Carlson's Country Inns & Suites has grown by changing with the times and tastes while staying true to its cultural DNA.
On a recent Thursday morning, the parking lot of the Country Inns & Suites hotel next to the Mall of America was packed with vehicles from as far away as Maryland and Saskatchewan, Canada.
And at 9 a.m., the hotel's serve-yourself breakfast was teeming with parents, kids, seniors, business travelers and even a few airline pilots.
"We've been coming here for the last five or six years," said Agnes Notarbartolo of Thunder Bay, Ontario, as she watched her 1-year-old and her 4-year-old stoke up on breakfast before a big day that was to include the Children's Museum in St. Paul and the Como Zoo.
"We love it here," chimed in husband Antonio Notarbartolo.
As it celebrates its 25th anniversary starting this month, the self-described "upper mid-scale" hotel chain has solidified its place as a key member of the $7 billion Minnetonka-based Carlson Rezidor Hotel Group. From a single-unit experiment next to a Country Kitchen restaurant in Burnsville, the down-home concept has morphed into a nearly 500-unit player with global aspirations.
Launching a new hotel chain from scratch was a daunting challenge.
"It was a gutsy move," said hotel consultant Kirby Payne, who was at the grand opening for the first Country Inn in September 1987. "They had brand awareness in Country Kitchen. It was a great name, and they took the theming of Country Kitchen and threw it into Country Inn."
But times and tastes change. Today, that Country Inn of 1987 is almost unrecognizable. The architecture of 2012 is sleeker and grander than the days when Country Inn's main competitors were Days Inn and Econo Lodge. Breakfast has graduated from coffee, fruit and oatmeal in a packet to hot foods from scrambled eggs and sausage patties to build-your-own breakfast burritos.
Gone are the brass headboards on the beds and the stenciling on the wallpaper. The lobby remains the focal point for hotel guests. But the spare stick furniture that once graced the space now features comfortable arm chairs and sofas next to a fireplace and small library with books to borrow.
"The DNA stays the same -- home, service, value -- but maybe we change the color palette, the exterior of the building. The name doesn't change but there might be different treatments, advertising and marketing," said Scott Meyer, vice president of Carlson Rezidor and head of the Country Inns & Suites division. "We have to reinvest in existing hotels."
Country Inns & Suites is moving forward after a difficult several years when recessionary pressures put a clamp on both business and leisure travel. In 2008, at the start of the Great Recession, the chain's occupancy rate dropped 7.5 percent from the previous year. In 2009, occupancy declined another 11.9 percent.
"We did the best we could do through some very difficult times," said Meyer. "The rebound is a much longer path but a steadily increasing path."
Occupancy has risen the last two years but remains slightly below pre-recession levels at the Carlson division.
The same can be said industrywide, according to Smith Travel Research.
"Demand is back," Jan Freitag, senior vice president of Smith Travel Research, said in an interview Friday. In the first six months of this year, a record number of hotel rooms have been sold in the U.S., he said.
"With more demand and fewer new rooms, occupancy is growing," Freitag said. "Room rates are not going back to where they were in 2007, but we are seeing growth to the tune of 4 percent."
In June -- the beginning of the peak travel season -- U.S. hotel occupancy jumped to 70.3 percent compared with 67.4 percent a year ago and 60.8 percent in the recession year of 2009, according to Smith Travel Research.
Revenue per available room -- a key industry metric -- jumped 9.5 percent in June to $75.49 compared with $68.94 in June 2011 and $59.30 in 2009.
"The U.S. hotel industry is going to do very well for the foreseeable future," he said.
Year of breakfast
To distinguish itself from rivals such as Hampton Inn and Holiday Inn Express, Country Inns & Suites made 2011 the year of breakfast. It increased and rotated morning food options, expanded the range of hot foods that guests could customize and got rid of styrofoam containers in favor of washable dinnerware.
Privately held Carlson does not disclose profits. But earlier this year the holding company reported that its 1,319 unit Carlson Rezidor Hotel Group, which includes Radisson and several other hotels as well as Country Inns & Suites, posted 2011 revenue of $7 billion, up 7 percent from 2010.
Payne, whose firm HVS Hotel Management oversees the operation of a Country Inns & Suites in Greeley, Colo., also sees signs positive signs.
In June, the Greeley property had a 78 percent occupancy rate, up 5 percent from a year earlier with an average daily rate of $89.48, up $9.50 per day.
The biggest challenge for Country Inn is its relatively small size -- just shy of 500 properties compared with 1,800 for Hampton Inn, 2,100 for Holiday Express and 1,300 for Comfort Inn.
"That means you have more people living by, or driving by, Hampton Inn than are driving by Country Inn," said Payne. Brand awareness is a significant difference. People are more likely to stay with brands they are familiar with."
Meyer, who started with Carlson as the first manager of the Burnsville Country Inn 25 years ago, said customer service is a key principal in the Country Inns & Suites model. Each year the company sits down with the bottom-performing franchisees to discuss their shortcomings.
"You either move up or you move out," Meyer said. "We budget for attrition."
But communications works both ways.
Jeff Ruhr, a Plymouth-based hotel franchisee who owns eight Country Inns & Suites in Minnesota, Iowa and Wisconsin, said the Carlson people listen to his concerns and are willing to change with the marketplace.
"This is a constantly evolving business," said Ruhr, a 21-year-veteran of the hotel business who opened his first Country Inns and Suites in 1994 in Chippewa Falls, Wis.
"The first Country was very homey. The beds, for instance, had dust ruffles," Ruhr said. "That worked then but it had to change as tastes changed and amenities changed."
Staff writer Walker Moskop contributed to this report. David Phelps • 612-673-7269