Wyndham Hotel Group is adding to its collection of midscale hotel brands with the $170-million acquisition of Minnesota-based AmericInn hotel brand and its management company, Three Rivers Hospitality, from Northcott Hospitality. AmericInn will become the company’s 20th hotel brand, adding to Wyndham’s portfolio of 1,500 midscale hotels.
AmericInn has 200 mostly franchised hotels comprising 11,600 rooms in 21 states throughout the U.S., primarily in the Midwestern U.S., Ohio Valley, Minnesota, Wisconsin, Iowa, Michigan, and North Dakota. It currently has 23 properties in its pipeline, and owns a total of 10 hotels. Wyndham will seek to eventually sell those 10 hotels in alignment with the company’s asset-light strategy. The deal is subject to regulatory and government approval and other customary closing conditions but Wyndham hopes it will close by October.
Why Wyndham Wanted to Buy AmericInn
Wyndham Hotel Group president and CEO Geoff Ballotti told Skift that Wyndham has been in talks with Northcott about buying AmericInn since 2008.
“What’s always impressed us about this great brand is their great quality. It’s so consistent. Over 85 percent of hotels are four stars or above from a guest satisfaction index. The TripAdvisor rating are at least four out of five stars. It’s a very strong leisure brand, and a blue-collar business brand, especially in upper Midwest where we’re looking to grow. Paul [Kirwin, president and CEO of Northcott Hospitality] and his team have done a great job growing this brand. We think we can continue to add value to Paul’s franchisees and owners by plugging this brand into Wyndham’s system, and giving them access to the size and scale of our hotel portfolio of 8,200 properties worldwide.”
Ballotti added, “The midscale segment is very attractive for us right now. It’s an area we’re most looking to grow in, which is why this is just a dream for us to be able to work with Paul and the Nelson family [who founded AmericInn] to convince them to sell this brand to us.”
The midscale segment is indeed an incredibly active one for the U.S. hotel industry. Last month, Wyndham announced the debut of its own upper-midscale soft-brand collection for independent hotels, called The Trademark Hotel Collection, and last year it acquired boutique lifestyle brands Fen Hotels, Dazzler Hotels, and Esplendor Boutique Hotels.
Other hotel companies have also invested heavily into the space most recently, including Red Lion Hotel Corporation’s (RLHC) rejuvenation of the Signature Inn brand, Trump Hotels’ new American Idea midscale brand, and the controversial Reverb by Hard Rock hotel brand, which RLHC says is a copy of its own Hotel RL brand. Most recently, Hilton also opened its very first Tru by Hilton brand in Oklahoma City. According to travel research firm STR, the Tru by Hilton brand is the single fastest new development brand in the history of the hotel industry.
No doubt Wyndham’s acquisition of AmericInn bolsters its own strength in the midscale and value-driven hotel segment, where the company owns a number of brands. They include Microtel Inn & Suites by Wyndham, Ramada, Baymont Inn & Suites, Days Inn, Super 8, Howard Johnson, and Travelodge.
According to Northcott’s website, AmericInn is currently undergoing a $75-million system-wide renovation initiative. Last year was the company’s most profitable year in its nearly 35-year history, with record revenues of $220 million and revenue per available room (RevPAR) growth of 1.2 percent. Average daily rate across the hotel brand’s portfolio last year was an all-time high of $94, and the company debuted its first-ever television commercial last year as well.
Northcott’s Three Rivers Hospitality management company currently provides hotel management services to 21 AmericInn properties, representing some 1,400 rooms. Northcott is a privately-held company whose other hospitality brands include franchisees of Houlihans, Perkins Restaurant & Bakery, and Nelscott Development Servics, and firm that handles construction and design development for hotels.
Wyndham’s Plans for AmericInn
Northcott’s Kirwin said the Nelson family and Northcott agreed to the sale to Wyndham primarily because it was a “strong financial offer” and that the timing worked, especially given current market conditions. He also said, “We’re confident Wyndham will be able to grow that brand nationally and then, hopefully, globally, as someone who’s developed American brands around the world. There might be a day when there might be 1,000 AmericInns around the country. I’m confident they will be able to do that. Given the current market environment, a sale is important in terms of driving more revenue to the hotels through loyalty programs and relationships with OTAs [online travel agencies]. We’re selling the brand to great sponsor and steward.”
While Ballotti said it’s “still early days” to detail exactly how the integration of the two companies will proceed and what leadership changes, if any, will be made, he assured AmericInn franchise owners that the brand would not be folded into any existing Wyndham brand.
He said, “Our focus will continue to be to maintain the quality that’s so exceptional that Paul and the team have created here with the AmericInn brand. If I’m a franchisee, and I’m paying a franchise fee, what does this [deal] mean in terms of my returns? It means access to the biggest distribution platform in the industry, our technology, sales, marketing, and most importantly, to our loyalty program, Wyndham Rewards.”
Until the deal is closed, things will remain “business as usual,” but Ballotti noted that one of Wyndham’s primary objectives will be to encourage AmericInn’s more than 600,000 Easy Rewards loyalty program members to join Wyndham Rewards.