Value Place Ready For Franchise Expansion

Tuesday, June 03, 2014

As reported in, Value Place, the low-cost extended-stay hotel chain, has undergone profound changes in the past year-and-a-half. It secured a $100 million capital investment, hired a new leadership team, and began launching new locations across the US. Its latest project, a new 124-room Value Place in Watford City, ND, just opened and is its third hotel in the oil-rich Bakken region of North Dakota. And Bruce Haase, the company's new chief executive officer, tells that even more hotels may open in the Bakken, and that the company is ready to begin the next phase of its national expansion.

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

But North Dakota is only one rich region, and the Wichita-based company has cast its eyes on markets throughout the country. Most of the facilities recently opened were corporate-owned, but from now on, the company will begin opening up an even greater number of franchise operations.

The company hired a franchise team back in January, and "we're really starting to hit the ground," Haase says. Value Place wants to launch about ten corporate-owned hotels per year, but for each of these, several additional franchise operations will also open. The company plans to open corporate hotels in metro regions like Atlanta, Cleveland, Denver, and southeast Florida, among others, to establish a presence and reputation, and then attract franchise operators. "The pipeline is filling up pretty rapidly."

"We're going to be more visible in the trades and visit the hotel conferences," Haase adds, to build up interest among potential franchise operators. "We're in the process of getting the word out."

He expects, however, that in many ways the business will speak for itself. "We have a finely-tuned model. It's very low-cost model for the franchisee." Each 124-room Value location has very little public space, for example, and since the guests take care of their own meals and the upkeep for their rooms, operators provide very few amenities.

And these hotels are the fastest growing sector in the hospitality industry. According to The Highland Group's 2013 Report on the Extended-Stay Lodging Market, "very large equity investments made in 2012 could signal the onset of a new wave of economy-priced extended-stay room construction. All extended-stay segments reported faster rate growth than the overall hotel industry in 2012."

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

Franchise Ranking History
Franchise 500: #268 (2014), #210 (2013), #493 (2012), #396 (2011), #443 (2010),
Fastest-Growing: #54 (2010)

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1 Choice Hotels Circle, Suite 400
Rockville, MD

Phone: 316-630-5505
Fax: (316)631-1333

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