LAS VEGAS — New La Quinta CEO Keith Cline wasted no time in assuring franchisees that the brand is well positioned for future growth—and is putting up its own money as guarantee. So set the backdrop for the company's 2016 conference, which opened this week here at The Cosmopolitan Las Vegas.
According to Cline, who was officially promoted to the position of president and CEO on February 19, after acting as interim CEO in the wake of former CEO Wayne Goldberg's departure from the company in September, the company will invest $120 million toward hotel renovations this year, a strategy to eventually position the brand in the upper-midscale market. According to STR, La Quinta is positioned as a midscale brand.
"We intend to make certain physical assets support that," Cline said.
Pipeline and Development
La Quinta signed 107 new franchise agreements in 2015—its largest number of signings since the economic downturn of 2008.
La Quinta also expanded into new markets, with Cline specifically pointing to the brand’s growth in New York, Pennsylvania and Oregon. The franchise pipeline, as of the end of 2015, stood at 228 hotels with 20,500 rooms—again, the highest since 2008.
In the fourth quarter, La Quinta opened 19 franchised hotels with a total of 1,600 rooms, including the brand’s seventh property in Mexico and its first in Alaska. Only Delaware and Hawaii are left for the company to have a presence in every state of the union, Cline noted.
Seven new “key agreements” were signed for Mexico in 2015, and Cline noted Colombia, Nicaragua, Guatemala and Chile as having a strong presence in the global pipeline. Expansion, he said, would focus on high-RevPAR markets.
At last year’s conference, La Quinta revealed its Del Sol prototype, which launched officially the following May in College Station, Texas. Two more hotels following the prototype have opened since, Cline said, and a full 19 are under construction.
The company also completed a $100-million share repurchase program, acquiring a total of 6.3 million shares, and repaid $153 million of long-term debt in 2015, including $135 million of voluntary prepayments.