Skift Take

La Quinta has been a success story and looks as though it still has a lot of runway.

La Quinta CEO Wayne Goldberg isn’t buying the multi-brand strategies of Marriott, Hilton Worldwide, InterContinental Hotels Group and Choice Hotels as they relate to the select-service segment and insists that La Quinta’s solo-brand strategy is the way to go.

Goldberg, appearing on CNBC April 9, said he frequently gets asked about perhaps launching a second brand but argued that the focus inherent in a single-brand strategy in the select-service sector is advantageous.

“All of the metrics would say it doesn’t hurt us, it will actually help us,” Goldberg said.

On the other hand, competitors such as Marriott International host several select-service brands, including Courtyard, Springhill Suites, and Fairfield Inn & Suites; Hilton Worldwide offers Hilton Garden Inn and Hampton, and the InterContinental Hotels Group trots out Holiday Inn Express, for example. Choice Hotels is represented by Cambria Hotels & Suites.

La Quinta fielded 867 properties with 86,500 rooms as of the end of 2014 and they were scattered across 47 U.S. states, Canada and Mexico.

Investors and franchise partners are attracted to the select-service segment because it is growing faster than others, has less volatility during downturns, and consumers see that’s where the value is, Goldberg said.

He said La Quinta is the fastest-growing select-service brand and has plenty of room for additional growth because it is only half the size of some of its major competitors.

La Quinta has a pipeline of 207 franchised hotels in the U.S., Mexico, Canada, Colombia, Honduras, Nicaragua, and Guatemala. Goldberg acknowledged that 30 percent of the properties in the pipeline are in Texas, where the oil and gas industry has taken a hit.

Goldberg said, however, that 60 percent of La Quinta’s business comes from the drive market so falling gas prices are actually a tailwind and not primarily a headwind.

La Quinta has seen its stock price rise about 35 percent since its IPO a year ago.

Goldberg argued that La Quinta, which is working on paying down debt to “4 times” for added flexibility, boasts an outlook that is “very positive.”

Here’s Goldberg’s CNBC appearance:

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Tags: la quinta

Photo credit: La Quinta CEO Wayne Goldberg is bullish about the select-service hotel sector and his company's single-brand approach. La Quinta

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