LodgeWorks LP: Under Funded Serial Hotel Brand Creator?
I’m sure not too many people have heard of LodgeWorks, LP, or even the two men behind it – Rolf E. Ruhfus, and B. Anthony Isaac, but I’m sure you’ve heard of the hotel brands they’ve created, and subsequently sold – you know, small, local brands (sense the sarcasm) such as Residence Inn, Summerfield Suites, and Sierra Suites Gen 1 (now known as ‘Extended Stay Deluxe’, owned by the Extended Stay Hotels Company). Now, Ruhfus & Isaac are doing it again – creating two other brands named Avia Boutique Collection & Hotel Sierra, in addition to Sierra Suites Gen 2 (whose development seems to have stopped), and a few other random hotels.
Here is a list of their current hotels
First, let me give you a quick background on LodgeWorks, then I’ll delve into why I think Avia & Hotel Sierra has the potential to be hugely popular (but won’t), and then probably be bought out by a big hotel chain (hey- it’s happened to them three times already, why should they stop now?). Before LodgeWorks, LP was formed in 2000, Ruhfus & Isaac were partners who pretty much created the Extended Stay hotel category with Residence Inn – Residence Inn was the first extended stay hotel brand, with multiple locations; they realized that business travelers would like a hotel which reminds them somewhat of home – kitchen facilities, including silverware dishes and a few cooking utensils, and those who would utilize those hotels would pay a premium, as well as stay longer than the usual few nights, thus, extended stay hotels could have less employees on staff (since there wasn’t as much turn over of guests) as well as make more per night with the higher room rates.
Residence Inn was sold to Marriott Corporation in 1987 and Residence Inn is now is the largest Extended Stay brand in America. Soon after Residence Inn was sold, in 1988m, Ruhfus & Isaac created another hotel brand – Summerfield Suites, whose claim to fame at the time was having two-bedroom, two-bath suites (apparently unheard of at the time).
In 1996, LodgeWorks created the Sierra Suites (Gen 1) brand, and in 1997 sold both the Summerfield Suites & Sierra Suites brands to Wyndham International. Wyndham renamed Summerfield Suites as “Summerfield Suites by Wyndham” and kept the Sierra Suites name seperate from the Wyndham name. LodgeWorks continued to build and operate a number of Summerfield Suites by Wyndham hotels as well as build another 15 Sierra Suites throughout America, while simultaneously developing Gen 2 of Sierra Suites, which was a more upscale extended stay hotel.
Finally in 2005, LodgeWorks sold 15 Gen 1 Sierra Suites to Extended Stay Hotels, which renamed them Extended Stay Deluxe, and continued to develop their Gen 2 Sierra Suites.
In the meantime, the brands that LodgeWorks originally created – Summerfield Suites, was purchased by the Blackstone Group with Blackstone’s purchase of Wyndham, and then sold to Hyatt in 2005. The Sierra Suites Gen 1 hotels were rebranded as Extended Stay Deluxe hotels, and integrated into the Extended Stay Hotel company, which was also owned by Blackstone Group – earlier this year Blackstone sold the Extended Stay Brand to the Lightstone Group; and Residence Inn continued to grow into the largest extended stay brand in the country under Marriott’s leadership.
Lodgeworks didn’t stop there – they then started the next generation of Sierra Suites (Gen 3?) – called Hotel Sierra, the first one which is scheduled to open this month in Washington DC, with another 8 Hotel Sierra’s in development. Not being one to rest on their laurels, LodgeWorks created ANOTHER hotel brand – Avia Boutique Collection, a luxury boutique brand which they have 6 hotels in the pipeline for.
Whew.. Did you follow all of that?
Hotel Sierra is an all suites hotel which is offering a more luxury, and sophisticated hotel stay. They are providing complimentary breakfasts, business centers, “luxury SUV shuttle service”, as well as free wired and wireless internet. What differentiates Hotel Sierra from other Suite hotels is the contemporary, modern design which can be found everywhere from the table top to the bed linens – its the type of differentiation that element will also offer.
Hotel Sierra Rendering
Avia Boutique Collection is being marketed as a boutique hotel brand, and it seems to be following the same type of design look and feel that Hotel Sierra is based upon – except for the fact that Avia is not a suites hotel. Avia does not include a kitchen nor multiple rooms like Hotel Sierra does; but once again – it will differentiate itself by some rooms having working fireplaces, soaking tubs, and olive wood floors. Wow! Each hotel is also supposed to have local touches, an important facet that should be part of every boutique brand – but I think the industry is losing that and instead calling any hotel that is modern, classy, or contemporary a boutique brand.
Avia Boutique Collection Rendering
Avia Room Rendering
There is no word yet on the projected price point of either hotel, nor the development forecast of either hotel. It is interesting to point out that the Hotel Sierra properties all seem to be located within mixed use projects and are being constructed under a license (and I would assume partially owned by) by a developer – yet both brands do not seem to be franchised, only licensed.
It’s very surprising that LodgeWorks isn’t focusing only on their own brands – they are also building two alofts, three Hyatt Places, and currently own a Hilton Garden Inn and nine Hyatt Summerfield Suites.
The question is Why?
Why is a company which has had so much success launching (and then selling off) hotel brands both establishing an additional two brands from the ground up – as well as actively building and developing hotels under competitive flags? Why has LodgeWorks, LP not promoted the Hotel Sierra & Avia brands like Starwood promotes element and aloft, or Hyatt Place and Hyatt Summerfield Suites is promoted? I think it is due to LodgeWorks, LP not being a public company, nor does it have the major backing of either an extremely wealthy family, or private investment firm they are severely limited in how quickly their concept it can be replicated by the developer community. But the bigger question I have is why is LodgeWorks not franchising their brands to ease further growth and increase developer interest?
The fact that LodgeWorks has two great concepts, yet are still developing brands from other flags is confusing because its almost as though they do not have the confidence in their own brands, or don’t feel as though the brands will be successful.
In LodgeWork’s Development Brochure they state the following:
LodgeWorks, LP is a seasoned hotel management and development company in the midst of exciting growth. Our portfolio encompasses a soon-to-launch luxury boutique collection – Avia; a strategic refresh of Sierra Suites Hotel to a boutique-inspired (upscale suite brand) Hotel Sierra; and a growing portfolio of other branded product.
It explains perfectly what LodgeWorks is up too – but it doesn’t answer the question – why are they developing their own brands, while simultaneously building and operating brands from the competition
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Category: construction, Hotel Development, hyatt, lodgeworks, marriott, real estate, Starwood Capital Group, Starwood Hotels, wyndham hotels
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Great synopsis. I know that they had all their employees read good to great and are still searching for the hedgehog concept or at least that’s what they told their employees. I think you and they know what it is that they are good at. Creating/Building/Managing a great product and selling it to someone who can make it grow and has the funding behind them. Look at their website and you’ll see the same Hotel location listed for years.
You’ll also see that they are more focused on profits than the people and culture that made them a small yet desirable company to work for. I understand that they operate no different than a public company and only care about how much money each of the partners can make.
Very talented group, but like all good things must come to an end. You’ll also see that the founder and CEO is less and less visible and turning his reins over to money hungry wolves which once used to be visionary and pioneers.
They have small money and looks like they can only fund two hotels a year if they are lucky.
Good blog !