In the years since Shaner Hotel Group�s chairman and CEO, Lance Shaner, and president and COO, Fred Shaner purchased their first franchise hotel in 1983, they have grown the company to become the seventh largest owner and operator of hotels in the United States. But their success story really began when they graduated from college in 1975... 

Lance Shaner and his brother, Fred, finish college in 1975. Lance attended Alfred (N.Y.) University and Fred attended the Rochester Institute of Technology and Alfred University, majoring in business administration.

The Shaner brothers begin a seven-year real estate entrepreneurial odyssey that would lay the foundation for the eventual formation of the Shaner Hotel Group, taking over the payments on small apartments, �mom-and-pop� motels and student housing on which banks had foreclosed. Their goal -- one destined to meet with success�was to correct the problems and resolve the issues that had led the properties toward disaster and to make them profitable. By 1983 the Shaners had amassed a portfolio of approximately 200 profitable units, including two small motels with a total of 61 rooms.

That first �real� hotel was a 95-room Sheraton in Lockport, N.Y. (near Niagra Falls), purchased for $2 million. Re-flagged as a Best Western, the hotel was profitable from the outset. That first hotel is still owned by Shaner Hotel Group and is valued at $4 million as of January 2000 (of course, the original ugly blue tile and equally ugly brown wallpaper and shag carpet�that had to be �combed� with a rake�are long gone.)

The brothers purchased El-Mar Communications-a small cable television company-for $200,000.  The company had about 600 subscribers. By 1989, the cable company had about 8,000 subscribers in Western New York and Southern Pennsylvania, �not large by cable standards, but large for us.�

A second hotel was purchased in 1986, a 122-room Sheraton in Newark, Ohio. It, too, was converted to a Best Western. At that time the Shaner Hotel Group corporate staff totaled four, including Lance and Fred. Negative cash flow from this second hotel was, fortunately, offset by the financial success of their first property. Still, that negative cash flow would influence all future hotel purchasing decisions, punctuated indelibly by three key words...location location LOCATION!

El-Mar Communications, grown to 8,000 subscribers, was sold by the Shaner brothers for $10 million, providing additional needed capital for hotel acquisition. That same year, gross revenues from the hotels reached $9 million.

By 1990, the company had added two more hotels, expanding west to Texas. It was that same year that Shaner Hotel Group was cited as the fastest-growing business in western New York.

The growth of the company accelerated as it added nine new properties...full service, limited service and extended stay, including the purchase that year of five Hawthorn Suites hotels in Texas (it was the company�s first purchase of a Hawthorn Suites, and the company today is the largest franchisee of that brand). The company opened a Western regional office in Austin, Texas.

The company�following an exhaustive investigation of several cities�decided to relocate their corporate headquarters from Bolivar, N.Y., to State College, Pa., the home of Penn State University.  The move cost in excess of $200,000, and each employee who made the move was given a $10,000 check to use as a down payment on a new home. By the end of 1993 the company owned 29 hotels and more than 3,200 rooms.

Gross revenues in 1994 soared to $62 million, up almost 600 percent from 1989. The company portfolio had grown to 37 hotels by the end of the year, with more than 4,300 rooms.

By the end of 1995, Shaner owned 39 hotel properties comprising full service, limited service and extended stay; upscale hotels in the 200-room to 300-room range were not yet in the portfolio. The corporate staff had grown to 30, the company had a total of 2,000 employees and all accounting, financial reporting and engineering functions were centralized in 1995. And the total number of hotel rooms surpassed 4,500.

AEW Capital Management Ltd., a Boston-based pension fund, became an investor in Shaner Hotel Group, providing an infusion of $100 million for capital expansion, which during the next two years would help the company grow to 56 hotels in 24 states, representing 11 different hotel brands...and make Shaner the seventh largest hotel owner/operator in the United States.

The re-engineering was precipitated by the tremendous growth of the company and designed to deal with short-term and long-term issues on a property - by - property basis. One significant change: sales strategy switched from a regional concept to one of niche segmentation, with the addition of separate field marketing support teams (FST�s) for full service, limited service, extended stay and upscale and a multi-disciplinary corporate support team (CST). Annual gross revenues for 1999 totaled $160 million.

With a portfolio of 56 hotels and more than 8,000 rooms in 24 states � with a total value of more than $500 million � the company�s focus is on adding more upscale hotels, convention properties and larger full-service hotels, geographically east of Texas, but with a keen eye for opportunities in the northeast where the lodging industry in general has seen dramatic increases in sales and revenues in 1998 and 1999. In October 1999, Shaner opened a $8 million, 106-room Holiday Inn Express, in the mixed-use Williamsburg Square project the company is developing in State College, Pa., and later acquired additional properties in Mass., West Va. and Ohio. The company has grown to 4,000 employees overall and a corporate staff of 90.