HM on location: ESA targets new owners with updated prototype

GIBSONTON, Fla. — The ever-growing extended-stay segment got a boost this week when Extended Stay America officially opened its new hotel in Gibsonton, a suburb of Tampa, Fla., after a soft opening in December. 

The debut, said Jim Alderman, ESA's chief development officer, marks a new stage in the company’s growth, especially when it comes to shifting away from corporate-owned hotels. “Three years ago, we owned 100 percent of our properties,” he said. Now, the company has approximately 75 franchised properties open with a further 54 in the pipeline, in addition to 558 corporate-owned hotels. 

“We've sold properties that were converted [into] franchises and we've converted some new properties with franchisees,” Alderman said. But he said that to attract owners, an updated look was necessary for the 25-year-old brand, and if franchise owners were going to build new hotels, the corporate ownership team needed to take the first step and build the first property in the prototype.  

ESA 2.0

To develop the new 2.0 model, Alderman said, the construction and design team—including Paul Fraser, VP of construction; Amy Hollis, director of design; and Phlilip Lee, director of construction—considered everything they had learned from overseeing $1 billion worth of renovation to nearly 700 corporate-owned assets in recent years. “[They took] all of this knowledge and [put] it into a compact prototype design that utilizes every square foot as a moneymaking area,” Alderman said. 

Beyond that, Fraser said, he worked with the operations teams, sales teams and revenue-management teams to understand what worked and what did not work in terms of the property’s previous design. “And then we factored those into how do we want the rooms to work from a cost standpoint as well as functionality standpoint for our guests.” Many of those guests, he noted, stay for more than 30 days at a time, compared to other extended-stay brands that have typical stays of five nights or fewer.

The final product is a study in minimalism, with beds on high platforms with visible legs (creating extra space for storage), open shelves in the kitchen area (preventing guests from leaving behind their own cups or cans) and an open closet area with shelves and a rod for hanging some clothes (preventing guests from leaving behind a favorite shirt). The lack of doors in the storage areas not only prevents forgotten items, but extends the life of the casegoods, Alderman noted, since there are no hinges to fall apart after just a few years. The room also has few fabrics or textiles, opting for a blackout shade over the single window and luxury vinyl tile flooring throughout. Carpeting and curtains, Alderman said, can trap odors from meals prepared in the in-room kitchenette, so the room will be easier to keep (and look, and smell) clean without them. That kitchenette, meanwhile, has a vinyl backsplash with a printed tile design that is easier to clean than real tile.

“The product is very good from a constructability standpoint,” said Fraser. “It can be implemented in virtually every region of the country in terms of the design.” The exterior walls have an undulating facade that fits code requirements from a range of municipalities in which ESA already has a presence or in which it is looking to grow. While the Gibsonton hotel is a straight line, others under way will be shaped like an L or a U as each project requires. The prototype is based on a 124-room property, but that number can go up or down as needed, Fraser added. “We've provided enough space in our mechanical room to provide for additional boilers if needed to supply the hot water should they decide to increase the room count.” 

The prototype is meant to work with both new-build projects, like the Gibsonton hotel, and conversions, so the guestroom layout can be adapted for different room sizes. Several double-queen rooms in the Gibsonton property have what Alderman called “pony” walls in between the beds, offering some measure of privacy for coworkers who may be staying together while on the road. Depending on guest needs, a room can easily go from two queen beds to a king and back again, Hollis said during a property tour, because both the headboard and the bed platform are movable.

Next Steps

At the new hotel’s ribbon-cutting ceremony—which new CEO Bruce Haase had to miss due to a medical procedure—Alderman told the gathered dignitaries and local franchise owners that the new prototype would carry the brand forward. The Gibsonton property is the first new-construction hotel built by Extended Stay America corporate in 12 years, and is the first of a planned schedule of monthly openings from the corporate division. 

Randy Fox, EVP of property operations, estimated 600 locations nationwide where the company would like to have properties in the coming years—and, he said, where customer demand is already strong. The brand now has 54 properties in Florida alone, and the newest property is the ninth in the Tampa-St. Petersburg metro area. Recent development in the Gibsonton community convinced the leadership that there would be demand for an extended-stay hotel, Alderman said. “We took a look and said, ‘Where's a burgeoning area of Hillsborough County where we can add onto?’ ’cause we wanted to continue to build up the west coast of Florida, both upon an owned basis and to allow franchisees to build as well.” The state, he added, is “just about the hottest market in the country that's reasonable to build in,” and reported an $18 billion gross domestic product increase in 2018. “In fact, it is the hottest market in the country that's reasonable to build in.” For Florida alone, the company has hotels slated for Port Charlotte, Palmetto and North Tampa in the coming months. 

Beyond Florida, the company will be focusing on growth in other Southeastern states as well as Texas and gaining ground along the West Coast. “There's no end to where we'll continue to put these,” Fox said, noting that by owning the majority of the assets, the company does not have to force owners to compete with one another for prime real estate. 

Alderman expects ESA to open 18 more hotels, and then let franchise owners drive the rest of the brand’s growth. “We believe we can double the size of the company, and emerging markets we're leaving almost entirely to franchisees,” he said. 

Ultimately, Alderman believes Extended Stay America has a firm grip on the midscale extended-stay segment—for now. “It's up to us to keep that customer,” he said. “We should be able to keep many, many more with 630 hotels between ourselves and franchisees. We have an ability to not lose them from market to market and that is incumbent upon us and our franchisees to make sure that we're servicing the guests and keeping the hotels clean and safe and making sure that everything works in them.”