LODGING brings you the first installment of our three-part Ownership Series, providing owner perspectives on various hot topics and industry trends. We speak with Damon C. Healey, managing principal of Eternal Companies, on the various ways that a brand can facilitate success in the extended-stay sector.
The extended-stay segment is attracting developers for three fundamental reasons: opportunity, performance, and longevity. Damon C. Healey was motivated by all these factors when he launched Eternal Companies in 2023 to acquire and operate economy and midscale extended-stay hotels nationwide. “I have a solid background in this segment through my previous work Brookfield Asset Management, which owned over 100 WoodSpring Suites,” said Healey, who serves as managing principal of the new company. “Once those assets were sold, I started my company and immediately knew that I wanted to focus on extended stay, primarily because of the trend of growth in the segment.”
Healey elaborated on the advantages of specializing in extended stay: “Over 70 percent of extended-stay properties are non-purpose-built hotels, and so that is a significant opportunity. And there are several trends that are pushing the space forward in terms of consistently positive metrics and KPIs, which is attractive. Extended stay is also an investment proposition that has long-term outlook, where we can build a business around it.”
But while extended stay holds great promise in these respects, the segment is also highly competitive with over 30 U.S. brands currently, and so franchisors must do their part to facilitate developers’ path to success. That includes providing a network of support, a straightforward conversion process, and an operating model that has proven its effectiveness in serving long-term guests.
Soaring to New Heights
When it came to developing his recently opened Suburban Studios properties in Columbus and Macon, Georgia, Healey drew support from Choice Hotels International’s SOAR (Supporting Ownership Access & Representation) program, which creates hotel ownership opportunities for underrepresented entrepreneurs. Part of the brand’s Diversity Ownership Initiative, which also includes HERtels, SOAR connected Healey with key brand executives including Stewart W. Bainum, Jr., Chairman of the Board of Directors; John Lancaster, VP, Emerging Markets Franchise Development; and Marcus Thomas, Emerging Markets Director.
“Hospitality is not a single-person sport; it’s a team sport, and you must have a solid team,” Healey said. “The SOAR program, particularly for me, came into play in terms of having those instrumental relationships. They believed in what we were trying to do, and they were with us every step of the way, in terms of identifying high-demand markets and then getting transactions completed.” Regarding extended-stay markets, “you’re looking for demand generators like universities, hospitals, long-term infrastructure expansion projects or major construction projects of any kind,” he explained. “In addition, you’re looking for housing growth to support relocations where folks that are typically waiting either [to move into] an apartment or a home to be built.” On the transaction side, “it has been a tough environment with high interest rates and construction costs, and Choice’s industry connections to financing partners have been a great help,” Healey added.
The Choice team also assisted Healey on the operations side with pre-opening management training and have remained accessible for any needed operational support. And they’re always available to consult on future projects. “We want to continue to grow. So, if there are opportunities that we identify, we work with them to ensure that we’re in touch with the correct development person that could support future acquisitions or development projects,” he said.
Expedient Conversion
The sooner a property opens, the sooner it can start on the road to performance. An expedited conversion process is thus a significant advantage for developers. “I worked with our local development representative to kick that off Choice’s Fast Track conversion process,” said Healey. “Once we acquired the hotels, it took us only about 30 days to convert from the previous brand to Suburban Studios.” That process included completing the required PIP items, getting the properties on ChoiceHotels.com and the OTAs, staff training, and implementing the choiceADVANTAGE property management system.
A Simple Model
For Healey, one of the keys to succeeding in the economy and midscale extended-stay segments is a straightforward operating model that “focuses on those long-term guests, be it the traveling nurses or the construction workers,” he said. “Those guests really just want a clean and simple environment where they can stay longer than they would at a nightly hotel, as well as value in terms of the rate so they can use that discretionary income elsewhere.”
He added that Choice has the experience needed to deliver an operating model honed to that guest profile. “When Choice acquired the WoodSpring Suites brand, they acquired a franchise business where they were able to learn what franchisees want, and they’ve extended that model to their other brands,” he said. “And so that understanding is very attractive.”
