THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Monday, September 16, 1996 TAG: 9609140505
SECTION: BUSINESS WEEKLY PAGE: 12 EDITION: FINAL
TYPE: Cover Story
SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER
DATELINE: CHESAPEAKE LENGTH: 115 lines
After Debbie Givens and her fiance moved from Tucson, Ariz., they needed lodging for a week or more before they could move into their new apartment.
But with Labor Day weekend approaching, the hotels they spotted from Interstate 64 were reluctant to give them a room for more than two days. And even if they could squeeze in, they knew the room rates would pinch their savings.
That's when the couple noticed the ``OPEN'' banner on Extended Stay America and even better, the words $199 a week. They made a beeline for the Chesapeake hotel.
Extended Stay America, an economy hotel chain, targets people like Givens and her fiance, Henry Nizynski. Instead of chasing after tourists, the Fort Lauderdale, Fla.-based company goes after a growing pool of roving workers: relocating employees, business travelers, contractors, consultants and others.
``The demand for extended stay - those staying for three nights or longer - is greater than the room supply,'' said Barry M. Stouffer, an analyst with J.C. Bradford in Tennessee. ``There is a lack of product.''
In Hampton Roads, Extended Stay saw the same demand. The region has a large population and mobile workforce, but no major chains offering extended-stay lodging at low prices.
The chain opened its first local hotel in Chesapeake's Greenbrier community last month. It also plans to open Extended Stays in Virginia Beach and Newport News, as well as Richmond and Roanoke.
Extended-stay inns have been around for more than a decade, but many of them have positioned themselves at the high end of the industry. In the mid-80s, however, a new breed of hotels opened, catering to more budget-conscious people.
The new extended-stay hotels generally offer efficiency rooms equipped with small kitchens and furnishings. To cut costs, they pare services guests might expect in a hotel. For example, the front desk might not be staffed 24 hours a day. Or, the glasses might not be covered in plastic wrap.
At Extended Stay America's 132-unit hotel in Chesapeake, guests get a fully furnished bedroom and kitchen, plus fresh towels twice a week and maid service once a week. Guests have voice mail, a coin laundromat and use of the office's fax machine.
The price is $199 a week, or about $28 a night. That's somewhere between the price of a one-bedroom apartment and a nice hotel. Plus, guests can save money by dining in.
Rick Callaway, who recently moved from Denver to work as Colonial Downs' director of off-track betting operations, is pleased. While he's looking for a townhouse or apartment, Extended Stay provides enough of the comforts of home.
``This facility is very neat and clean,'' said Callaway, standing in the doorway to his hotel room. ``I wanted something like this that had more for me.''
Although the Chesapeake hotel has been open for less than a month, it already has attracted a number of guests, said Glen L. Shanor, a district manager with Extended Stay.
``Some of them are in relocation situations,'' Shanor said. ``They've sold their homes and their new homes aren't ready yet.''
Others are in computer-related fields, engineers or project managers working locally. Extended Stay hopes to attract contractors and consultants for a number of local employers, including the Navy and Ford Motor Co., which has a manufacturing plant in Norfolk.
Extended Stay, founded in January 1995, might be new to the industry. But it has aggressively opened locations across the nation.
The chain, owned by Blockbuster Entertainment founder H. Wayne Huizenga, had 18 hotels as of Sept. 3. But it also has about 37 sites under construction and another 100 locations under contract.
Extended Stay, however, isn't the only one to rediscover this niche. Marriott International Inc., based in Washington, D.C., recently said it plans to spend $25 million building its first five extended-stay hotels. Its first hotel is under construction in Newport News.
Others entering the market include hotel chains Doubletree Corp. and Prime Hospitality Corp. Studio Plus, which now has about 27 extended-stay properties in the South, said it will rapidly expand to 100 locations by the end of 1998.
``In certain markets, I think you'll see too much product,'' said analyst Stouffer. ``But there are at least several more years of development before that happens. And we're seeing more segmentation, with some hotels offering higher prices and others, lower prices.''
For example, Studio Plus hotels charge between $35 and $50. Towneplace Suites, operated by Marriott International, will charge between $45 and $60 a day.
The higher the price, the more white-collar business the hotel will attract, said analyst Harry D. Venezia of Raymond James & Associates in St. Petersburg, Fla.
For example, Extended Stay attracts more people waiting to move into their new homes, Venezia said. A chain like Towneplace, which will offer bigger rooms and outdoor swimming pools, gets more consultants and workers on corporate expense accounts.
But some people can do without the little extras - and the higher prices.
``I don't like the maids bothering me all the time,'' said Givens, who ended up staying two weeks at Extended Stay. ``Any time I need towels, I just walk and get some . . . I like doing it myself.'' ILLUSTRATION: Color photos by Mike Heffner/The Virginian-Pilot
[Color cover photo]
[Home sweet Hotel]
[At Extended Stay America's 132-unit hotel in Chesapeake, guests pay
$199 a week, or about $28 a night....]
Contemporary
[Mark Williams, general manager of Layne-Atlantic...]
Comfortable
[Shanna Dickerson, right, a guest service representive....]
Convenient
[Extended Stay, founded in January...]
[Although the Chesapeake hotel has been....Glen L. Shanor. a
district manager with...]
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KEYWORDS: HOTELS by CNB