Extended Stay America President and CEO Jonathan Halkyard shared details of the company’s first new-build franchised hotel and where the company stands in its five-year development and growth plan.
LOS ANGELES—Extended Stay America is halfway through its five-year development and growth plan to grow its franchise business, and President and CEO Jonathan Halkyard is confident the company is moving in the right direction to execute its goals.
In a video interview held during the Americas Lodging Investment Summit in January, Halkyard shared that the company was planning the groundbreaking of its first new-build franchised hotel. The 92-room Extended Stay America broke ground 6 February in Colonial Heights, Virginia, about 20 miles outside of Richmond. The franchise is being developed and managed by KARA Hospitality.
“We have sold hotels (out of our portfolio) and those owners are now franchisees, but another important part of the strategy was to develop new franchisees of our company who would build their own hotels,” he said, citing the Colonial Heights property as something very exciting for Extended Stay America.
In the above video, Halkyard also mentions the company’s progress acquiring new real estate sites for additional properties.
There are 627 ESA hotels open in the U.S. The company’s real estate investment trust subsidiary, ESH Hospitality, owns 554 of those hotels, while ESA manages or franchises the additional 73.
“When I became CEO about a year ago, I laid out three objectives,” Halkyard said. “One, we wanted to simplify what we did at the company. The second was to focus on the core extended-stay guest. … And the third is … to accelerate development. We’ve made progress on all three of those.”
Overall, Halkyard said he continues to see lots of opportunity for true extended-stay and the hotel industry in general.
“A lot of people came through December of 2018 a bit shell-shocked because the equity markets were so tough, as were the debt markets,” he said. “But as tough as they were in December, they’ve come back strong in January. So I’m bullish about 2019.”
Innovation remains challenging for the industry at large, he said.
“We can’t take for granted that the demand will be there, that our product will be sufficient,” he said. “So I think the pressure of continuing innovation and running our companies effectively, that’s always going to be the challenge.”