For Vantage Hospitality, a year of fine-tuning pays off

LAS VEGAS - 2014 was a watershed year for Vantage Hospitality Group, highlighted by its acquisition of America's Best Franchising and the company's brands, including Jameson Inn and America's Best Inns. If last year was a year of expansion for Vantage, 2015 has been a year of fine-tuning, which, as the calendar moves ever closer to its end, will position Vantage as a powerful player in the economy and upper-midscale spaces.

With a total of 1,221 global hotels currently, spread out across nine hard brands and one soft brand, it's hard to argue against Vantage's strength now and potential still to come. Such was the backdrop for the company's annual conference here at the Hard Rock Hotel Las Vegas, a gathering of the company's members and executives to discuss where the company sits now and where it's going.

As a membership organization, Vantage has always operated under the maxim that individuals stand alone, but Vantage stands together, as the company's founder and CEO Roger Bloss explained.

While the hotel industry continue to push boundaries and set industry fundamental records, those in the industry also know that a downturn is imminent and inevitable. When, then, it does come, owners can't be caught flatfooted. In that vein, Vantage executives implored members to invest in their properties now. "Take action today, for tomorrow," said Vantage COO and CFO Bernie Moyle. "The dollars you invest now will lead to higher revenue."

"We are probably at the peak," Bloss added. "At that seven-year cycle. So, today, put money in your property. Own your street corner."

In addition to making capital improvements now, one of the themes of the conference was competitive intelligence; namely, using Vantage's network of programs to improve ROI. That, in addition to, reporting numbers to STR. According to Jesse Ostrum, Vantage's VP of revenue management, well less than 50 percent of Vantage hotels report their data to STR. "Without data and intelligence, you are guessing," said Ostrum.

Integration and OTA Management
Though America's Best Value Inn is Vantage's core brand, the company is focused on growing its upscale Lexington product along with the Jameson brand it acquired last year from ABF. It's all part of the ongoing ABF integration, as Bloss noted. For instance, by its own admission, the company overestimated the Country Hearth Inn & Suites brand. "Under prior ownership, it had been downgraded," Moyle said. "This isn’t what we thought it was."

What Vantage is doing now is looking at the Country product in the market and deciding whether if it's of a certain quality, to move it up to Jameson or to put in the economy space as an ABVI.

Likewise, it's evident that Vantage would rather absorb the America's Best Inns and Suites brand into one of its other brands than to keep it around on its own. While Vantage won't stop supporting owners of the brand, it is trying to persuade them to convert to another Vantage brand.

On the flip side, Vantage is in the midst of reinvigorating the Signature Inn brand, which it, too, acquired from ABF. While the brand has been dormant for some time now, Vantage, through discussions with owners, found a gap in the upper-economy segment, which it will look to fill with the boutique-minded Signature brand.

In a rare, unique moment, Vantage gathered members in a session to discuss the brand and its hallmarks, taking feedback from members that it will use to fine tune, craft and hone the brand. 

"It's exciting," Bloss said, noting that the brand is really being built out and embraced by the younger generation, the children of Vantage's current owners who are now getting into the business, but are looking to own and operate something different than their parents. "It will fit with highest end of economy, head to head with brands such as La Quinta and Fairfield."

Two Signature Inns have already been signed in Houston and development will be a mix of conversions and new builds. 

Meanwhile, on the OTA front, Vantage's language has been less vituperative and more accommodating to OTAs. The theory being that when you have more scale, which Vantage, today, has, you are able to negotiate better terms. 

"Now that we have more brands and properties, that helps in negotiations with [the likes] of Expedia," said Vicki Schell, Vantage's VP of distribution. "Revenue up, margins down."

"We had a successful year lowering OTA rates," Bloss added. "Size matters. Today’s world is about distribution and size."

Added Moyle, "OTAs are not going away, so how do we work with them? Margins are coming down. I’ll sell all day on a 10-percent commission."

Still, educating consumers to book direct is still a top priority for Vantage, particularly in the face of spurious rogue booking websites that prey on the misinformed. 

In 2016, Vantage is also expecting more and higher engagement on its mobile platform and is currently at work on a fully integrated technology platform, said Deb Lambert, Vantage's e-business director. 

Up and Away
A focus on the upmarket Lexington brand will also permeate 2016. "We are focused on new development networks. Investing in bricks and mortar," said Mark Williams, Vantage's president of upscale brands. 

"Lexington needed to penetrate more markets in strategic locations via its new prototype," Bloss said. There is currently a new-build Lexington underway in Fort Lauderdale, Fla., and one recently opened in Effingham, Ill.

Meanwhile, the conversion of a former Wyndham in Jacksonville, Fla., to a Lexington will serve as the flagship Lexington property for Vantage, which acquired the 323-room property in June for a reported $9 million. It's currently in the throes of an 18-month renovation.

Internationally, Vantage continues to grow. In April, it entered into an exclusive master license agreement with Miraya Hotel Management to introduce the Value Inn Worldwide and Value Hotel Worldwide brands to India, with an ambitious plan for 100 hotels within the next five to seven years. 

Loyal Following
Another initiative Vantage is working on is a loyalty program, which it hopes to launch by late next year, dependent on member acceptance. The program would unify all of Vantage's brands, noted Lambert. A Vantage Rewards steering committee made up of owners is currently being formed.

The program would have a mix of instant rewards and points.