LONDON, U.K. — Tom Magnuson of Magnuson Hotels wanted to make sure the global hotel company had its ducks in a row before they expanded to Canada. He says they're ready now.
“We wanted to make sure we had our brands right before we expand with our friends to the north,” said Magnuson, whose company is based in Spokane, Wash., as well as London, U.K. “We do have that now — we're not 60 years old; we're a younger, cleaner, more contemporary company.”
Growing up in Wallace, Idaho, not far from the Canadian border, Magnuson had a condo in Red Mountain, near Rossland, B.C., for many years and has many fond family memories of those times.
There are five Magnuson Hotels in Canada so far: Magnuson Hotel Creston in Creston, B.C., and Magnuson Hotel Grace Inn in Quesnel, B.C.; plus three independent properties, Skyline Motel, Kamloops, B.C., Travellers Inn, Summerside, P.E.I. and Relax Inn, Collingwood, Ont.
On Feb. 3, Magnuson Hotels celebrates its 13th birthday. The company now has 1,100 hotels in the U.S. and Canada, including 150 Magnuson-branded properties and the balance made up of independent associates who want to keep their own name, but have access to Magnuson's highly managed service platform for independents, Magnuson says.
The company has signed a deal with Jin Jiang, and with Louvre hotels, owned by Jin Jiang, for a cross-distribution platform, much like the airlines' marketing alliances. Combined inventory with these hotels adds up to 600,000 rooms or 6,000 hotels. “We've gone from Canada, U.S. and U.K. hotels in the middle of this year, to expand to 50 countries,” explains Magnuson.
The reason for their success is that “we identified a universal need in the marketplace — how can I as a hotelier drive the most business at the lowest cost?” Magnuson says.
The company offers a simple fee structure of 5 per cent of gross revenue, compared to 12.5 per cent for the average midscale brand in the U.S. and Canada, Magnuson adds. “During the last few years in Alberta, anybody could make money, but when times change, the down cycle becomes a lot more challenging since hoteliers have the same overhead.
“We offer hotels a way to get business from outside the local area at the lowest cost. It's a cost relief for hotels built as a Hilton, Choice, Best Western or Wyndham — we can deliver all of the franchise-type services such as PMS, distribution and brand support — at a flat fee.”
And yes, Alberta is one area Magnuson is targeting.
Magnuson says they handle property improvement plans (PIPs) with “encouragement and love.” For example, other brands might require an 85-room hotel to install 85 new flat-screen TVs. Magnuson would suggest that they start with 20, and set those units up as premier rooms. Then, once they have more money, they can go buy some more.
“One thing we're proud of is our 48-hour brand approval,” he notes. “If a hotel wants to make a brand change and renovate, other brand approvals can sometimes take six months.”
In early February, Magnuson announced that as part of its 13th birthday celebrations, the company is waiving 13 weeks' fees for all new hotels that join their branded portfolio in February, 2016.
Also in early February, Magnuson announced a 29 per cent same-store increase for January 2016 over 2015. Driving the performance increase are continued lower U.S. gas prices and increased consumer brand recognition. In Q3-4 2015, Magnuson re-branded its three banners and introduced its Follow the Star advertising on a national basis.