Tom and Melissa Magnuson started Magnuson Hotels in their Spokane, Wash., home seven years ago as a way to help independent hotel owners compete in an increasingly brand-oriented industry. Since then, the independent affiliate company has grown to become a powerful player in the U.S. lodging industry. Now, Magnuson Hotels has expanded its business to the United Kingdom. Tom Magnuson talked with Editor Len Vermillion about the expansion.
1. Len Vermillion: How’s Magnuson performing in the U.K. since you opened the office in London?
Tom Magnuson: We launched in April of this year and already Magnuson Hotels’ U.K. movement is showing clear signs of success for 55 U.K. independents, with a projected 100 affiliates by Christmas 2010. Magnuson Hotels doubled September 2010 U.K. booking volume over August 2010, with September room rates 19 percent over August, and 9.55 percent above the comparable national set. These figures are particularly notable as August is traditionally the highest revenue month of the year for most lodging properties.
2. LV: What opportunity did you see in the U.K. that fit into your business plans? In short, what brought the company to the U.K.? TM: When co-CEO Melissa Magnuson and I began Magnuson Hotels seven years ago as a home-based startup, we never dreamed we would one day become the world’s largest independent hotel group, and the eighth largest hotel chain in the world. Our goal was simply to help a few independent hotels increase revenue without franchise fees or corporate regulations. We started with 12 affiliates who were friends and family; our mission was simply to work hard and be nice to people. We only followed the need. U.K. hotel owners are facing a downturn like no other before. The U.K. is in its third consecutive year of occupancy decline, from 71 percent in 2007 to just 57.76 percent in the year to date.
3. LV: What are the differences in the types of properties/owners that you encounter in the U.K. versus the U.S.? TM: For decades U.S .independents have been misunderstood, marginalized by the chain-driven industry as the “odd hotel” to the fringe, categorized as not up to standard. In the UK, independent hotels are the heroes of the country, and individuality is protected by generations of subsequent family ownership. Regardless of location however, all hotel owners are globally unified in the need to secure the most revenue at the lowest cost. The U.S. is catching up to what Europe has always known, in that independents are the mainstream, and actually a new growth market.
4. LV: You’re rolling out a new CRS to your members. What will the new systems entail and how will it be better than before? TM: On Oct.13, Magnuson Direct went live across the world connecting nearly 2,000 independent hotels directly to Expedia, Hotels.com, Hotwire, with more aggressive visibility than any other branded chains. Not only will hotels have the fastest, most direct connection to the largest distribution, hotels will receive 24/7 on demand revenue management services, with personal market specialists who serve as a single point person to manage your rates, promotions, online reviews and inventory across thousands of channels.