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The extend-stay hotel market was the darling of the pandemic as the majority of properties were able to remain open throughout. During the early months, extended-stay attracted essential workers, healthcare workers and others who needed to travel for work while much of the country was under lockdown, later in the pandemic extended-stay benefitted from drive-to-vacations.
Even before the pandemic, the extended-stay sector was an investor favorite as the demand is steady and the operating costs are lower than in full-service hotels. Earlier this year, Starwood and Blackstone cobbled together $1.5 billion to buy a portfolio of 111 extended-stay hotels. Seeing this kind of money go into one segment piqued our interest. So we turned to Eileen Ford, who runs Haines Hotel Services, a company she founded 15 years ago to specifically sell the extended-stay market.
An interesting business model, Eileen, and her team do the planning for their clients––anything from government and corporate personnel to construction and healthcare workers––at no cost. Instead, she takes a commission from the hotels, where she has negotiated volume discounts. She and her team are as involved as her clients need her to be, from negotiations to proposals, VIP upgrades and long-term stay packages. With this business model, Haines Hotel Services has carved a lucrative niche, closing more than $6 million in revenues annually. We chatted with Eileen to learn more.
Congratulations on 15 years! What gave you the idea to start your own business and focus on extended- stay?
I had my first child and wanted more balance and less travel so I could be present for my children. I wanted to be my own boss. After working in hotel sales for several big brands––Doubletree Suites, Homewood Suites, and Extended Stay America, I knew I really liked the segment. To me, extended-stay is the market for true salespeople. The follow-up has to be impeccable and you need to be available to your customers at a moment's notice. Things change constantly. It is not uncommon for me to take a call at 10 pm at night. Service, service, and service. So I thought I would strike out on my own to just focus on what I love most.
You offer a free service to your clients, how did you develop your business model and why did you decide to offer complimentary services to your clients?
Many third-party companies charge reservation fees. We do not do that and want to offer the best overall package for our customers with the lowest rates. They benefit from our volume discounts and my 30-year relationships and expertise in the hotel industry.
From my extended stay market experience, it had been considered the step-child of the industry (at least when I worked in that market segment in Washington, DC). How do you explain the change? How did it become the darling of the industry?
As the Vice President of one of the major chains we work with said, that has both full service and extended stay properties --"extended stay kept our hotel doors open and allowed us to bring the managers back that were laid off." It encompasses all market segments and that is why it survived COVID. Full service builds their base on meeting business that was very difficult during COVID, for obvious reasons. Extended-stay has less overhead and the revenue goes to the bottom line. That's why owners love it and hotel companies are trying to develop these properties.
Extended -stay has less overhead and the revenue goes to the bottom line. That's why owners love it and hotel companies are trying to develop these properties.
The extended-stay market had already gained a lot of momentum pre-COVID and became the pandemic's bright spot within the hotel and lodging industry, do you think it can keep up the momentum and continue to out-perform other sectors within the hotel industry?
Yes, it is its own entity and doesn't rely on group gatherings, conferences, or food and beverage. Their biggest challenge to overcome this year is the labor shortage. It has been very difficult in that part of the industry but I am already seeing huge improvements in the last month.
Where do you see the extended-stay market headed over the course of the next 5-10 years considering all the attention it is receiving from investors?
I think you will see huge growth in the "middle" extended stay market. There are areas in the US that are still missing true extended stay hotels where there are huge demands. Just ask me I will tell you where, LOL! More is needed so we can have the supply and competitive rates.
The hotel industry is rallying post-Covid, have you noticed any specific trends for extended-stay?
Extended-stay needs to go back to being extended-stay. I think everyone was so nervous going into this year that many of the extended-stay properties took more full-service groups (ie: sports groups, weddings etc) than they normally would have. I have noticed many sold-out weekends because of events. Our extended-stay brands need to remember the value behind a solid extended-stay base. When I opened my Homewood our goal was for at least 60% of the hotel to be the extended-stay business. We were at 85% and above. With an extended stay base studies show fewer supplies need to be purchased and more money goes to the bottom line. I think we will be back to that focus soon. We will have to if we want to sustain a true extended stay model in the industry. It equals more profit to the owners.
Recognize and celebrate staff that worked hard over the last two years. I have noticed the challenges with the labor shortage and very dedicated managers wearing many, hats. It is time to bring staff back so we do not lose these talented employees. Not sure if this is a trend, but we are back in business and it is great news for these awesome hoteliers that worked so hard. I will never forget a call I got from a very hardworking DOS at the heart of COVID--going over and beyond to land one of my long-term groups--"please tell me what I can do to get this group we need to bring our housekeepers back." His extended stay model was running more like a full-service hotel because of the high-end corporate business and when offices closed his hotel almost did as well. He got the business and he never let me down. Many times, going in on the weekends, personally checking my rooms and taking evening and weekend calls. I was so proud to partner with such a professional. We have to keep the extended stay hotels just that extended stay.
Where do you see the extended-stay market headed over the course of the next 5-10 years considering all the attention it is receiving from investors?
I think you will see huge growth in the "middle" extended stay market. There are areas in the US that are still missing true extended stay hotels where there are huge demands. Just ask me I will tell you where, LOL! More is needed so we can have the supply and competitive rates.
What does the next 5-10 years look like for Haines Hotel Services?
I would like to continue with the extended-stay market. I love my hotel partners and really, really love my clients. They are like family to me. I would not mind adding more staff, I have two employees who I am very proud of. They are working Moms like me, and are two of the most focused and hardworking people I know. I also have begun working with many new clients this year and look forward to continuing to grow. I am also beginning work on a branch of HHS called Haines Hotel Destinations to incorporate our love of travel and unique hotels. As soon as our time is not stretched so thin, we will begin progress on that new venture.
