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by: Bruce H. Walker, President, December 1997

The cost of construction generally follows the square footage of the rental unit, and the REVPAR usually is closely related. Maybe. Maybe not. Here's why.

Comfort Suites, typically a 12 by 32 rental unit (384 square feet,) is 19 percent larger than the typical, standard, 12 by 27 foot hotel room. If the Comfort Suites matches the average rent per square foot of the typical Limited Service hotel room, it should be generating about a $48 REVPAR (Limited Service REVPAR of $40.13 plus 19 percent- 1997 YTD).

Real Close

Comfort Suites is real close, and trending to exceed $50.00 very soon. In the first three quarters of 1997, Texas Comfort Suites averaged $44.60 compared to $40.13 for the average of the major Limited Service brands. Its REVPAR is sixteen percent higher than last year, and last year was 14 percent higher than the year before. It is far from mature, with many new properties opening this year. In the Third Quarter; 14 Comfort Suites with 900 total units generated a $46.43 REVPAR (estimated 69.8% occupancy and a $66.48 rate).

The 400 Square-Foot Mini - Suite

We have seen enough evidence to suggest that the most successful hotel of the next decade will be the 400 square foot mini-suite. It attracts the family on weekends, who gets a free breakfast and can cram kids and friends into one unit. It attracts the business traveler mid-week with its extra space and comfort.

Net, it is not that much more expensive to build or operate (no extra plumbing, wiring or public space; same front desk staff and very little extra make-up time) yet the consumer is apparently willing to pay lots of extra rent.

Choice Hotels has a winner. Everyone else is trying fast to catch up: with Hawthorn Limited, Holiday Express Inn & Suites, Hampton Inn & Suites, Fairfield Suites and others.