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Embassy Suites CEO talks about strategy for expansion

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Earlier this year, Embassy Suites — the chain of hotels owned by McLean-based Hilton — announced plans to expand by 25 percent in the next three years. The company, which currently has 211 hotels in the United States, is to build about 90 new locations by 2016.

Locally, Embassy Suites is building a hotel in Springfield. Construction began last January, and the hotel is expected to open later this year.

John Rogers, who became chief executive of Embassy Suites in September, is the man behind the expansion. Capital Business caught up with Rogers — who most recently worked for Hilton in the United Kingdom, and at Ford Motor Co. before that — to discuss his vision for Embassy Suites.

You’re new to Embassy Suites. How do you view the brand, and what is your long-term strategy?

I’ve only been at Embassy for four months, but one thing in particular has been very clear to me: There is tremendous opportunity for growth.

We’ve been talking to a lot of owners about how they’re feeling about building and converting more hotels, and the mood is significantly more optimistic of late. The market is changing, and in a sector where differentiating between brands is tough, Embassy’s product is genuinely unique. I really think we can make it bigger still.

How is the market changing? Has the economic downturn created more demand for Embassy Suites, as people try to get more value for their money?

We find that the general improvement in the economy is helping our business. We don’t particularly believe that people trade up or trade down for Embassy. They come to Embassy Suites because they love the unique number of things that it offers — two rooms, complimentary breakfast, complimentary drinks every evening.

As you expand, are you planning to build new hotels from the ground up or convert existing properties?

Many of them are being built from the ground up. We also have a very flexible approach to conversion, both with existing hotels and also with what we call “adaptable reuse” — things like offices spaces that we convert into an Embassy Suites.

It does vary, though. Finding an empty lot in Manhattan is always going to be difficult, so we’re focusing on converting existing space there.

You recently introduced an updated model for new hotels. Can you talk a bit about that?

The traditional Embassy Suites has a central atrium. Our new model has an atrium at the front, so there’s less wasted space — you need less land and fewer materials to build the same number of rooms.

How much money does that end up saving?

It is a bit difficult to generalize — there are such differences in location costs, banking costs, construction costs — but the savings are material. It’s about $10,000 to $20,000 per [hotel room]. In the development world, that makes a real difference.

Are there certain markets you’re targeting — cities vs. suburbs, say?

Embassy has been particularly strong in secondary and tertiary markets and somewhat less strong in key downtown markets. But there are a number of major downtowns where we would like to expand — New York, Los Angeles, San Francisco — and we’re talking to a number of them. There are lots and lots of locations in the U.S. where we know Embassy would become a home run if we build them.

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