NYLO's Russell gets creative

NEW YORK—Industry veteran John Russell, fully aware the economic meltdown has been detrimental to franchising a new brand, has looked to an outside partnership to supplement growth of NYLO Hotels.

This month, NYLO will open its third hotel, despite Russell targeting 50 open hotels by 2010 when the brand was launched in September 2005.

Russell said the availability of debt has left franchisees in a bind. “Do we have a failed business plan? No,” Russell said. “The ones that are opened are doing fine. It’s not the product; we’re just not going to be on target for their development.”

There are currently 52 properties in the pipeline—half NYLO and half the smaller, select-service spinoff, xp by NYLO. But only another three are projected to break ground this year.

Now, Russell is promoting a partnership to help develop franchised student housing. Kevin Bradt, formerly a Choice Hotels executive, has introduced CampusBrands. The company is creating a student housing brand, developing off-campus student housing through new construction and conversion of hotels and apartment buildings. The NYLO team will provide design consulting and help run the franchise model.

“We’re going to be the development arm,” Russell said. “There are so many underperforming hotels located near college campuses, they don’t know what to do with them. What we want to try to do is move them to a new asset category and provide it as full-fledged student housing.”

Russell and Bradt, CEO of CampusBrands, also will target existing student-housing operators to get them aboard and begin implementing brand standards, which they say will increase occupancy and rate, as well as give parents and college students a sense of security.

jfreed@questex.com