Staybridge Suites looks set to expand in the UK, after a deal last week with a joint venture between Cycas Hotel Partners and Patron Capital to acquire two hotels in Stratford, East London, one of which will open under the brand.
The agreement, with Westfield Stratford City, will, hopes the jv, herald the growth of the extended stay product, three years after the brand debuted in the UK in Liverpool.
At the time of the initial opening in 2008, which was followed by a site in Newcastle in 2009, critics maintained that the UK was simply too small to sustain an extended stay brand. Workers on secondment would, it was held, stay during the week, but then simply drive home at the weekend.
However, John Wagner, director at Cycas Hotel Partners, the operating arm of Patron Capital, was confident that the Stratford site would kick-start the brand again. He told Hotel Analyst: "It's the first in London, but the brand has needed the visibility and credibility of having a London hotel to support the other two. In Stratford the corporate travel will pull from the City and Canary Wharf as well as Stratford City itself. There is also the leisure activity from the O2 and Olympic Park.
"The opportunity to be open and a part of the Olympics and the Olympic legacy, will give these hotels a head start in introducing a new standard and in the case of Staybridge Suites, a new concept, to the growing east London neighbourhood."
Having secured the Stratford property, Cycas Hotel Partners is now looking at sites in Continental Europe, in locations such as Prague and the Netherlands, but Wagner said that 80% to 90% of the group's efforts would be focused on the UK, where,10 years down the road he anticipated 40 to 50 hotels, with as many as 10 inside the M25.
"In every big dot on the UK there's going to be a Staybridge and on the really big dots, there could be multiple hotels," he added.
Demand for the hotel's rooms is for between a week and a month, with anything over a month is more likely to go to the serviced apartment market, Wagner said. However, the Staybridge Suites in Liverpool, which the group also owns, has seen stays of up to nine months.
The jv has an agreement with InterContinental Hotels Group for development of the brand across Europe, a deal brokered through Wagner's connections with IHG, where he was vice president of Staybridge Suites for EMEA. Wagner founded Cycas Hotel Partners in 2008, around the time of the Liverpool opening, with Cycas Capital BV, the investment banking boutique specialising in Pan-European real estate, based in The Netherlands.
Cycas Hotel Partners' core strategy is to acquire, develop, manage and operate a diversified portfolio of newly developed branded extended-stay hotel investments in Europe. The addition of the Holiday Inn at the Stratford site was seen by Wagner as complementary the Staybridge Suites hotel.
At the time of that opening, IHG said that it was confident of the brand bridging the gap between conventional hotels and serviced apartments and planned to sign up 22 more Staybridge Suites in the UK by 2010. These would include properties in London, Newcastle, Glasgow, Birmingham, Cardiff and Farnborough.
The recession nixed those plans, not only through a lack of development finance, but also potential guests. Wagner forecast at the time that the customer split would be 80% business and 20% leisure. The return of the business traveller is encouraging for the brand, which is currently at 184 hotels, with 100 in the pipeline after its launch in 1997. Wagner was confident of demand for extended stay in the UK and anticipated that Staybridge Suites would even have competition in the future from other flags.
HA Perspective: The extended stay concept is long established in the US and it is tempting to say what has worked there will work in Europe, a similar market after all.
But as any veteran commentator on Europe's hospitality market will tell you, the roll out of US hotel brands has happened much more slowly than anticipated, sometimes hardly at all.
Coupled with the challenge of this inertia is establishing what is a new segment. It already exists to an extent with Ascott's brands such as Citadines already a fixture in many European cities. The difficulty is that Ascott, which describes itself as the largest international serviced residence owner-operator, appears less than keen to embrace the extended stay moniker preferring its focus on the serviced apartments label.
For extended stay to truly flourish in Europe it needs champions other than just IHG. So far, there are few signs of interest among IHG's rivals.