GlobeSt.com recently spoke with Gina-Lynne Smith, president of Value Place Franchise Services about the extended-stay forecast, a forecast that continues to be cautiously optimistic. Smith's company, Value Place, is an economy extended-stay lodging and short-term residential property brand that features affordable rates. The Value Place brand comes from the management team that created developed lodging brands such as Residence Inn (now owned by Marriott), Summerfield Suites (Hyatt) and Candlewood Suites (Intercontinental).

GlobeSt.com: How did the extended stay industry fare in 2009 and what your forecast for 2010?

Smith:The extended stay industry simply hasn't seen the declines in occupancy and RevPAR that traditional hotels have during 2009. I expect that extended stay hotels, particularly those in the economy segment, will continue to outperform conventional hotels. We are cautiously optimistic for 2010. We believe Value Place has proven to be a recession-resistant product. With 164 all new construction properties from coast-to-coast, results vary by property, but since January, average system occupancy is up 10 points over the same time last year. We are working strategically to maintain and further increase this growth.

Are you seeing more travelers choosing economy, extended stay brands over some of the more traditional options? Why?

Smith: Extended stay properties generally even out cash flow for investors and most have lower expenses than traditional hotels due to more efficient staffing models. For example, a 124-unit Value Place property operates with only four to five full-time equivalent employees versus a traditional property of the same size which would likely employ 20 or more full time team members. Additionally, offering a clean and secure, national, economy extended stay product, Value Place has found the product to be largely recession resistant. Solid financial performance, efficient building costs along with branding and a good balance sheet leads to more success in financing…which is critical for investors who want to expand their businesses today.

GlobeSt.com: How are you finding financing?

Smith: Most are financing their programs by approaching local community banks where they have established relationships. Other financing sources include the new USDA Program and SBA financing. Both of these programs work well with Value Place as our investment is under the program limits.

Are you finding better real estate deals these days? What types?

Smith:Absolutely. We are finding that most land owners are very reasonable in their view of real estate values at this time. When prospective franchisees can't come to agreement with a land seller on the value of the land, it has been pleasantly surprising how many land owners have approached the franchisees about joint ventures or have contacted Value Place directly to franchise on their own.

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Natalie Dolce

Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.

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