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Tampa Bay Area
Business Observer Friday, May 20, 2005 17 years ago

Chain Plans Tampa Expansion

A national budget hotel chain looks at the Tampa Bay area market.
by: Adam Hughes Staff Writer

Chain Plans Tampa Expansion

By Gaurav Ghose

Staff Writer

A national hotel franchise known for its budget rates is conducting feasibility studies prior to awarding two franchises in Clearwater and Plant City. But if all goes as planned, the chain will soon enter the Tampa Bay area.

Microtel Inn & Suites, an Atlanta-based brand of U.S. Franchise Systems, has 11 hotels in Florida and another 12 under development, including four on the Gulf Coast at Fort Myers Beach, Fort Myers Airport, Lehigh Acres and Port Charlotte. Last October, it opened one in Zephyrhills in Pasco County.

"It takes about 60 to 90 days to complete the evaluations," says Jonathan Benjamin, vice president of franchise sales and development.

There is a lot of interest in the Tampa Bay area, which he called a "gold mine," and the interested investors are from Florida and other states, he adds.

Benjamin cites a study in which Tampa was tied for second place with Phoenix, Ariz., after New York City, in terms of projection for revenue growth in lodging.

For a metropolitan area like Tampa, which attracts all types of visitors, including tourists, business travelers and those who attend meetings and conventions, there is a need for a variety of price-point hotels, says Edwin Griffin, president and CEO of the Tallahassee-based Florida Lodging Association, and Microtel will fit in, serving the economy segment very well.

With land requirements starting at only 1-1.5 acres, Microtel allows developers to build and operate for less without sacrificing quality. Because every hotel is newly constructed, it is low on maintenance.

On the average, the hotels have 74 rooms of three different types: singles, doubles and suites. It has proved to be a very profitable business model in the economy/budget segment, Benjamin says, and it also caters to the secondary and rural markets, which makes it an attractive investment opportunity for developers. With 73% occupancy, the average daily rate in 2004, in the Microtels of Florida, was $60.

"We are like the Wal-Mart ... like the Southwest Airlines, in the lodging segment," Benjamin says, "catering to the same kind of demographics."

And with older and smaller hotels being torn down for condominium developments, Benjamin says it makes sense to invest in more hotels, and that does not mean it has to be on the waterfront. "With 65% of the traveling public known to stay in the economy segment," he says, Microtel will always do well. The hotel chain offers free high speed Internet and domestic long distance telephone calls. But "there are no chocolates on the pillow, no champagne, no plasma TVs, no frills," he adds, "We offer a very clean, comfortable and a safe environment."

Microtel Inns & Suites, with more than 275 hotels in 43 states and another 125 under development, has been ranked No. 1 in the economy hotel segment by J.D. Power Associates' Hotel Guest Satisfaction Study for the past three years and had received favorable ratings from the Entrepreneur Magazine. The company projects to have 400 hotels open by 2010.

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