Raj Trivedi, EVP and chief development officer for La Quinta Inns and Suites, has been with the company since 2000. In his time, he has seen the company operated as both a public and private entity. La Quinta operated as a public company from 1973 until January 2006, when it was acquired by Blackstone Group. Now it’s back as a public company, and looking to grow its footprint, inside and outside the U.S. If its second-quarter earnings were any indication, it’s well on its way to achieving its goals. Here’s what Trivedi had to say about his company as it moves through 2014 and into 2015.
1 Since its IPO in April, La Quinta has had consecutive strong quarters. Is there anything particular you can point to that has been the underlying reason for the hot streak?
This company is driven by two things: making sure guest expectations are met or exceeded and that our franchise partners receive the best support so they can attain great market share. Those are our goals that we focus on. Yes, we continue to make sure our product quality is maintained, and spend capital there. Growth needs to come from RevPAR at or about market rate and we need to take advantage of the growth cycle, have franchise growth and open more hotels.
2 La Quinta reportedly opened 24 hotels in the first half of 2014 and about 25 more are expected in the second half of 2014. Did/does this growth meet expectations?
It not only meets, but exceeds expectations. We are at the top in active pipeline numbers. That shows we are on the top chart of growth. We have 190 properties in the pipeline currently, and 25 to 30 percent of our pipeline opens on an annual basis. We are going to meet our expectations by opening 45 to 50 hotels during 2014.
3 What locations in the U.S. do you still feel underrepresented in, which locations that you aren’t already in do you want to be in and which have the best chance for success given the market?
When it comes to Latin America, I think we are ahead of our competition. In the U.S., we do have a presence in many markets, but can increase the depth of our presence in those markets and enter new ones. If you look at it historically, we focused on states where we had a strong presence, and went outward from there. Today, La Quinta has a presence either open or in the development pipeline in 47 states. That shows we are not a regional chain. We have nearly 850 hotels open. If you look at our comp set, we are third largest after Hampton and Holiday Inn Express.
4 In the second quarter, La Quinta executed three franchise agreements in two new countries—one in —and more than 10 percent of your pipeline is outside the U.S. How important is Latin America to you and what other international pockets are you looking to grow in and why?
The anchor for our growth is the bordering countries, specifically Mexico, where the La Quinta name is recognized. Latin America and South America are economically growing at a rapid pace, so when it comes to brand introductions, it makes sense to go into those markets. But we make sure we’ve established a strong footprint in Latin and South America prior to considering any other international market.
5 La Quinta plays in the midscale segment, but watches the movements of economy hotels. How does what the economy segment does—in terms of pricing, specifically—influence La Quinta’s movements?
The reality is this: The brand has representation that allows us to compete at every street corner effectively, regardless of the competitor. In fact, 7 percent of La Quintas are qualified to compete against luxury brands. It comes down to whom you have next to you. That is what defines it. All segments are now showing growth, including economy, which means that the entire industry is performing at a higher level.
6 Can you point to a recent opening or deal inked that excites you and why?
Being a CDO is like being a father: Every child is important and every deal is exciting. Any new hotel that comes into the system excites me beyond belief. When we go into new markets, that excites you a little more; it’s a testament to hard work. When we sign a deal where we don’t have penetration, it gives me great joy.