Cobblestone Hotels' CEO reflects on 10 years of filling a niche

Brian Wogernese addresses the Cobblestone crowd on the first night of the company's brand conference.

MINNEAPOLIS — Brian Wogernese isn't quite sure how all of this happened. The president and CEO of Cobblestone Hotels just spent the past several days celebrating the company's 10th anniversary at the Radisson Blu Mall of America, and he reveled in the company's success at opening 90 hotels.

"When we started this, we couldn't find a brand in the midscale category that would go into the smaller communities in the U.S.," Wogernese said. "We had a small management company at the time, and we were thinking midscale but all we were getting were economy hotels."

Wogernese and his team identified a clear void in the market, specifically in Midwest markets with a population of 5,000 to 10,000 residents, and in 2008 the first Cobblestone hotel opened in Clintonville, Wis. The company owned its first four hotels before opening itself up to franchising, and it wasn't long after opening its 10th hotel that Cobblestone started receiving calls from small communities interested in courting the company for development opportunities. Now, Cobblestone's goal for 2018 is to open another 10 properties by the end of the year to bring it to a round 100 for the decade—a goal Wogernese said is well within reach.

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"I don't think 100 hotels is critical mass for Cobblestone, but it's a goal for us and the investors we represent," he said. "We want to hit 100 this year, and at the pace we're going I think we'll reach 200 properties in the next five years."

Fighting Giants

In terms of challenges, Wogernese said he dislikes when Cobblestone is compared to larger midscale brands. After all, the company's gradual growth is deliberate, he said.

"Most of our owners still have my cell phone number and I'm still personally taking all their calls, the good and bad," he said. "It's getting harder the more we build, but I'm hoping that we can keep this relationship even when we reach 300 hotels."

Currently, Cobblestone is leveraging its status as a smaller company. Wogernese identifies the relationship his company has with its owners as "hands on," which is an apt description. The company's brand conference is replete with inside jokes and candid remarks about Wogernese's baldness. When it came time to address property improvement plans, a perennial franchisee hangup, Wogernese answered groans from the audience with snappy reassurances.

"The point of this conversation is that at the 10-year mark, it's time," he said, generating laughter from those in attendance. "At that point you're either worn out or uglied-out. So keep in mind that ahead of year 10 we need to talk about what your plans are."

Cobblestone Hotels' Main Street hotel configuration is designed for larger markets, but will not become the brand's new focus. Photo credit: Cobblestone Hotels

Last year, Cobblestone opened 13 properties, adding 618 rooms to its system. Currently the company has eight hotels under construction and more than 50 properties in its development pipeline across 18 states, and the brand is in talks to break into two new states by the end of the year.

Worgernese, for one, can't believe it.

"Well, I don't think we ever had a dream of being in 20 states before," he said.

New Goals

The company also is continuing to expand its Main Street by Cobblestone project, which is an expanded building type designed for larger markets. The newest Main Street is under development in Neenah, Wis., near Cobblestone's corporate office and will serve as the company's training facility when it opens. These hotels average 55 to 60 guestrooms, slightly larger than Cobblestone's traditional 45-room design, and despite the company's interest in developing more of these properties Wogernese said this is not a major focus going forward.

"Is this our future? No," he said. "We understand our bread and butter, and we think that is what will drive us in the future. But we do think there is a place to increase Cobblestone brand recognition as people travel throughout the states. But I want to reassure you that small-town America is where we're from and where we'll be."

Wogernese is quick to point out that Cobblestone is willing to go wherever opportunities arise, but the company has a fixation with markets in Wisconsin, Pennsylvania, Colorado and Texas. This is no accident. Wogernese said that the company has yet to tap into the full potential of these locations.

"We will go anywhere, but what we're trying to do is fill in our core primary markets," he said. "That said, we're also building in Idaho, Louisiana and more. We like to put a spot on the map, and then let surrounding towns call us."

Cobblestone's biggest strength right now is that the company knows where it fits in, and is relying on its reputation to bring in new opportunities to grow organically rather than forcing itself into new markets. 

"This is the best opportunity for us," Wogernese said. "You need a compassionate touch for these markets. That's not to say larger brands aren't compassionate, because they are, but we are very hands on and we want to keep it that way."

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