Comments on: Hyatt Selling Microtel & Hawthorne Suites (aka USFS)

By: Doug Easterly

Doug Easterly — Sun, 27 Apr 2008 00:09:29 +0000

EDIT TO ABOVE: Hyatt sold the chain to Country Hearth Inns (not Country Inns) – just neglected to type Hearth..Still, it is a wholly owned subsidiary of America’s Best Franchising which runs Country Hearth and America’s Best Inns as separate entities under the America’s Best Franchising company.

By: Doug Easterly

Doug Easterly — Sun, 13 Apr 2008 19:25:46 +0000

Andrew, I would say Wyndham is a better purchaser because Choice has EVERY segment well covered! I forgot to mention that USFS Microtel brand REQUIRES all its hotels to be new construction. In 1998, in response to a chorus of owners who wanted to join Microtel (and specifically Mike Leven who is well known as a fair franchisor in the industry) but couldn’t because they had existing hotels, Mike Leven engineered the purchase of the Best Inns chain (now America’s Best Inn) which at that point had only about two dozen properties and used this platform as a “conversion” brand for other operators who wanted to switch to USFS in the economy segment. I believe it was last year that Hyatt sold that brand to Country Inn & Suites (parent company now called America’s Best Franchising) which runs it as a wholly owned subsidiary. Hawthorn accepts conversion properties if they meet the standards but most of the operators who wanted to reflag to join USFS fell into the economy segment, but couldn’t join as a Microtel becasue they werewn’t new build. Why doesn’t Microtel take the easy way out and accept rebrands? Well, a provision in the franchise agreement (since day one – great idea!) states that if Microtel EVER accepts a non new construct into the system, all the Microtels open before that date can retain their affiliation with Microtel BUT don’t have to pay any royalties going forward. A Louisville Slugger if you ask me!

By: Andrew Calvo

Andrew Calvo — Sun, 06 Apr 2008 20:24:10 +0000

Doug – thanks for your insight into USFS. I never was aware of its history prior to being purchased by Hyatt. Prime HOspitality was purchased by the Blackstone Group – and was split up, Amerisuites going to Hyatt and the Wellesley Inns either being converted to La Quintas or taken out of the system, then the Prime Hotel & Resorts were converted into LXR Resorts additionally some other hotels were converted into Extended Stay Hotels – and that brand was recently sold to the Lightstone Group – so I do not think that there is really anything remaining from Prime Group’s sale to Blackstone – most everything has been sold or rebranded.

But – in today’s market, I can see someone like Choice or Wyndham purchasing it – those are two companies that are more franchise owners than actual hotel owners/operators, and already have a great standing and understand of the economy segment.

By: Doug Easterly

Doug Easterly — Sun, 06 Apr 2008 20:13:39 +0000

Andrew, that is a good question. I have stayed at many Microtels and a few Hawthorns in my day. Actually just styaed at a new Microtel (opened 3/4/08) in Port Charlotte, FL. I think it would be an interesting pickup for the entity was called Prime Hospitality out of Fairfield, NJ (what is its name now?)..Hyatt bought it because the industry was into multi-tiers at that point, trying to cover all bases and a Hyatt bigwig was a personal friend of USFS founder Mike Leven. At the time, USFS was struggling with its stock price and was ripe for a hostile takeover and Hyatt bought it 100% but kept the management team of Leven & company and let them run it as a separate group. Now finally kicking in, with over 300 open or under construction. Hawthorn has kind of always lumbered around 125-150 units but has a brand new one under construction set to open in summer in West Palm Beach, FL