Projecting it as “a significant growth vehicle” for the company, Sonesta International Hotels Corporation earlier this week revealed the launch of a new brand targeting the upper-midscale, select-service segment and designed to meet the ‘essential’ needs of travelers.
In an exclusive interview with LODGING, Brian Quinn, chief development officer, Sonesta, explained why the company—which now includes more than 1,200 hotels under 15 brands—made the decision to extend its lineup following the company’s acquisition of RLH Corporation in March of 2021.
“Pretty quickly, we identified some white space and that is where Essential is going to sit. That limited-service, upper-midscale space has been incredibly successful and there’s a reason for that. You’re giving the guests a bundle of amenities that are the critical ones that they want, but you’re limiting some of the services, which drives margins for the owner. So the consumer is happy and the owner is happy. The launch of Essential was our conscience listening to our prospective franchisees and our new franchisees,” said Quinn.
He noted the creation of the new brand was also in response to last year’s launch of Sonesta Select, Sonesta ES, Sonesta Simply Suites, and Sonesta Hotels from the 85-year-old Newton, Massachusetts-based company, which launched its franchise platform last year as well.
According to the company, as part of its brand pillars, Sonesta Essential will focus on offering guests a comfortable, clean place to stay with a warm and friendly guest experience. Foundational brand standards include 24-hour reception, fitness center, complimentary hot breakfast, premium all-day coffee experience, high-speed complimentary WiFi, and elevated bedding with a unique sleep program.
Quinn added that he “loved where we netted out with the name,” as he further explained the ethos of the brand.
“It is giving guests the ‘essentials’ that they need on the road in order to be successful and get done what they need to get done,” he said, adding, “We’re just not going to put things in that you don’t care about.”
Quinn emphasized there would be a big emphasis on bedding and the sleep experience and would offer franchisees options for additional elements, such as co-working spaces, as an example.
“We’re going to accelerate to where the consumer is today instead of having to renovate thousands of hotels to get there,” he said.
When asked about potential target markets, Quinn emphasized the brand has broad appeal.
“The beauty of this segment is it’ll play everywhere. Essential will be roadside, tertiary, secondary, and urban. You’ve just got to make sure that you can drive the rate,” he said, adding that having the Sonesta moniker should help owners do just that.
According to the company, Sonesta Essential offers franchisees easier new builds and conversions with reasonable brand standards, limited food and beverage requirements, and simplified conversion processes. Quinn speculated on where much of the brand’s initial growth will come from.
“Out of the gate, my guess is that it’s going to be conversion opportunities [driving growth], just because of where we are in the cycle. But we definitely anticipate that as the markets continue to improve, and interest rates and the supply chain stabilize, that new construction will be a component of its growth over time,” he said.
The first Sonesta Essential hotels will include Sonesta Essential Vacaville, California, a franchise, is set to open in late spring 2023 and Sonesta Essential Chattanooga, Tennessee, a managed property, will be converted from Sonesta Select in the fall of 2023.
Quinn noted that going forward the brand is likely to be a mix of 90 percent franchised and 10 percent managed. Roughly 200 of the company’s 1,200 properties are managed by its capital partner SVC, while the rest are franchised.
Quinn acknowledged the new brand faces some “fierce competition” within the segment citing brands such as Hampton by Hilton, Holiday Inn Express, Comfort Inn, and Fairfield by Marriott.
Finally, Quinn talked about the company’s long-term expectations for Essential.
“I have an idea of the potential and it’s not hundreds of hotels, but it’s thousands of hotels over time. How quickly we get there in this evolving market we’ll see. The aspiration for Sonesta Essential is to compete with those other products and we’d love to take our fair share of that space,” he said.