Extended Stay America CEO: 2019 Has Been a Year of Tech Innovation

It has been "a year of technology innovation" for Extended Stay America, according to company CEO, Jonathan Halkyard. More than half of the company's hotels are using its new property management system and the expectation is that all company hotels will be on the new system by October 2019. Franchised hotels, meanwhile, will begin receiving the new PMS beginning in early 2020.

"The new system is significantly easier for our associates to use, allows upselling, more control over company policies and fee collections as well as more efficient handling of centralized billing and accounts receivable," Halkyard elaborated during the company's Q2 2019 earnings conference call.

He went on to explain that by the end of October 2019, the company will have completed new network technology and broadband capabilities at all company-owned hotels. This technology implementation will allow for faster Internet speeds for both hotel staff members and guests. It will also provide improved network security, support a higher number of devices simultaneously, and allow guests to stream their favorite TV shows on the in-room television. Franchised hotels will begin to get this technology later in 2019 and early into 2020.

During the second quarter of 2019, Extended Stay America also completed the first phase of its new CRM system.

"We have collected and are beginning to analyze guest behavioral data longitudinally over the past five years," he said. "As we gain insight from this data, we are developing more personalized and targeted offers and expect to implement updates to our loyalty program, tweaks to direct marketing and improvements in our mobile app."

Extended Stay America also completed its new mobile app in June 2019. The new app brings its booking and loyalty application together in what Halkyard calls "a completely redesigned and user-friendly mobile platform" for both iOS and Android devices. The new mobile app is meant to make finding and booking a hotel room easier and will have additional functionalities in the next six to 12 months.

During the Q&A portion of the phone call, Halkyard was asked about the company's plan for its loyalty program which currently has about three million members. Compared to other hotels, such as Hilton's 94 million and Marriott's 120 million, ESA's membership could be considered quite small, but when asked if he thought it would grow significantly in the future – Halkyard said no.

"The loyalty program that we have is important," he explained. "But it's not the same type of loyalty program other hotel companies have invested in and spend quite a lot [of money] to maintain."

One reason for this, is that ESA is a single brand that operates completely differently from other companies with large brand families. Additionally, "large customers" or corporations – not individuals – make up half of its business.

Instead of trying to significantly grow the loyalty program membership, Halkyard said that ESA will be focused on growing the program's value to its customers and mining the behavior and visitation characteristics of its customers so that it can make more compelling offers to them.