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News for the Hospitality Executive

Anupam Narayan, CEO Red Lion Hotels Corp, Says
 "The Hotel Industry is Just a Fun Business"
By Bert Caldwell, The Spokesman-Review, Spokane, Wash.McClatchy-Tribune Regional News

Mar. 30, 2008 - Recession? Maybe.

High gasoline prices? Certainly.

But Anupam Narayan predicted recently that Americans will vacation this year as they always have. And if you are the new president and chief executive officer of Red Lion Hotels Corp., that's a good thing.

Red Lion has more than 9,000 rooms in eight states and British Columbia to fill, as well as restaurants, lounges and 400,000 square feet of meeting space. Narayan plans to add more.

In five years, he said, Red Lion could be double its size today, with a footprint encompassing much of the United States west of the Mississippi River. A toehold in Chicago is a long-term possibility.

Long-long term? How about China?

"It's a very auspicious name for China," said Narayan, who attended a hospitality industry conference in Shanghai last year.

But his sights are set closer to home for the time being, even if the desire is there.

"We're hungry for acquisitions," says Narayan, who succeeded Art Coffey last month. It was Coffey who hired him after a chance meeting at a 2004 hotel association conference in Phoenix, when Narayan was acting president and chief executive officer for Best Western.

"I shared with him my fondness for Red Lion," said Narayan, who worked more than a decade for the chain in Portland before it was purchased by Doubletree Hotels in 1997.

He moved on to Best Western, where he held a number of positions before the meeting with Coffey.

Narayan, 54, began his career in the hospitality industry in 1981 at Holiday Inn. As a holder of a new master's in business administration from the University of Florida -- and a degree in engineering from the prestigious Indian Institute of Technology -- he was in Memphis, Tenn., for an interview at FedEx headquarters. A college friend suggested he talk with Holiday Inn, which was also based there.

He said the warmth of the people at Holiday Inn convinced him that inn-keeping, not shipping, was his calling.

Calling, too, was the West, which he visited occasionally on business trips. As much as he liked working at Holiday Inn, he said, he quit his job in 1985. He and his wife, Judy, headed for Portland.

"I had never been to Portland. I didn't have a job," Narayan said.

Red Lion solved that problem. And though he did not need a job in 2004, Narayan said hearing Coffe outline his plans for Red Lion's future convinced him the company could be his home again, even if he had never been to Spokane.

"I love the brand," he said.

It did not take long for Narayan and his wife to get a feel for their new home. As they took a break from unpacking, a passing couple introduced themselves, then invited the newcomers to dinner.

Few cities have neighborhoods like Spokane does, said Narayan, who has been restoring his South Hill home and keeping winter at bay.

"I even bought my first snowblower," he said.

Narayan said he travels regularly to inspect properties and meet with investors. He wants to extend his travels.

More California and Texas properties are a priority for Red Lion, as is a stake in Las Vegas. Although Red Lion stock has lost about one-third its value since last summer, Narayan said the company is well-positioned to buy hotels thanks to a $60 million stock offering in 2006, an untapped $50 million line of credit, and a general restructuring of Red Lion finances that he supervised as chief financial officer.

As part of that effort, Red Lion spun off its non-hospitality real estate holdings in Spokane, and the local property management operations that were the foundation of Goodale & Barbieri, which evolved to become Red Lion.

Like a prospective homebuyer, Narayan said he finds hotel owners pricing their properties unrealistically. Red Lion's only major, recent acquisition was the leasehold of a former Radisson Hotel in Anaheim. The cost was $8 million, and the company is investing $10 million to refurbish the property outside the main gate to Disneyland.

Narayan said the Red Lion Anaheim will become the centerpiece of an expanded Southern California presence.

He ruled out new construction, at least for the present. Perhaps 500 to 600 hotels change their names each year, he said, as chains require upgrades an owner does not want to make or debt they do not want to incur.

That applies to Red Lion franchisees as well. Of the 20 Red Lion properties the company does not own, Narayan said he expects to lose as many as six that did not commit to required remodels by a Dec. 31 deadline.

"That's OK. We want a strong system," he said.

Much of that strength is in the employees and the service they provide, Narayan said. The "Red Lion Way" mirrors the Northwest culture that has made Nordstrom so successful, he said.

Employees receive "The Little Red Book" of five principles, including integrity and dependability, that are the keys to "personalized, exuberant service" called for in the mission statement. Managers are supposed to adhere to "Leadership by the Book."

Narayan said Red Lion usually brings in its own general manager when it takes over a property but keeps the rest of the staff in place.

Set a good example, he said, and people will follow.

Deliver a good product, and customers will follow. Red Lion reported $5.2 million in net income for 2007, and increased occupancy.

The chain has launched a new customer loyalty program, and is working to get travelers to book reservations through its own Web site instead of Travelocity and other booking sites.

"Those channels are important to a company like us," Narayan said, but the commissions are steep, up to 30 percent.

He said Red Lion is also looking for ways to leverage its TicketsWest operations in 16 states by offering tickets through its hotels or rooms to out-of-towners attending events.

Although Narayan has always hung his hat on the financial side of the business, he said he enjoys all facets of the business, including real estate, marketing, and service.

People in the industry tend to be outgoing, he added, and customer feedback is constant.

"The hotel industry is just a fun business," he said.


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