, or medical, such as nurses and specialty doctors, corporate training and (corporate) relocations'' that fuels demand, says Radomski. "Our projections are that financing (extended stay) will go on for years. Some times this travel is necessary travel even if there's an economic downturn. Historically, during slower economic periods, extend stay has done extremely well…partly because of the needs of the extended-stay business traveler.''As the credit crisis spreads into retail, office and other sectors, Radomski insists investors and lenders are out there for the extended-stay segment. "We're not seeing any kind of slowdown necessarily affecting out pace of development. Investors are out there. We're not seeing projects fall to the wayside due to the credit issue. Before we approve a (franchise) license, the credit and financing is already secured.''

The Staybridge luxury brand has grown rapidly since the first was opened in 1989 in Alpharetta, GA, and Radomski believes it's a record-breaking pace in new brand expansion. "We were first at 50, first at 100 hotels and now first at 125.''The 125th property is a $9 million hotel with 84 suites in Fort Wayne, IN, the first Staybridge in that market, but the eighth IGH property, counting a Candlewood Suites and six Holiday Inn Express hotels in or near the city.

"Indicative of where we're going for Staybridge is that we built more in 2007 than any other year for the brand and expect to break that record in 2008,'' says Radomski. "In reality, extended-stay in secondary tertiary markets is what feeds the growth of this brand overall.'' IHG doesn't develop the hotels, but rather forms a franchise agreement with a partnership or investment group. IHG serves as consultants in design and construction and ends up managing about one-third of the Staybridges built and half of the Candlewood Suites.