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On The Bright Side

The site of this year’s La Quinta Inns & Suites annual conference is New Orleans and it is there,

nearly 12 years ago, where two of the company’s top executives met for the first time, marking an important turn-ing point for the brand.

Prior to 2000, La Quinta had carved out a niche in the Sun Belt catering to cost-conscious business travelers. When Francis “Butch” Cash became CEO in April 2000, he wanted to take La Quinta national using a franchising model to greatly expand the company’s portfolio.

To bring the vision to reality, Cash made two key hires, bringing in Wayne Goldberg as Group Vice

President of Operations and Rajiv Trivedi as Vice President of Franchise Operations.

Goldberg, who spent 21 years helping to build a franchising model for Red Roof with Cash, had been on the job at La Quinta for two weeks in 2000 and was in New Orleans when he met Trivedi, who honed his franchising chops with Cendant and had been on the job at La Quinta for one week.

“[Cash] realized that for a brand to grow and remain competitive, you

have to grow through franchising,” Trivedi said during an interview in January from the La Quinta head-quarters in Irving, Texas. “We made a commitment to choose the right partners, to choose the right location, to choose the right property, and to create consistency for the brand and the product.”

“We launched the franchise program at Red Roof and we made a lot of mistakes,” Goldberg said. “We made a conscious decision to do the same thing here but better. We were going to learn from our mistakes and not repeat them. When Raj came in, he was able to help us not make those same mistakes, whether it be qual-

By Jonathan Springston, AAHOA Lodging Business

La Quinta executives open up about the history of the limited service brand, how the company defines its culture and why the guest always comes first

La Quinta President & CEO Wayne Goldberg and Chief Development Officer Rajiv Trivedi

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ity, dealing with partners we never should never have been dealing with – we very consciously said ‘we are going to do this better’ and I think we have.”

When Goldberg and Trivedi arrived at La Quinta, the company owned only 270 properties, faced considerable debt and was in general disarray. As Goldberg rose to presi-dent and CEO in 2005 and Trivedi to Executive Vice President of Franchis-ing and Chief Development Officer, so too, did La Quinta grow.

Along with other talented execu-tives and staff, they helped steer La Quinta through the acquisition and subsequent sale of Baymont proper-ties as well as the Blackstone Group acquisition in 2006 while carefully expanding the portfolio with a com-bination of corporate-owned and franchised properties with a philoso-phy rooted in AAHOA’s 12 Points of Fair Franchising.

“AAHOA has been a great partner and instrumental in our success. AA-HOA is our key group of franchisees and we have learned a lot from them,” Trivedi said. “Our franchising model was based heavily on the 12 Points of Fair Franchising. It keeps us honest and gives us the reality check every year to make sure we are paying attention to the needs of the industry.”

Today, La Quinta is one of the largest operators of limited-service hotels in the United States. The com-pany operates and provides franchise services to more than 800 hotels in 46 states, Canada and Mexico under the La Quinta Inns and La Quinta Inns & Suites brands, with hotels in the pipeline for Latin America.

While corporate-owned prop-erties are operated by La Quinta’s operations team, led by COO Angelo Lombardi, and franchised properties are usually operated by an independ-ent management company or other qualified manager, Goldberg views all properties as part of the same La Quinta family working toward the same goals.

“We don’t view our franchisees as our customers. They are our partners [and] it’s a long term marriage,” he said. “There’s one guest and we share that guest. Most of our competitors, they will tell you their number one

customer is their franchisee. To me, that’s backward. To me, the number one customer is the guest and any-body that loses sight of that I think focuses on the wrong things.”

“Having such an open relation-ship with our partners makes us bet-ter,” Trivedi added. “They become a better believer in the program you are launching. It creates a much better environment for a guest.”

Strong Growth in 2011Travelers are rewarding La Quinta for their careful focus on the guest expe-rience. Despite a sluggish economy, Goldberg said La Quinta projected to complete 2011 with strong growth across the major indicators.

“We saw significant RevPAR growth. We’re going to have relatively strong EBITDA growth,” he said. “In the grand scheme of things, we saw some development activity slow down but in relation

to our competitors, we did very well and we’re very pleased.”

“We saw unit growth, new con-tracts signed, pipeline growth for sure,” he added. “Guest satisfaction remains strong and consistent. We improved in almost every measure in 2011, even in a relatively weak economy.”

Goldberg is concerned that no one is responding swiftly enough to the robust demand growth the industry has experienced over the last two years.

“When you have demand grow-ing, it’s reasonable to expect that you get 1 percent or 2 percent rate growth. In the first part of 2011, we didn’t see that,” he said. “We planned to see it and we had to ratchet back because we didn’t see it. We felt pricing should have moved sooner. 2012 is set up well for modest rate growth.”

Goldberg feels momentum built

Goldberg on Trivedi: “When Raj came in, he was able to help us not make those same mistakes, whether it be quality, dealing with partners we never should never

have been dealing with – we very consciously said ‘we are going to do this better’ and I think we have.”

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over the course of 2010 and 2011 bode well for the industry in

2012.“We’re going to open

more hotels this year. I know we’re going to sign additional contracts this year,” he said.

“We’re investing in company-owned assets to renovate more

hotels. More marketing dollars, more information systems

dollars. That sets us up to perform better, even with a sluggish economy.”

Trivedi noted franchised proper-ties outperformed their competitive set over the last two years, enjoying a 3 percent share growth in 2011 and a healthy RevPAR increase.

“We had one of the least amount of properties

going back to the bank. We have franchisees that were in some financial trouble but we did a good job of working out a payment plan. We are one of the few brands that have seen posi-tive growth in the units over the last two years,” he said. “Franchisees are quite pleased with the support and flexibil-ity. Our strategy for the brand and our partners is our biggest strength.”

Clue Scanning Here For You

During the 2011 conference, La Quinta introduced a number of new initiatives, including the branded customer concept called “Here For You.”

“We’re not building a culture. We’re defining one that already existed,” Goldberg said. “When we started this, we didn’t have senior level meetings to decide what our culture was going to be. We went out and asked everyone for feed-back on what we view our values to be. All we’ve done is define the

values people say existed.”When Goldberg hands out

his business card, he also hands out a two-sided plastic card that contains how guests want to feel

“The results of Here For You are highly successful,” Trivedi said. “It’s not a program but a lifestyle. Here For You is going to be one of our biggest programs.”

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(Assured, Settled In and Optimistic) on one side and the La Quinta compa-ny values (People, Passion, Integrity, Excellence, and Unique) on the other.

“It’s a work in progress,” Gold-berg said of Here For You. “We’re never satisfied. No matter how good we do something today, we want to find a way to do it better tomorrow.”

Trivedi said La Quinta is in the process of collecting surveys from every La Quinta employee, whether they work in housekeeping or they manage the hotel, to gauge how Here For You is progressing.

“The results of Here For You are highly successful,” he said. “It’s not a program but a lifestyle. Here For You is going to be one of our biggest programs.”

A key component of Here For You is Clue Scanning, which helps La Quinta employees see their proper-ties from the guests’ perspective.

During a visit to the La Quinta Inn & Suites Dallas Love Field, Goldberg and Trivedi put Clue Scanning into action, pointing out to General Man-ager Jesse Verghese small corrections, like ensuring cables are completely tucked behind a wall-mounted HDTV.

“What Clue Scanning has done is it has created a greater awareness,” Trivedi said. “You are watching what you do and how you do it because you are observing others behavior.”

After last year’s conference, La Quinta held 158 Here For You train-ing sessions across the country and world. Clue Scanning went over quite well.

This “greater awareness” about the guest experience has paid divi-dends for La Quinta, resulting in so much positive feedback from guests that the company had to assign some-one from the guest services division to handle it all.

“Our guest satisfaction scores did go up. The real way to measure that is through compliments that are unsolic-ited,” Oliver Evancho, Vice President, Franchising & Development Admin-istration, said. “ I attended 28 training sessions and every one was fun for me. To tell [employees] to become a guest, what do you see, hear, feel, smell – it was enlightening for me but to see the light bulb go off for your maintenance staff, your housekeeping staff – it was

very rewarding.”Clue Scanning has inspired new

ideas from everyone. Lombardi intro-duced single-cup coffee makers in all corporate-owned properties and new pillows for all La Quinta properties through his personal observations.

“At the end of 2011, I challenged our executive committee to each visit two corporate hotels and two fran-chise hotels,” Goldberg said. “I told them to come back and report against our values as you see it from our em-ployees [and] benchmark where we are as an organization. We don’t want them to be words. We want them to be real.”

“What we’re going to show at this year’s conference is as a brand, we have the responsibility to ensure Clue Scanning isn’t a buzzword, that it

really becomes the culture of who we are as a brand,” Evancho said.

The HDTV Project The introduction of high-definition TVs at La Quinta properties is a point of pride for many executives as it served as the biggest product focus of 2011. The brand has a partnership with Samsung on plug and play TVs that come equipped with the ability to broadcast HD signals.

During the visit to the Dallas Love Field property, Goldberg grins as he plays with a new set, showing off different backgrounds guests can set while they work or rest.

“Look at the picture! This is what I really want you to see!” Goldberg points out the Samsung sets have ports on the side of the TV, making it

“People need to see the lighter side of you

because that makes them comfortable

around you,” Trivedi said. “People can see the accessibility and

the human side of you.”

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easy for guests to use.“It’s not about giving the guest all

the technology,” Goldberg said. “It’s about giving the guest the ability to use the technology they are traveling with.”

The $50 million project called for rooms at every corporate-owned property to have these Samsung TVs by mid-2011 with a minimum of 30 available HD channels.

“We want to make sure that minimum HD channel consistency stays through-out the brand and that plug and play is available,” Trivedi said. “If they have a TV that doesn’t supply a model, then we’re going to have franchisees in-stall a panel that allows them to do plug and play with their existing TVs.”

After the TV announce-ment at last year’s confer-ence, the La Quinta Brand Council raised a number of concerns about how the project would proceed at franchised properties. Among other issues, the Brand Council pointed out how many franchisees are tied into long-term contracts that to get out of would require expen-

What we’re going to show at this year’s conference is as a brand, we have the responsibility to ensure Clue Scanning isn’t a buzzword, that it really becomes the culture of who we are as a brand

“The first thought was to im-plement this by the end of 2012,” Trivedi said. “We had a prolonged debate where [the Brand Council] said ‘we can’t do that’. We needed to understand the facts about contracts, liquidated damages and time of contracts.”

“We want people to be able to do it and not do it like we do it if there is a better way,” Goldberg said. “Most

sive liquidated damages.“About two years ago, cable

companies started locking people into certain agreements. It sounded great at the time but the companies understood their technology was not moving as fast as satellite or HD,” Evancho said. “They were trying to wrap people into long-term contracts. We didn’t understand that until we went out there to hear it.”

Goldberg on guest satisfaction: “To me, the

number one customer is the guest and anybody that loses

sight of that I think focuses on the wrong things.”

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of our franchise partners already have flat screen TVs. They already have some HD content delivered. So we’re working to see what that will look like across the whole system.”

After conversations with the Brand Council, La Quinta decided to provide greater flexibility on imple-menting the project.

“What we don’t want to do is put a date by which they have to have it completed and them have a current contract that they then have to pay liquidated damages,” Goldberg said. “We’re working to make sure we’re not forcing them to do something that costs them excessive amounts of money to get out of agreements that are already in place.”

“We are not expecting them to forgo the contract they are currently under,” Trivedi added. “We would rather they work with the companies they already have contracts with and make the adjustments to meet the new standards.”

The debate over the HDTV project serves as the perfect example of the function the Brand Council serves and the friendly working relationship it has with La Quinta executives.

“By no means do we dictate deci-sions to them and then they just sit there and roll over. If we are moving in a direction, we bring it to their attention and get their thoughts and suggestions. If they don’t like it, they’ll tell us,” David Wilner, Senior

Vice President, Development, said. The Brand Council also offers

suggestions for new initiatives.“A lot of initiatives we’re rolling

out were brought to our attention by the Brand Council, like Here For You and the breakfast program,” Wilner said.

Testing Projects in Corporate-Owned Properties New initiatives like the HDTV project often start in La Quinta’s corporate-owned properties for testing and tweaking before moving on to fran-chised properties.

“Angelo and the entire operations team will deploy in a batch of prop-erties and see if there is a ROI and determine what the EBITDA is,” Ev-ancho said. “When we decide we’re going to do it, we’ll do it to every one of our properties before we make it a brand standard.”

“The purpose of launching at a corporate hotel is very simple: any new program you launch, you always have certain adjustments you have to make, iron out certain kinks,” Trivedi said. “We want to make sure when we launch a program to our franchise community, it is not only tested but it is vetted, it is proven.”

“Some other companies out there that are franchised only roll out something that isn’t tested,” Craig Brantl, Director of Franchise Services, said. “Our owners appreciate testing it on our end.”

A Family AffairThorough product testing and open dialogue between management and franchisees create an environment where franchisees feel like an impor-tant part of something special.

During Goldberg and Trivedi’s visit to the Dallas Love Field prop-erty, Verghese and other employees warmly greeted the executives and appeared excited to show off the new hotel.

Verghese beams with pride as Goldberg and Trivedi point out the different features of the property they most enjoy. Goldberg notes the floors in the main entrance and bathroom ap-pear to be wood but are actually made of vinyl. Trivedi points out the unique integrated bed scarfs and the decora-tive trim work in the bathrooms.

“It’s not about giving the guest all the technology,” Goldberg said of the HDTV Project. “It’s about giving the guest the ability to use the technology they are traveling with.”

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Throughout the tour, both men ask Verghese questions while sharing stories and laughter.

“It’s very easy to become pas-sionate about what you do when you see you are a partner with the franchisees. We’re not telling them to do something. We’re guiding them and they’re there for us as well,” Evancho said. “We have fun and our

partners see it. The staff sees it when we arrive. They see we’re not under somebody’s thumb.”

Evancho noted Trivedi always holds meetings with other execu-tives and staff to determine how to keep site visits light while also being helpful.

“People need to see the lighter side of you because that makes them

comfortable around you. People can see the accessibility and the human side of you,” Trivedi said. “Ulti-mately in our business, it boils down to relationships and someone who believes in and trusts you.”

La Quinta executives feel creating this comfort level makes property visits and the annual conference feel more like family reunions.

“It’s amazing how many of our franchise partners that enter our brand are amazed by the accessibility of all our executives,” Wilner said. “We have franchisees who come in here unannounced. The door’s always open and they can discuss problems or just talk.”

Through mentorship programs and networking, La Quinta tries to introduce franchisees to one another so they might help each other solve common problems and to further build a sense of community.

“Our visits are not a threat to [franchisees]. Our visits are to tell you the truth,” Trivedi said. “It is not they who should be worried. It is us that should be worried to make sure that they are successful in every aspect at all times.”

Goldberg discusses La Quinta room features he enjoys

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Goldberg and Trivedi point out a small correction at the La Quinta Inn & Suites Dallas Love Field

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