At The Lodging Conference 2022, LODGING had the chance to sit down with Extended Stay America (ESA) President and CEO, Greg Juceam, to learn more about ESA’s newly launched Select Suites brand, whose appeal to more value-conscious guests might be seen as a counterpoint to the Premier Suites brand it introduced just a year ago at a higher price point. Extended Stay America Select Suites launched with nearly 100 properties in 30 different states. Juceam said, “We’re basically launching at scale; these 100 properties aren’t just signed, they are open, ready for business, and part of the system.”
What’s the story behind this brand?
When our 27-year-old brand started out, we thought there was this single monolithic extended-stay segment. Although our core brand is well known and has been very successful, over time, we’ve gotten to know the industry and the customers better. We’ve learned that extended-stay can be super luxury all the way down to super economy. In recognition of those differences, a little under a year ago, we launched a more upscale extended-stay brand—Extended Stay America Premier Suites—because we had identified a significant amount of opportunity with that immediately adjacent less-price-sensitive customer. With this third addition to our brand segmentation, we’re just really tapping into more markets where our brand historically was unable to go, at a price point slightly below our core offering from an ADR standpoint.
The addition of the Extended Stay America Select Suites brand to our portfolio will allow our guests and franchisees to select from three different brands at three different price points. For franchisees, the new brand has a compelling value proposition and financial efficiency.
What are the differentiators that set ESA hotels apart from others in the segment?
First, unlike larger platforms playing in the extended-stay space, with brands that might represent a single-digit percentage of overall distribution and revenue, we are 100 percent focused on serving the needs of guests staying seven or more nights. All ESA brands have full-service kitchens with full-size refrigerators and cooktops. It’s unlikely that the big companies dabbling in the space would be uniquely tailoring their offering—whether it’s the reservation delivery platform or even how they serve guests —for those staying seven or more nights.
What are the specific features that enable a lower price point for customers and a reasonable ROI for franchisees?
First, this is a conversion brand with an operating model that allows for additional labor savings. Unlike our other properties, which are open 24/7, it will shut down at night and open in the morning, like other properties in this segment. We’re also saving costs by not providing breakfast.
Can you describe the launch as it is happening and its impact on owners and franchisors?
We are able to kick this off with 100 hotels right from the start—basically launching at scale—because we acquired about 120 hotels in February of roughly 120 hotels across 30 states. Although we own most of them, they are not yet managed or branded by us; that will have to happen gradually. However, unlike brands that are mainly franchisers but may own or manage some hotels, we are in all three areas: we own, manage, and franchise, and, with this launch of 100 hotels of our own, we are showing franchisees that we as franchisors have skin in the game, that we have to eat our own cooking, so to speak. They see that if we create a brand standard, we have to live by the standards we put in place. This is something that instills confidence in the future of the brand, something I regard as a significant differentiator.