|By Dan Voorhis, The Wichita Eagle,
Kan.McClatchy-Tribune Business News
Aug. 10, 2006 - Top executives of Wichita's Value Place hotel chain sweated in Wednesday's 103-degree heat in the parking lot of their new hotel at 7525 W. Taft in west Wichita.
But they didn't mind because they wanted to announce good news: The company has sold 517 franchises in less than two years, making it the fastest-growing hotel chain in the country.
Investors have committed $2 billion to building those hotels over the next three to four years, company officials said.
The company had planned the event to announce its 500th franchise, but events moved too quickly, said Greg Kossover, chief executive and co-owner.
The success helps Wichita in two ways: the 60 corporate jobs at the company's headquarters on East 21st Street, plus the return created for local investors.
The company appears to be another winner by longtime Wichita hotel entrepreneur Jack DeBoer. He has started and sold three hotel chains over the past 30 years. Before that, he was one of the nation's largest apartment builders.
Value Place is a culmination of that experience, he said.
A Value Place hotel is an unusual combination of hotel and apartment house, DeBoer said. Guests pay $169 for a week's stay and get a clean, safe efficiency apartment in return.
The company's two Wichita Value Place locations have nearly 100 percent occupancy.
The reason the concept has built such excitement among investors is that it makes a strong profit. The efficiency built into each hotel's design and operation lowers costs while preserving cleanliness and safety.
"We treat nickels like manhole covers," DeBoer said.
Company executives are working to keep up with demand for franchises and making sure franchisees are happy and running the new hotels correctly.
DeBoer and Kossover are relying on many of the executives from DeBoer's recent chains, Residence Inn or Candlewood Hotels.
The company has courted growth by offering what Value Place president David Redfern calls an "a la carte" menu of services to franchisees. The company will buy the real estate, oversee construction and manage the hotel -- for a fee.
Having those services means a wider number of investors can become franchisees, he said.
The chain has 1,260 locations identified in markets of 100,000 people or more. That means the chain could be built out in five to 10 years, although Kossover said it is inevitable growth will slow.
DeBoer said they are looking at whether to put Value Place into markets of less than 100,000 people. If that tests out, he said, the company could add another 400 to 500 hotels.
Reach Dan Voorhis at 316-268-6577 or firstname.lastname@example.org [mailto:email@example.com].
Copyright (c) 2006, The Wichita Eagle, Kan.
Distributed by McClatchy-Tribune Business News. For reprints, email firstname.lastname@example.org, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.